Australia’s housing market is expected to continue its upward trend into FY26, supported by easing interest rates, government incentives for first-home buyers, and rising household incomes.
According to Domain’s latest Price Forecast Report, national home prices across capital cities are projected to rise by 5 per cent for houses and 6 per cent for units by June 2026.
However, affordability constraints are becoming a key limiting factor. While the housing supply shortfall continues to push prices upward, stretched household budgets and high mortgage repayments are placing pressure on buyers – particularly in cities like Brisbane.
Brisbane forecast
Brisbane house prices are forecast to rise by 5 per cent, reaching a record $1.09 million median by mid-2026, an increase of $56,000 over the year.
Unit prices are also set to climb 5 per cent, hitting $701,000.
This growth follows several years of strong momentum, although unit price growth is expected to slow to more sustainable levels.
Affordability pressures are evident, with the mortgage burden for a typical dual-income household now consuming around 50 per cent of earnings – up from 28 per cent in 2019.
As a result, many residents are adjusting their living arrangements, taking on housemates or staying in multi-generational homes longer to manage costs.
Despite these challenges, strong demand, infrastructure investment ahead of the 2032 Brisbane Olympics, and population growth are expected to continue driving prices upward.
Capital city snapshot
Brisbane isn’t alone in its outlook. Sydney is forecast to lead house price growth at 7 per cent in FY26, followed by Melbourne at 4 per cent.
Perth and Canberra are each expected to see house prices rise 4 per cent, while Brisbane holds steady at 5 per cent.
Overall, Australia’s property market is transitioning into a more stable phase, with growth aligning more closely to household incomes and supply fundamentals.
Domain’s full report can be found online.
