Australia’s housing market opened 2026 in resilient form, with Ray White data showing prices continuing to rise even as speculation grows about another Reserve Bank cash rate hike.
National house prices edged up to $973,000 in January, while unit values rose to $746,000. That leaves annual growth running at 12.5% for houses and 9.1% for units, underlining how intense competition for limited stock is still outweighing rate jitters.
Ray White Group chief economist Nerida Conisbee (pictured) says the key message from January is that behaviour has not yet adjusted to the shift in interest rate expectations.
“What stands out in the January data is that higher rate expectations do not yet appear to have been priced into the market,” Conisbee said, with buyers still acting as if “borrowing costs would remain unchanged.”
With the cash rate at 3.6% after three cuts last year, borrowers are still hoping for relief, but sticky inflation and a tight jobs market have many bracing for higher‑for‑longer costs.
The same hotspots that have powered this upswing remain in front. Perth and Darwin again recorded the fastest annual house price gains, with increases close to 20%, while Brisbane also posted strong results. Monthly rises across these cities suggest demand is still absorbing very lean listing volumes.
Adelaide, the Gold Coast, and the Sunshine Coast are also registering ongoing increases, though at a gentler pace.
Among the larger capitals, growth is cooler but still positive: Sydney, Melbourne, and Canberra are running below the national average for annual gains, reflecting softer local economies and slower population growth, yet prices there continue to edge higher rather than roll over.
Regional markets are doing plenty of heavy lifting. House prices outside the capitals rose again in January, pushing annual regional growth above 12%. Regional Western Australia and South Australia stand out, supported by low stock and persistent demand that keep the market less sensitive to shifting rate talk.
Apartments are following a similar script. Perth, Brisbane, and Adelaide are delivering the strongest unit price increases, while Sydney and Melbourne are posting milder growth.
Nationally, unit values are now more than 9% higher than a year ago, highlighting the depth of demand in a segment where new building remains constrained.
Conisbee cautions that resilience doesn’t mean the market is immune to higher borrowing costs.
“While prices have held firm so far, this does not mean higher rates would have no impact if delivered,” she said, noting that “a rate rise would be expected to slow activity, particularly in more interest-rate-sensitive markets.”
For now, though, Conisbee argues the slowdown phase hasn’t started.
“What January’s data suggest, however, is that the adjustment has not yet begun. Unlike last year, expectations alone have not been enough to alter behaviour,” she said.
Listings remain scarce and construction is “well short of what is needed to keep up with population growth.” In that environment, even if higher rates sideline some buyers, Conisbee expects the impact to show up as gentler price growth rather than outright declines.
“As a result, any slowing driven by higher rates is more likely to appear as a moderation in price growth rather than a sharp fall,” she said.
For now, January’s figures show house and unit prices are still pushing higher, even as the rate outlook for 2026 turns more challenging.
Australia’s broader outlook also remains upbeat, with KPMG forecasting national house prices will jump 7.7% in 2026 despite stretched affordability and ongoing uncertainty over interest rates.
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