FLPG PROPERTY NEWSLETTER EDITION 03
📈 FEBRUARY 2026 Residential Property Market Report — Edition 03
AUSTRALIA’S HOUSING MARKET REMAINS STRUCTURALLY TIGHT — SELECTIVITY IS NOW THE DECIDING FACTOR
EXECUTIVE SNAPSHOT
AUSTRALIA’S RESIDENTIAL PROPERTY MARKET HAS ENTERED 2026 WITH CLEAR MOMENTUM — BUT THIS IS NO LONGER A BLUNT, RISING-TIDE ENVIRONMENT.
WHAT IS NOW EMERGING IS A DEEPLY EMBEDDED SUPPLY IMBALANCE WHERE ASSET QUALITY, LOCATION, FEASIBILITY AND RENTAL FUNDAMENTALS MATTER MORE THAN BROAD MARKET EXPOSURE.
PRICES CONTINUE TO RISE NATIONALLY. RENTS REMAIN TIGHT. VACANCY RATES ARE AT OR NEAR STRUCTURAL LOWS. HOWEVER, GROWTH IS BECOMING INCREASINGLY SEGMENTED — WITH CLEAR OUTPERFORMERS AND CLEAR LAGGARDS.
THIS EDITION DRAWS ON SQM RESEARCH NATIONAL DATA, KPMG’S JANUARY 2026 OUTLOOK, AND CBRE MARKET THEMES, COMBINED WITH FUTURELAND’S ON-THE-GROUND INSIGHT, TO EXPLAIN WHERE CONDITIONS ARE TIGHTENING, WHERE GROWTH IS NORMALISING, AND HOW CAPITAL SHOULD BE DEPLOYED AS THE CYCLE MATURES.
THE BIG PICTURE — WHY THE MARKET REMAINS TIGHT
DESPITE HIGHER INTEREST RATES THROUGH 2024–25, AUSTRALIA’S HOUSING MARKET HAS PROVEN REMARKABLY RESILIENT.
THREE STRUCTURAL FORCES CONTINUE TO DOMINATE:
LISTINGS & SUPPLY REMAIN STRUCTURALLY CONSTRAINED
NATIONAL LISTING LEVELS REMAIN WELL BELOW LONG-TERM AVERAGES, PARTICULARLY IN LIFESTYLE AND HIGH-GROWTH REGIONAL MARKETS. SQM DATA CONTINUES TO CONFIRM THAT THE RECENT PRICE UPSWING IS SUPPLY-LED, NOT A SPECULATIVE DEMAND SPIKE.
DEVELOPMENT PIPELINES ARE IMPROVING AT THE APPROVAL STAGE, BUT COMPLETIONS REMAIN VOLATILE AND DELAYED — MEANING MEANINGFUL SUPPLY RELIEF IS STILL SEVERAL YEARS AWAY.
POPULATION GROWTH STILL OUTPACES DELIVERY
KPMG ESTIMATES NET HOUSING SUPPLY WILL FALL SHORT OF UNDERLYING DEMAND BY APPROXIMATELY 30% OVER THE NEXT TWO YEARS, WITH AN AVERAGE OF 150,000–170,000 DWELLINGS PER ANNUM AGAINST MATERIAL HIGHER REQUIREMENTS.
THIS IMBALANCE CONTINUES TO PLACE A FLOOR UNDER BOTH PRICES AND RENTS — EVEN AS MIGRATION GROWTH MODERATES FROM PEAK LEVELS.
VACANCY RATES REMAIN AT STRUCTURAL LOWS
SQM DATA CONFIRMS NATIONAL RESIDENTIAL VACANCY RATES AROUND 1.2–1.3%, WITH PERTH, BRISBANE, ADELAIDE AND KEY LIFESTYLE MARKETS REMAINING EXTREMELY TIGHT.
RENTAL PRESSURE HAS MODERATED FROM PEAK MOMENTUM, BUT THE MEDIUM-TERM TRAJECTORY REMAINS UPWARD DUE TO ONGOING SUPPLY SHORTAGES.
