2025 was a challenging year for buyers but a good year for home owners, with the Home Value Index increasing by 8.6% and adding approximately $71.4k to the national median dwelling value.
A recent report released by KPMG, suggests Australian house prices across could climb another 7.7% in 2026, despite uncertainty around interest rates.
Of course, a lot can happen to impact property prices over the next 12 months.
So, how might prices perform in your state?
Below is a rundown of KPMG’s forecasts for property price growth across each of the major capitals.
Projected property price growth across major capitals
Sydney: growth limited by persistent supply and affordability
Sydney house prices are predicted to rise 5.8% in 2026, with further growth of 5.7% in 2027.
Apartment prices are forecast to increase 5.3% this year, with 4.0% rise next year.
Brisbane: the big gains may keep coming
Brisbane’s home values rose by 14.6% last year, some of the biggest gains nationally and second only to Perth.
With housing demand continuing to outstrip supply, KPMG believes there’s plenty of fuel left in the tank – house prices are expected to grow by 10.9% in 2026, and 8.9% in 2027.
Meanwhile, the price of Brisbane apartments is forecast to rise 7.8% for 2026, followed by growth of 4.9% in 2027.
Melbourne: price growth expected to outpace 2025
Melbourne’s median residential property value is now $854,000, making it one of Australia’s more affordable capital cities.
How long that remains is anyone’s guess though, with forecast house price growth of 6.8% in 2026, followed by 7.3% in 2027.
Melbourne apartments are expected to increase in value too – 7.3% increase expected in 2026, with a further 5.5% growth forecast for 2027.
Canberra: moderate prices growth expected
ACT property prices rose 4.2% in 2025, and moderate growth is expected to continue this year.
KPMG is predicting house prices to rise 4.7% in 2026, followed by growth of 3.3% next year.
Canberra apartments are expected to increase in value by 4.9% over the next 12 months, and then climb 3.6% in 2027.
Hobart: softer growth tipped for 2026
After rising 7.8% over the past 12 months, property prices in Hobart could experience softer growth in 2026.
House prices are expected to increase by 5.4% this year, while Hobart unit values are tipped to rise 5.1%.
2027 may see price growth continue, with house and apartment values expected to rise 4.1% and 4.0% respectively.
Adelaide: the run of price growth may continue
Strong price growth in recent years has taken Adelaide’s median home price to $908,000.
This year, KPMG is expecting the run of growth to continue, with house prices forecast to rise by 8.2%, with a further increase of 3.3% in 2027.
Unit prices are tipped to climb 6.6% this year, with growth of 3.8% in 2027.
Perth: still going strong
Perth’s property market was a standout in 2025, notching up price growth of 17.2%.
According to KPMG, the WA capital is set to see double-digit price growth again in 2026, with house prices expected to rise 12.8%, and apartment values forecast to increase by 11.6%.
Price growth may be more modest in 2027, with house and apartment prices expected to rise 5.1% and 3.9% respectively.
Darwin: double-digit growth may lie ahead
As Australia’s most affordable capital, with a median home price of $578,000, Darwin prices look set to rise over the next two years.
House prices could increase by a hefty 10.5% in 2026, while apartment prices could see even bigger gains of 13.4%.
2027 should see slightly softer price growth across both houses (up 6.8%) and units (9.3%).
What’s likely to drive prices higher?
KPMG are not the only ones predicting growth in property prices this year.
Whilst property research group Cotality doesn’t offer ‘price predictions’, they have advised they’re expecting “modest” price growth through 2026.
The assumption underpinning these predictions is that two key forces are likely to continue to push prices higher – tight supply of new homes coupled with strong buyer demand. And with the expansion of the 5% Deposit Guarantee in Oct 25, demand from first home buyers continues to be strong.
Whilst recent ABS data indicates housing construction is increasing, the HIA reports it’s unlikely to keep pace with the estimated 240,000 new homes that are needed annually.
Time to review your buying plans?
Of course, forecasts are just that – predictions – and plenty can change over the year ahead. We see experts and market researchers make incorrect predictions all the time (especially when it comes to interest rates).
So, if you’ve been holding off buying in the hope of perfectly timing the market, we’d suggest you revise that strategy.
Trying to buy (or sell for that matter) at the exact right time is almost impossible.
Instead, we’d recommend you look at your current life situation and decide if buying now is the perfect time for *you.*
If you’re keen to understand your current borrowing capacity, reach out to our team here.
