Economic updates

Price growth and transaction volumes follow surprisingly different patterns. Over the past 25 years, sales have swung between fewer than 380,000 and greater than 580,000 annually - far more sharply than prices or population growth would suggest.

Demand has continued through summer with limited impact from rate rise expectations. National house prices climbed further in January, with broader supply constraints suggesting any slowdown would more likely moderate growth rather than reverse it.

Interest rate cuts now unlikely before second half 2026 as services inflation proves stubborn. Rents, utilities and insurance continue rising, limiting RBA easing despite broader economic slowdown and household spending weakness.

Institutional Build-to-Rent capital reshaping Australian rental market with stable yields and long-term leases. Occupancy rates 95-98% drawing offshore investors. Sector remains small but represents significant structural shift ahead.

Australia's fastest-growing coastal suburbs are no longer in Byron Bay or the Gold Coast. Instead, growth has concentrated in regional industrial hubs where affordability and employment opportunities align with lifestyle demand.

The Australian Open captures public attention around tennis, but a quieter trend is playing out in the residential property market. Growing participation and lifestyle-driven migration are reshaping how these leisure features fit into suburban homes.

The 2019-2020 Black Summer bushfires impacted Mallacoota severely, but house prices recovered within years. Other disaster-affected communities haven't bounced back the same way. The difference isn't just about the disaster itself.

Property has long been Australia's default investment vehicle. A house purchased in 2015 would have nearly doubled in value by now. But the asset classes available for investment today have expanded, each with distinct return patterns and risk profiles.

The Australian housing market finished 2025 exceptionally strong with 12 per cent annual growth. This performance sits at odds with widespread cost of living stress, yet the two can coexist in the same market cycle.

Next phase of regional growth rewards markets with dual appeal. Towns like Townsville and Bundaberg combine industry fundamentals with lifestyle at accessible sub-$700K prices, outpacing premium coastal markets that are now slowing.

Australian housing enters 2026 with momentum but uncertainty. Double-digit growth likely to slow toward mid-year as rate relief remains unlikely in first half. Affordable segment, lifestyle markets and regional areas set to outperform through 2026.

Luxury market decentralisation reversing as Sydney premium shrinks and Melbourne undervalues versus fundamentals. Gold Coast and Sunshine Coast gains slowing while major cities regain relative appeal to high-end buyers.