2026 Property Market Outlook: States Set for Significant Growth

Smaller States Leading the Charge

The smaller states are emerging as frontrunners in the property market. Tasmania stands out, with 92% of professionals forecasting price increases, though three-quarters predict modest growth under 5%. Queensland follows closely, with 89% expecting price rises, and half anticipating growth above 5%. Western Australia also shows strong prospects, with nine out of ten agents expecting price increases, and nearly half forecasting gains exceeding 5%.

Tim Lawless, Cotality's research director, attributes this optimism to factors such as strong internal migration, better affordability compared to Sydney, and a persistent housing supply shortfall. These elements have combined to support stronger price growth in these regions.

Victoria's Cautious Outlook

In contrast, Victoria presents a more cautious outlook. Nearly one-third of professionals expect growth below the national average. As of the end of 2025, Victorian dwelling values remained below their March 2022 peak, influenced by higher property taxes, reduced investor participation, and weaker interstate migration.

Lawless notes that policy changes and increased holding costs have impacted investor activity in Victoria, even as first home buyers now account for the largest share of lending in the state.

Implications for Buyers

For prospective buyers, these regional variations underscore the importance of understanding local market dynamics. National averages may not reflect the conditions in specific areas, making it crucial to research and consider local factors when making property decisions.

Additionally, government support continues to drive activity at the lower end of the market. Over 75% of agents report increased buyer activity following the expansion of the First Home Guarantee, with competition particularly intense around scheme price caps. Since October, more than 21,000 first home buyers have accessed the expanded 5% deposit scheme, highlighting the ongoing demand and support for entry-level buyers.

In summary, while the Australian property market shows overall confidence heading into 2026, regional differences are becoming increasingly significant. Prospective buyers and investors should stay informed about local trends and policies to make well-informed decisions in this evolving landscape.