NATIONAL PRICES, RENTS & VACANCY — SQM DATA INSIGHT
PRICES
SQM’S COMBINED NATIONAL DATA SHOWS: • HOUSE AND UNIT ASKING PRICES CONTINUE TO RISE NATIONALLY • CAPITAL CITY MARKETS ARE OUTPERFORMING REGIONAL AVERAGES • PRICE GROWTH IS STRONGEST WHERE VACANCY IS TIGHTEST
NOTABLY, MARKETS WITH VACANCY BELOW 1% ARE NOW CONSISTENTLY RECORDING ABOVE-AVERAGE PRICE GROWTH — REINFORCING THAT RENTAL TIGHTNESS, NOT SENTIMENT, IS THE PRIMARY DRIVER OF THIS CYCLE.
THE MARKET IS INCREASINGLY RENT-LED, WITH INVESTOR INTEREST SUPPORTED BY STRONG YIELDS AND LOW VACANCY RISK.
RENTS
WEEKLY RENTS CONTINUE TO TREND HIGHER ACROSS ALL CAPITALS, WITH THE STRONGEST GROWTH IN: • PERTH • BRISBANE • ADELAIDE • SUNSHINE COAST & GOLD COAST
KPMG EXPECTS NATIONAL RENT GROWTH TO AVERAGE AROUND 3.5% PER ANNUM THROUGH 2026–27, REMAINING ABOVE LONG-RUN AVERAGES DUE TO ONGOING SUPPLY IMBALANCES.
VACANCY
VACANCY RATES REMAIN THE MOST IMPORTANT SIGNAL: • BELOW 1% = STRONG PRICING POWER • 1–1.5% = TIGHT BUT STABILISING • ABOVE 2% = BALANCED / TENANT-FAVOURABLE
CURRENT CONDITIONS SUGGEST THE MARKET REMAINS FIRMLY IN LANDLORD-FAVOURABLE TERRITORY.
CAPITAL CITY & KEY MARKET INSIGHTS
BRISBANE — UNIT-LED GROWTH REMAINS DOMINANT
• HOUSES: +8–9% YOY • UNITS: +12% YOY • VACANCY: 0.9%
AFFORDABILITY PRESSURES ARE PUSHING DEMAND TOWARD WELL-LOCATED APARTMENTS AND TOWNHOUSES BELOW THE $1M PRICE POINT. INFRASTRUCTURE SPENDING AND LONG-TERM POPULATION GROWTH CONTINUE TO SUPPORT CONFIDENCE.
FUTURELAND INSIGHT: BRISBANE REMAINS HIGH-CONVICTION, BUT ONLY FOR INVESTMENT-GRADE, WELL-LOCATED ASSETS. GENERIC STOCK IS LOSING RELATIVE APPEAL
PERTH — THE STRONGEST YIELD + GROWTH COMBINATION
• HOUSES: +7–8% YOY • UNITS: +10% YOY • VACANCY: 0.7% (LOWEST NATIONALLY)
PERTH CONTINUES TO BENEFIT FROM RELATIVE AFFORDABILITY, STRONG POPULATION INFLOWS AND SEVERE SUPPLY CONSTRAINTS.
FUTURELAND INSIGHT: PERTH REMAINS ONE OF AUSTRALIA’S MOST COMPELLING MARKETS FOR MEDIUM-DENSITY, INFILL AND YIELD-FOCUSED STRATEGIES.
ADELAIDE — CONSISTENT, LOW-VOLATILITY PERFORMANCE
• HOUSES: +6% YOY • UNITS: +6% YOY • VACANCY: 0.8%
LISTINGS REMAIN SIGNIFICANTLY BELOW HISTORICAL AVERAGES, SUPPORTING BOTH PRICE AND RENTAL GROWTH.
