Property prices keep climbing, with further gains expected. But brokers say a slowdown is unlikely.
"People still need a place to live, right?" Larissa Barton, Mortgage Choice Noosaville and Sunshine Coast franchise owner, told Australian Broker. "So if they can afford to borrow the money and make the repayments that come with that, they'll keep doing it."
But following the Reserve Bank of Australia’s (RBA) recent rate hike — which lifted the official cash rate (OCR) to 3.85% — and amid a persistent housing shortage, both house prices and borrowing costs are rising rapidly.
According to ANZ's February Housing Outlook, the lender forecast house prices across Australian capital cities will rise 4.8% in 2026, followed by another 3.8% increase in 2027. Meanwhile, prices in smaller capital cities — such as Brisbane, Perth, Darwin and Adelaide — are expected to jump 6% in 2026.
"In these smaller capitals, total listings are more than 50% below normal for this time of year," Madeline Dunk, an economist at ANZ, wrote in the report. "This is keeping these markets tight and placing upward pressure on prices."
Some relief is anticipated in Melbourne and Sydney, where prices are expected to rise at a slower rate of 3% in 2026. But with values already elevated, even modest growth adds to an already expensive market.
Borrowers and brokers have already started to notice the effects, and found creative ways to navigate a shifting market.
"We're certainly seeing prices rise on the Sunshine Coast," said Barton, whose client base spans the Sunshine Coast, Noosaville, Noosa, Tewanti and north to Gympie.
"Since we've had such a boom in the Sunshine Coast since COVID-19, most first-time homebuyers are priced out of the north end of the Sunshine Coast," she explained. "We've had a massive influx of people moving out of Sydney to come here as well. So buyers are having to look at different places. They start looking further north, in places like Gympie. They have to reassess where they're going to live to be able to buy property.
"I don't think that last interest rate increase will deter people [from entering the market] too much," the broker said. "If we have a second increase, it will probably start to have a bit of an effect. So we're realistic about what people can afford and then they go out and they find something."
Barton added that house prices will likely continue to rise in and around the Sunshine Coast. "I just don't know at what pace," she said.
Paul Katranis, founder and director of Adelaide-based brokerage SA Wealth, agreed, the recent rate rise was "just a drop in the ocean."
"It just means that the borrowing capacity is going to be lesser and only by an immaterial amount," he explained. "Supply is not there and there's more population as well, so there's more transactions, more activity, more people.
"Everyone I've spoken to this year — and us in particular — it's been the busiest start to the year ever. And I mean — ever," Katranis continued. "I've spoken with people in finance, different disciplines, and also construction as well, and all forms of property are firing. There's still homebuyers, downsizers, upgraders, new home builds, developers. It doesn't seem to be slowing down."
Queensland and South Australia are running particularly hot, Katranis said, thanks to new infrastructure projects, such as the upcoming 2032 Olympics in Brisbane.
"The cities that don't have any initiative or spend infrastructure-wise, they're going to suffer," he said.
Grant Arbuckle, managing director at Melbourne-based Loan Studio, said his firm is "pretty bullish" on both South Australia and Queensland.
"Queensland is still incredibly hot. And it's not just Brisbane," he said. "But up through the Gold Coast, Sunny Coast, all the way up that whole corridor along southeast Queensland we're seeing growth.
"I think lifestyle is a big part of it," Arbuckle said. "Also, the lack of land supply is making it harder for people to get in, and that's then driving up prices when land becomes available, which is why we're seeing clients go that direction, while we're expanding those directions as a brokerage as well."
