Australia’s median house price set to surpass historic $1m barrier in 2026

Australia’s property market will continue its record-breaking run in 2026, with the combined capitals set to break through a historic milestone.

Forecast data released by Proptrack shows the combined median capital city house price will rise between 6 per cent and 8 per cent in the new year.

If this forecast is correct, the combined capital cities will surpass the historic median price of $1m for the first time.

As of November 2025 the median combined capital city home would cost $979,000.

Despite reaching a record high, REA Group senior economist Angus Moore says momentum in the housing market is starting to moderate.

”The tight supply backdrop that has supported price growth this year remains, yet stretched affordability and an extended pause on interest rates are set to temper the pace of growth,” he said.

Mr Moore says higher house prices will mean the current boom will stay well below the 20 to 30 per cent annual gains seen in previous market cycles.

Driving house prices higher is a limited supply of new dwellings and falling interest rates, while more Australians are still trying to enter the market.

”Demand will be supported by population inflows, income growth, investor activity, and a recovery in borrowing capacity following 2025’s series of rate cuts,” he said.

Perth and Brisbane are tipped to remain the strongest performers, though even these markets will cool from their recent highs.

Proptrack says Perth is benefiting from population inflows and a tight rental market, while Brisbane will still outperform although it is coming off “extraordinary growth” in the past few years.

Sydney is tipped to rise by between 5 per cent and 7 per cent, with affordability constraints meaning the bulk of the buying activity will occur in the outer and middle ring suburbs.

Melbourne is forecast to recover from its recent underperformance and also add between 5 per cent and 7 per cent to property values.

Adelaide’s remarkable price surge has made affordability very challenging, and momentum will naturally ease as growth moderates.

Hobart enters a consolidation phase with prices yet to recover their 2022 peak. Affordability remains stretched across all these markets relative to local incomes.