Perth Set to Lead 2026 Property Price Surge Nationwide
Perth is poised to lead a national surge in property prices by 2026. This growth is expected to encompass all capital cities, fueled by an ongoing housing shortage.
Driving Factors Behind the Property Price Surge
The current imbalance between supply and demand is a significant driving force behind the projected increase in house prices. Experts indicate that there is still a substantial deficit in housing availability. As a solution, there is a call for government initiatives to expedite housing production.
Government Initiatives Supporting Home Ownership
- The Australian Government’s 5% Deposit Scheme has aided over 21,000 homebuyers since its expansion on October 1.
- This scheme provides low-deposit loans without lender’s mortgage insurance to buyers across income levels.
- Recent adjustments have increased eligible property price caps.
According to recent research by Cotality, homes under the scheme have appreciated by 3.6% in the December quarter, outperforming properties exceeding the price cap, which rose by 2.4% within the same timeframe. Despite this growth, some investors are reportedly competing with first-time buyers in lower price brackets.
Property Price Forecasts
Analysis indicates that property prices are likely to grow modestly by about 5-7% nationally in 2026, compared to a 2025 increase of 8.5%. This projection considers various factors including potential interest rate cuts in 2025 and the persistent housing shortage, which continue to elevate property values.
Interest Rates and Housing Affordability
While the Reserve Bank may adjust interest rates, it is projected that even a slight increase would only modestly slow price growth, without completely halting it. Interest rates are viewed as a short-term variable among many influences affecting house prices.
Dr. Shane Oliver, AMP chief economist, notes that lower affordability will push buyers toward more affordable options, including units. He estimates unit prices may rise by 7% in 2026, compared to a 5% increase in house prices.
Conclusion
As Perth takes the lead in the anticipated property price surge, the effects of government programs and market conditions are set to shape the housing landscape significantly. Monitoring these trends will be vital for prospective buyers and investors as 2026 approaches.
