As we wrap up the year and look forward to a fresh, new year; there are a few takings which summarise the 2025 property market. Sydney’s 2025 housing market was resilient but complex. It’s being supported by tight supply, strong migration, and better financing conditions.
But affordability constraints, investor yield pressure, and supply bottlenecks are real risks. For buyers, getting into the market it has remained tough. For sellers — especially in the premium segment — conditions look favourable.
Australia’s housing market is now shifting into a fresh cycle shaped by lower interest rates, stronger policy support and gradually improving household incomes. After several years marked by affordability constraints and limited supply, 2026 is expected to bring a more balanced, policy-led upswing— underpinned by renewed confidence and easing financial pressures.
Key Insights
• Expansion of the First Home Guarantee Scheme: Allowing buyers to enter the market with a 5% deposit and no mortgage insurance is likely to boost prices in its first year by bringing forward demand from firsthome buyers.
• Lower interest rates: Cuts delivered in 2025 will continue to fuel price growth through 2026, even as expectations for further reductions fade.
• Rising household incomes: Moderate real income gains are helping rebuild purchasing power and soften some affordability challenges.
• Affordability constraints to return: In the second half of 2026, affordability ceilings are likely to temper growth—especially in Adelaide, Brisbane and Perth, where prices have already climbed significantly.
If you would like to chat through your future plans for 2026 please reach out.
