House Prices & Rents to Rise in 2026 📈

A gradual rise in household incomes is one reason why house prices are expected to reach record highs in all capital cities by the end of next year.
That's according to Domain's forecast report for 2026.
It shows house prices will rise by 6 per cent across the capitals, compared to 9 per cent this year.
Units will go up by 5 per cent, in a market that's expected to be more balanced and policy-driven.
Domain's chief of research and economics Nicola Powell says the forecast for growth is largely due to the expansion of the first home guarantee scheme.
She says the first half of next year will likely see first home buyers competing with investors, but as capital growth starts to slow, investors will likely pull back.
Domain's report reveals the biggest increase in house prices will be seen in the most rate-sensitive cities of Sydney and Melbourne.
Nicola Powell says Sydney's median house price is expected to hit $1.9 million in 2026, and setting a pathway for a $2 million median house price in Sydney by 2027.
Rental price growth is also forecast across all capital cities, however Nicola Powell says she would describe the projects as modest and in line with inflation. "We're expecting a little bit of an uptick in the rate of rental price growth in Sydney and Melbourne for house rents, but in most of our capital cities, we're expecting unit rents to grow faster than house rents", she says. "That really is this steer towards more affordable rental properties, smaller rental properties because we know the rental market has been extremely strained over recent years."
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