Australia could have five capital cities with median home prices north of $1 million by next year, with one property expert saying the nation was entering yet another growth phase.
Rethink Group CEO Scott O’Neill said that Sydney and Melbourne would reclaim market dominance in 2026 after playing second fiddle to smaller markets.
“We’re post-downturn and pre-recovery,” he said.
“Historically, the highest returns come from buying exactly where we are now after adjustment, before the rush.
“Population is growing, supply remains constrained, interest rates are easing, and borrowing power is expanding.
“The smart money isn’t waiting, it’s positioning now.”
Rethink Group CEO Scott O’Neill
O’Neill said that “Sydney and Melbourne are back”, with Melbourne forecast to lead house price growth with 5.2 per cent this year and 6.6 per cent in 2026, reaching a median of around $1.1 million.
Sydney will follow closely, he said, with 7.8 per cent growth, pushing its median to approximately $1.83 million.
The October PropTrack Home Price Index had median home values (houses and units combined) at $1.228 million in Sydney and $846,000 in Melbourne.
Sydney may see 7.8 per cent home prices growth Photo – iStock
Southeast Queensland will remain a powerhouse, O’Neill predicts.
The Brisbane median house price hit $1.126 million in October, according to the latest PropTrack Home Price Index, while the median home price (houses and units combined) hit $976,000.
Brisbane and southeast Qld are tipped to remain powerhouses Picture: Supplied by Knight Frank
The Gold Coast and Sunshine Coast will continue to dominate high-growth markets, driven by infrastructure investment and lifestyle appeal, he said.
Meanwhile, Adelaide and Perth will also hit record highs, approaching or exceeding $1 million, though growth is moderating after two years of double-digit gains.
The median home value in Adelaide, according to PropTrack, is now $880,000, while in Perth it is $899,000.
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117 Hart Street, Semaphore, in South Australia is listed for $1.1m
“If you’ve been waiting for a crash, you missed the bottom. It has already happened,” O’Neill said.
“The next two years will reward investors who buy quality assets before the borrowing capacity surge.”
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Price Predictions for 2026
•Sydney: $1.83 million median (up 7.8%)
•Melbourne: $1.1 million (up 6.6%)
•Brisbane: $1.09 million (up 6–8%)
•Adelaide: $1.05 million (up 5–6%)
•Perth: $950,000–$1 million (up 5–6%)
•Regional QLD, NSW and VIC: up 5–8% depending on infrastructure and supply-side pressures
•Tasmania and Northern Territory: up 3–5% driven by affordability and tight vacancy rates
Source: Rethink Group
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O’Neill warned that falling interest rates and relaxed lending buffers would only reignite buyer competition.
“The Reserve Bank of Australia (RBA) is expected to cut toward 3 per cent by late 2026, significantly boosting borrowing capacity and demand,” O’Neill said.
The property investment and financing company research also shed light on the likely hotspots for investors in 2026.
“Investors are now targeting A-grade residential and commercial assets in high-growth local government areas (LGAs) that combine strong yields, infrastructure investment, and limited future supply,” O’Neill said.
6 Blaxland Place, Narangba, in Brisbane’s north will go to auction
O’Neill said demand was building in both capital cities and select regional hubs.
“We analyse markets primarily at the LGA level rather than single suburbs,” O’Neill said. “That allows us to identify infrastructure pipelines, employment nodes, and demographic shifts that drive long-term growth.”
O’Neill said Sydney and Melbourne were the “smart money strategy” for maximum growth in 2026, while southeast Queensland would offer sustained momentum while Perth and Adelaide would see record highs.
“2026 will be defined by clarity and confidence,” O’Neill said.
“The data shows we’re past the bottom. Investors who act now will look back on this as the turning point.”
4 Camelia Way, Pakenham, in Victoria has a price guide of $715,000-$785,000
The research comes after Ray White senior analyst Atom Go Tian said a new phase of price growth was “emerging”.
“The emerging fourth phase suggests the future belongs to regions that combine both lifestyle appeal and economic substance,” he said.
Mr Go Tian said the lesson from the last decade was clear – “sustainable regional growth requires either extreme affordability, genuine employment drivers or, increasingly, both”.
New boom regions: Where to buy now before prices explode
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Rethink Group’s top picks for 2026
Key growth LGAs for 2026 include:
•Queensland: Moreton Bay, Ipswich, and the Sunshine Coast
•New South Wales: Shoalhaven, Wagga Wagga, and the Central Coast
•Victoria: Greater Bendigo, Ballarat City, and the City of Casey (South-East Melbourne corridor)
•South Australia: City of Charles Sturt, Onkaparinga, and Salisbury
•Western Australia: Swan, Mandurah, and Stirling
•Tasmania: Launceston, Hobart, and West Tamar
•Northern Territory: Palmerston, Darwin, and Litchfield
Top Suburbs Set to Boom in 2026
Based on affordability, infrastructure projects, yield compression, and population inflows, Rethink Group’s top picks for 2026 are:
•Queensland: Caloundra West, Narangba, Buderim, Ripley, Morayfield
•New South Wales: Nowra, Toukley, South Dubbo, Gobbagombalin, Armidale
•Victoria: Frankston South, Craigieburn, Delacombe, Golden Square, Pakenham
•South Australia: Semaphore, Christies Beach, Paralowie, Lightsview, Nairne
•Western Australia: Dudley Park, Ellenbrook, Innaloo, Rivervale, Bayonet Head
•Tasmania: Kings Meadows, Trevallyn, Legana, Youngtown, Riverside
•Northern Territory: Durack, Rosebery, Zuccoli, Nightcliff, Coolalinga
3 Antonino Drive, Rosebery, in the NT has a price guide of $895,000
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