Australian Property Market Update: Early 2026 Shift
The Australian property market has hit a noticeable speed bump as we enter 2026. After a year of solid gains in 2025, where national home values rose by 8.6%, the momentum has shifted. The latest data reveals the first monthly decline in Sydney and Melbourne property values since January 2025.
For property owners, investors, and prospective buyers, this change signals a critical time to reassess portfolios and strategies. Whether you are holding property in a cooling market or looking to buy in a resilient one, understanding these micro-trends is essential.
Sydney and Melbourne: The First Signs of a Cool Down
In December 2025, both Sydney and Melbourne saw dwelling values slip by 0.1% to 0.3%. While these are small declines, they represent a significant change in direction.
Sydney remains the most expensive market, with a median dwelling value over $1.1 million. However, affordability constraints are biting hard. The high entry price means fewer buyers can stretch their budgets, leading to a natural cooling in demand.
Melbourne has also seen a softening. With listing volumes higher than in other capitals, buyers have more choice, reducing the competitive pressure that drives up prices.
Despite this dip, it is not a crash. The market is adjusting after a period of growth. For homeowners in these cities, a stable or slightly softening market is a reminder that equity growth is not linear. Now is a strategic time to get a professional valuation to understand your true position before making refinancing or selling decisions.
Brisbane, Perth, and Adelaide: The Growth Engines Continue
While the biggest cities pause, the smaller capitals are still surging.
Perth continues to be a standout performer, with median house prices approaching the $1 million mark. The combination of relative affordability compared to the east coast and strong local economic drivers keeps demand high.
Brisbane and Adelaide also recorded monthly gains of around 0.5% to 0.8% in late 2025. These markets are driven by interstate migration and buyers seeking better value for money.
For investors, these diverse outcomes highlight the importance of location. A "national" strategy doesn't exist; you need a strategy tailored to the specific suburb and city you are invested in.
Why Valuations Matter in a Changing Market
When the market changes direction, automated online estimates often lag behind. They rely on past sales data that may not reflect the sentiment of buyers today.
In a cooling market (Sydney/Melbourne): You need an accurate valuation to set a realistic reserve price if selling, or to avoid over-estimating your equity for renovation loans.
In a rising market (Perth/Brisbane): You need an up-to-date valuation to ensure you aren't under-insured or to unlock newfound equity for further investment.
At ValueMax, our certified valuers provide independent, evidence-based reports that cut through the noise of headlines. Whether you need a valuation for Capital Gains Tax, Stamp Duty, or Pre-Sale advice, we ensure you have the correct figure for your specific property type and location.
The Australian Property Outlook for 2026
Economists are predicting a "soft landing" rather than a sharp correction. Interest rates remain the key variable. With speculation that the RBA may hold or even hike rates again to combat inflation, borrowing capacity will remain constrained.
However, government schemes like the expanded Home Guarantee Scheme and Help to Buy will continue to support entry-level prices, potentially creating a "two-speed" market where affordable homes hold value better than premium properties.
Stay informed, stay strategic, and ensure your property decisions are backed by professional valuation advice.
