Quarterly property update – March 2026

Slowing overall growth in an increasingly segmented market

Property values across Australia showed an overall slowing of growth over the quarter, moderating from 3.1% to 2.1% in the most recent figures.

The past quarter has seen an emerging divergence across the capital city housing markets, with Melbourne and Sydney values softening while the mid-sized capitals continue to record gains.

Perth is showing the strongest trend, with home values increasing by 6.8% over the quarter, followed by Brisbane and Adelaide recording rises of 4.8 and 4.3% respectively. Melbourne and Sydney have been less resilient to the February rate hike and the drop in sentiment, with home values down -0.4 and -0.1% over the rolling quarter.

Tim Lawless, Cotality’s research director, provided comment on this trend, “The clear slowdown in housing conditions across Sydney and Melbourne could signal an easing in growth conditions elsewhere down the track, but for now, the mid-sized capitals continue to see support from extremely low inventory levels, which is boosting the growth in values.”

Stronger growth at the lower end

Most cities are continuing to see homes at the lower end of the market driving growth, especially for houses. Across the combined capitals, lower quartile house values were up 1.3% compared with a 0.3% rise across the upper quartile.

“This trend of stronger growth conditions at lower price points is supported by intense competition for more affordable houses,” said Mr Lawless. “This is where first home buyers, investors and, progressively, mainstream demand is most concentrated.”

The regions

Regional housing conditions continued to show a stronger growth trend relative to their capital city counterparts, with values across the combined regionals index rising 3.2% over the quarter – compared to capital city values which recorded 1.8% increase.

The result marks a clear shift in market momentum as affordability, renewed internal migration and competitive conditions direct more buyers towards regional areas.

Gerard Burg, Cotality’s Head of Research for Australia, said the results point to a deepening divergence between city and regional markets.

“Affordability remains a powerful driver of buyer behaviour. With capital city prices still near record highs and stock levels tight, many households are once again looking to regional Australia for greater value and liveability.” Mr Burg said.

Time Lawless also acknowledged the competition at the lower end of the market which is influencing values, “There is a lot of competition for lower-priced properties.” Mr Lawless said. “First home buyers, investors and subsequent buyers are all competing across this sector of the market, while credit is less available across the higher price points due to serviceability constraints.”

Auction clearance rates and housing demand

New listings remain low across most of Australia. According to Cotality, the number of homes advertised for sale is down 5% compared to the same time last year, and 9.2% below the five-year average.

Perth listings remain 48% below their five-year average, with Brisbane 31% below and Adelaide 23% lower.

Advertised stock levels are also low in Sydney and Melbourne, although both cities have seen a clear pickup in the amount of new listings through February.

“Vendors are looking more motivated in Sydney and Melbourne, possibly looking to beat a further softening in selling conditions as clearance rates ease and demand slows,” Mr Lawless said. “If the typical seasonal pattern holds, the flow of new listings is likely to strengthen leading into Easter.”

Looking ahead

Market sentiment is becoming more cautious due to the February cash rate increase which eroded borrowing power and repayment capacity as well as fears of further rate hikes, this, coupled with poor affordability is tempering the pace of growth.

Credit conditions are also tightening, with APRA’s introduction of limits on high debt-to-income (DTI) lending from February 1 which set the tone for a more cautious lending environment in 2026.

On the positive side, several factors continue to support housing values. Housing supply remains low. Employment figures point to a tight jobs market, helping to underpin household income security and mortgage serviceability, even as real wages have come under pressure, while government support for first home buyers is also providing some offset to broader affordability challenges.

These factors point to a more segmented and softer market through 2026, with growth more evident in the lower end of the market and the regions.

Dwelling values over the quarter

Melbourne

The Victorian capital decreased by -0.4% over the quarter, taking the city’s median dwelling price to $826,132. Investors should take note that the gross rental yield figure for Melbourne is 3.7%.

Sydney

Sydney also showed a decrease in property values over the period of -0.1%, resulting in a median of $1,296 million. The gross rental yield for the Harbour City remains the lowest of the capitals at 3.0%.

Brisbane

The Queensland capital continues to record the second most expensive spot for dwelling values at $1,080 million and a quarterly rise of 4.8%. Brisbane has recorded a gross rental yield of 3.3%.

Canberra

The national capital recorded a rise of 1.3% during the quarter with the median now sitting at $903,374. For Canberra, the gross rental yield is 4.1%.

Perth

Perth again recorded the strongest increase of all the capitals, growing by 6.8% over the quarter and taking its medium to $989,211. Perth recorded 3.8% gross rental yield.

For more information about how you might be able to purchase a property in the current market, get in touch with us today 0n 03 9723 0522.

Note: all figures in the city snapshots are sourced from: Cotality national Home Value Index (December 2025)

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