FLPG Monthly Property Newsletter edition 02
📈 January 2026 Residential Property Market Report
January 2026 Australia’s Housing Market Enters 2026 With Momentum — Selectivity Now Matters More Than Ever
EXECUTIVE SNAPSHOT
Australia’s residential property market has entered 2026 with momentum — but this is no longer a blunt, rising-tide cycle.
What we are seeing is a structurally undersupplied market, increasingly shaped by policy settings, affordability ceilings, and asset quality rather than speculation.
Prices are still rising. Rents remain tight. But the gap between high-quality assets and average stock is widening rapidly.
This edition draws on CBRE, SQM Research, Metropole and national market data to explain where growth is genuine, where it is moderating, and how investors and developers should position as the cycle evolves.
THE BIG PICTURE — WHY THE MARKET REMAINS TIGHT
Despite higher interest rates over the past two years, Australia’s housing market has proven remarkably resilient.
Three forces continue to dominate:
1. Listings remain scarce National listings are approximately 20% below long-term averages. Smaller and lifestyle-driven markets are experiencing the most acute shortages — which is where price growth is now accelerating fastest.
This is not primarily a demand spike; it reflects ongoing supply constraints.
2. Population growth continues to outpace supply Net overseas migration and interstate movement remain strong, while dwelling completions are still well below what is required to rebalance the market.
Apartment supply is forecast to average around 60,000 dwellings per annum through to 2030, which remains insufficient relative to projected population growth.
3. Vacancy rates are at structural lows Capital city vacancy rates sit around 1.2% nationally, with Perth, Brisbane, Adelaide, the Sunshine Coast and the Gold Coast remaining extremely tight.
Rents may pause quarter-to-quarter, but the medium-term trajectory remains upward.
CAPITAL CITY & KEY MARKET INSIGHTS
Brisbane — Unit-Led Growth Continues
Brisbane remains one of Australia’s strongest-performing capital city markets.
Houses: ~$1.06m median, ~+8% YoY
Units: ~$727k median, ~+12% YoY
Vacancy: ~0.9%
Affordability pressures are shifting demand toward apartments, supported by strong first-home buyer and investor activity below the $1m price point. Infrastructure investment and the long-term runway toward the 2032 Olympics continue to underpin confidence.
Futureland insight: Brisbane remains attractive — but only for well-located, investment-grade assets. The margin for error is narrowing.
Perth — Yield and Growth Remain Compelling
Perth continues to outperform expectations.
Houses: ~$895k median, ~+7% YoY
Units: ~+10% YoY
Vacancy: ~0.7% (lowest nationally)
Relative affordability, strong population growth and severe undersupply are supporting both price appreciation and rental growth.
Futureland insight: Perth remains one of the strongest yield-plus-growth markets nationally, particularly for medium-density and infill strategies.
Adelaide — Consistent, Low-Volatility Performer
Adelaide’s multi-year run of consistent growth continues.
Houses: ~$912k median, ~+6% YoY
Units: ~+6% YoY
Vacancy: ~0.8%
Listings remain approximately 40% below long-term averages, reinforcing ongoing upward pressure on prices and rents.
Futureland insight: Adelaide offers compelling fundamentals, but success increasingly depends on site selection, zoning discipline and asset quality.
Sydney & Melbourne — Slower, More Sustainable Growth
Sydney Sydney is rebounding steadily, driven by extreme supply constraints and improved borrowing sentiment. Affordability limits, however, remain a firm cap on rapid acceleration.
Melbourne Melbourne’s recovery continues at a measured pace, supported by improving affordability and strong population growth. Momentum is shifting gradually from “stabilising” toward “strengthening.”
Futureland insight: Both cities reward quality, scarcity and long-term holding, not speculative short-term plays.
Lifestyle Markets — Sunshine Coast & Gold Coast
Lifestyle-driven markets continue to outperform due to sustained migration and limited supply.
Sunshine Coast house prices: ~+9–10% YoY
Gold Coast prices: ~+6–10% YoY
Vacancies: ~1.3%
Rents have risen 50–60% since 2020, though growth is now moderating from peak levels.
Futureland insight: These markets favour design-led, well-positioned projects — generic stock is increasingly vulnerable.
INTEREST RATES — A TAILWIND, NOT A TURBOCHARGER
Recent rate cuts have improved sentiment and borrowing capacity, but this is not a return to a 2021-style surge.
The primary impact has been psychological:
Confidence is returning
Buyers are re-engaging
Developers are reassessing stalled projects
However, construction costs, planning delays and feasibility constraints remain material.
This is a selective cycle — not a reckless one.
WHAT THIS MEANS HEADING INTO 2026
For investors Affordable, investment-grade assets — particularly well-located units in Brisbane, Adelaide and Perth — continue to offer the strongest risk-adjusted upside.
For developers Rising rents and strong absorption rates support medium-density and infill projects, but feasibility discipline is essential. Not all sites work under today’s cost environment.
For homebuyers Competition remains strong in supply-constrained suburbs. Selective opportunities persist in Melbourne and parts of Perth, while Brisbane and Adelaide remain highly competitive.
FUTURELAND STRATEGY OUTLOOK
At Futureland, our focus remains on:
Supply-constrained locations
Medium-density and infill opportunities
Projects that work under today’s cost environment, not yesterday’s assumptions
Assets aligned with long-term demographic demand, not short-term noise
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 market momentum, but this is no longer a market where “any asset will do.” Supply constraints, affordability ceilings and construction realities are reshaping where growth occurs.
Brisbane, Perth and Adelaide continue to lead, while Sydney and Melbourne move upward at a steadier, more sustainable pace.
