You can feel it every time a new listing appears — that sense of panic, the rush of enquiries, the silent race to outbid the next person. Australia’s housing market, already stretched to breaking point, is heading for another sharp rise in prices, and this time, it could hit six figures.
Property Prices Poised for Major Jump
Analysts warn that Australian home prices could jump by more than $100,000 over the next two years, driven by a deepening housing shortfall and a surge in demand that supply simply can’t match, reports Realestate.
The latest forecast from Oxford Economics Australia predicts property values will climb by 9.4% nationally by 2026, with the median dwelling price expected to reach nearly $875,000. The growth will be uneven across regions, but the trend is clear — the market is tightening fast.
Major cities like Sydney, Melbourne, and Brisbane are projected to lead the charge, while even smaller capitals such as Adelaide and Perth are expected to see strong gains as buyers compete for limited stock.
Housing Supply Falling Behind
The heart of the problem is supply — or rather, the lack of it. Australia’s population is growing rapidly due to strong migration, but new housing construction has failed to keep up. Building approvals have dropped sharply, and many projects are being delayed or cancelled due to high material costs and labour shortages.
According to Oxford Economics, the country will be short around 120,000 homes by 2027, creating the kind of scarcity that inevitably pushes prices higher. Renters are already feeling the impact, with national vacancy rates hovering near record lows.
Even government housing targets — such as the federal plan to build 1.2 million new homes over five years — are looking increasingly difficult to meet given current construction bottlenecks.
Buyers and Renters Both Squeezed
For would-be buyers, the news feels deflating. Many had hoped rising interest rates would cool the market long enough for prices to settle. Instead, affordability is worsening again.
At the same time, renters face higher competition and fewer choices, with many turning to smaller or more distant suburbs in search of something remotely affordable. The squeeze is particularly severe in capital cities, where demand from new arrivals continues to climb.
No Easy Fix on the Horizon
Economists say it’s unlikely the situation will ease anytime soon. With interest rate cuts still months away and construction struggling to ramp up, both buyers and renters are bracing for another expensive year.
Government initiatives to boost supply and support first-home buyers could help at the margins, but without a major increase in housing completions, the imbalance will persist.
Australia’s property market has always been competitive — but this next wave of growth looks less like a boom and more like a warning. For many, the dream of home ownership is slipping further out of reach, one auction at a time.