FUTURELAND INSIGHT: ADELAIDE REWARDS DISCIPLINE. ZONING, SITE QUALITY AND END-BUYER TARGETING MATTER MORE THAN EVER.
SYDNEY & MELBOURNE — STEADIER, MORE SUSTAINABLE
SYDNEY CONTINUES TO RECOVER AT A MEASURED PACE, WITH SUPPLY SCARCITY OFFSET BY AFFORDABILITY CEILINGS.
MELBOURNE’S RECOVERY IS GRADUAL BUT BROADENING, SUPPORTED BY IMPROVING AFFORDABILITY AND STRONG MIGRATION.
FUTURELAND INSIGHT: THESE MARKETS REWARD SCARCITY, LONG-TERM HOLDING AND DESIGN-LED PROJECTS — NOT SHORT-TERM SPECULATION.
LIFESTYLE MARKETS — SUNSHINE COAST & GOLD COAST
• PRICE GROWTH: 6–10% YOY • VACANCY: 1.2–1.4% • RENTS: +50–60% SINCE 2020 (NOW NORMALISING)
MIGRATION-DRIVEN DEMAND CONTINUES TO OUTPACE SUPPLY, THOUGH GROWTH IS BECOMING MORE SELECTIVE.
FUTURELAND INSIGHT: DESIGN-LED, WELL-POSITIONED PROJECTS CONTINUE TO OUTPERFORM. GENERIC PRODUCT IS INCREASINGLY EXPOSED.
INTEREST RATES — SUPPORTIVE, NOT SPECULATIVE
RATE CUTS HAVE IMPROVED SENTIMENT AND STABILISED BORROWING CAPACITY, BUT THIS IS NOT A RETURN TO 2021 CONDITIONS.
THE PRIMARY IMPACT HAS BEEN: • IMPROVED BUYER CONFIDENCE • STRONGER CLEARANCE AND ABSORPTION RATES • DEVELOPERS REASSESSING FEASIBLE SITES
CONSTRUCTION COSTS, PLANNING DELAYS AND FEASIBILITY CONSTRAINTS REMAIN THE TRUE GOVERNORS OF SUPPLY.
WHAT THIS MEANS HEADING INTO 2026
FOR INVESTORS: WELL-LOCATED, RENT-RESILIENT ASSETS IN BRISBANE, PERTH AND ADELAIDE CONTINUE TO OFFER THE BEST RISK-ADJUSTED RETURNS.
FOR DEVELOPERS: MEDIUM-DENSITY AND INFILL PROJECTS REMAIN ATTRACTIVE — BUT ONLY WHERE FEASIBILITIES WORK UNDER TODAY’S COST BASE.
FOR HOMEBUYERS: COMPETITION REMAINS STRONG IN SUPPLY-CONSTRAINED SUBURBS. SELECTIVE OPPORTUNITIES PERSIST IN MELBOURNE AND PARTS OF PERTH.
FUTURELAND STRATEGY OUTLOOK
AT FUTURELAND, OUR FOCUS REMAINS FIRMLY ON: • SUPPLY-CONSTRAINED LOCATIONS • MEDIUM-DENSITY AND INFILL OPPORTUNITIES • FEASIBILITY-LED SITE SELECTION • ASSETS ALIGNED WITH LONG-TERM DEMOGRAPHIC DEMAND
THE NEXT PHASE OF THIS CYCLE WILL REWARD DISCIPLINE, PATIENCE AND STRATEGY — NOT HYPE.
FINAL WORD — MOMENTUM WITH DISCIPLINE
AUSTRALIA ENTERS 2026 WITH SOLID HOUSING MOMENTUM, BUT THIS IS NO LONGER A MARKET WHERE “ANY ASSET WILL DO.”
SUPPLY CONSTRAINTS, AFFORDABILITY CEILINGS AND DELIVERY REALITIES ARE DETERMINING WHERE CAPITAL SHOULD FLOW.
THE OPPORTUNITY IS STILL VERY REAL — BUT IT IS INCREASINGLY EARNED.
