Australia’s property market is closing out 2025 with strong momentum.

National dwelling values reached a record median of A$888,941 in November, after a 1 per cent monthly rise. That marks seven months in a row of growth, with annual gains of about 7.5 per cent, which is above the long-term average.

This growth is primarily driven by:

• Limited new housing supply
• Strong population growth and migration
• More stable interest rates, with the RBA cash rate at 3.60 per cent

This backdrop creates both opportunity and pressure. Many owners have built up solid equity, while first home buyers and upgraders are facing stretched budgets.

This is a period where careful planning around:

• Refinancing
• Equity release
• Loan structure and strategy

can make a meaningful difference to long-term property and financial outcomes.

This article summarises current data and research from CoreLogic, CBRE valuer insights and recent market reports. It turns it into practical insights for borrowers and investors who want to prepare for 2026 with confidence.

National property market: where things stand

Across Australia, the property market remains resilient.

Key indicators:

• National median dwelling value: A$888,941
• Annual growth: About 7.5 per cent
• Monthly growth in November: About 1 per cent
• Houses are rising faster than units, with monthly gains around 1.1 per cent versus 0.8 per cent
• Middle and lower price segments are leading the way, with monthly rises of 1.4 per cent and 1.2 per cent

Weekly listings sit around 23,500 nationally. In Sydney, listings are roughly 10.3 per cent above average, giving buyers more choice but still supporting sellers.

Government incentives and first home buyer schemes are boosting demand in the more affordable parts of the market, even as deposit and repayment requirements rise.

 

Why prices remain resilient

Despite higher interest rates than borrowers were used to in the past few years, property prices are holding up across much of the country.

Limited new supply

Australia is not building enough homes to meet demand.

• There were about 163,836 dwelling commencements in 2023
• Estimates suggest the country needs around 240,000 a year to keep up with demand

At the same time:

• Construction costs remain elevated,
• Many builders and developers have pulled back after a period of cost blowouts and insolvencies,
• Labour shortages are still a factor in some markets.

This mix means that even when demand cools a little, there is not enough new stock to relieve price pressure fully.

Demand and migration

Demand remains strong due to:

• Net overseas migration is around 500,000 people a year
• Rate cuts in 2025, totalling around 75 basis points, improved borrowing capacity and sentiment for many borrowers
• Auction clearance rates around 65 per cent, which suggests a reasonably balanced, yet active market

Rental market strength

Rental markets are tight almost nationwide:

• Vacancy rates are under 1 per cent in many suburbs
• Brisbane rents have risen by around 10 per cent over the year

Tight rental conditions encourage some long-term renters to consider buying earlier than planned and support investors who can manage higher repayments.

 

Affordability: where the pressure is felt

While the market has rewarded existing owners and investors with strong capital growth, many first-home buyers and younger families are feeling the strain.

Recent research, including data from Cotality, highlights:

• Home values are up around 50 per cent since 2020
• In Sydney, a typical household may need 13 years or more to save a 20 per cent deposit
• New mortgage repayments can take 45 to 50 per cent of the median household income
• Renters often spend 33 to 35 per cent of their income on rent, which slows deposit saving
• Price to income ratios in the capitals sit near 9.8, which is double a comfortable level for many households

Home ownership among people under 40 has fallen to about 62 per cent, even as around two-thirds of all households own their homes outright or with a mortgage.

Regional differences

• Sydney has the highest price-to-income ratio, at 9.8
• Brisbane is more accessible on paper, near 7.2, but has moved well beyond previous affordability levels
• Regional New South Wales sits closer to 6.5, though incomes can be lower and employment more concentrated in certain industries

Government support

Government schemes and incentives provide some help, including:

• The Home Guarantee schemes, with deposits from 5 per cent
• State-based grants and concessions

These programs support tens of thousands of buyers each year, though they do not directly address the broader supply shortfall. Many analysts remain cautious about whether the target of 1.2 million new homes by 2030 will be met.

This environment makes tailored lending advice vital. The structure of your loan, deposit and ownership approach can have a significant impact on your ability to enter or move within the market.

Risks and what 2026 may look like

Every property cycle carries risk.

Key risks

• If interest rates remain high or rise again, borrowing capacity may be constrained.
• If wage growth slows while property prices keep rising, affordability will be more stretched.
• If construction activity slows further, supply will stay tight, which can limit choice even if price growth moderates.

Outlook for 2026

A recent Reuters poll suggests:

• National property prices may rise by about 6.9 per cent in 2026
• Sydney and Brisbane are expected to see gains in the 5 to 7 per cent range

Many market observers expect:

• A stronger first half of 2026 as buyers respond to improved confidence and tight rental conditions
• More moderate growth later in the year, as affordability and borrowing limits act as a natural break

For borrowers and investors, this reinforces the value of reviewing loan structures now and having a clear plan for the year ahead.

How Clever Finance Solutions can help.

Whether you are:

• Considering your first home
• Planning an upgrade
• Looking at your next investment property
• Reviewing your loans as a business owner

Clever Finance Solutions can help you:

• Review your current loans and interest rates
• Understand your borrowing capacity in today’s market
• Explore options for refinancing, equity release or new purchases
• Structure your loans so they align with your financial goals and lifestyle

We focus on you, your goals and your situation, and we guide you through the process from start to finish.

If you are thinking about your property plans for 2026, this is a good time to review your lending and see what is possible.

You can book a call with Clever Finance Solutions to discuss your situation and build a plan that suits you.