Whilst strength and adversity are forever present, several decades of historical evidence says that a standard Australian house has tripled in value (or better) in each block of 20 years since WW2.
That is an important reminder that ‘compounding’ is one of the most powerful forces in the world.
For asset values to triple over a 20-year period, an average annual growth rate of 6 percent is required.
5 out of 8 capital cities produced that capital growth rate milestone in the calendar year just gone.
As flagged by Propertyology earlier in the year, Darwin (18 percent) led the capital cities in 2025.
Perth (13 percent), Brisbane (12 percent) and Adelaide (9 percent) again performed very strongly in 2025.
The compound growth in house values in those three cities over the last 5 years nudges 90 percent.
Sydney increased by 6 percent in 2025, and 55 percent over the last 5 years.
The property markets of each of the other 3 capital cities were steady, with growth of 3 to 5 percent in 2025.
As happens pretty much every year, the best-performed property markets were among the hundreds of regional locations.
With approximately 20 percent capital growth in 2025, those sitting at the very top of the national ladder were Albany WA, Port Augusta SA, Townsville QLD, Geraldton WA, Murray Bridge SA, Mildura VIC and Mackay QLD.
It seems appropriate to frame the 2026 calendar year as the YEAR OF 6’s.
This research report lists more than 66 locations whose property markets are likely to produce at least 6 percent growth in the 2026 calendar year.
And we’ll also address that question: “Where is the next Perth?”
But first, some valuable reflection
Rates of growth from one city to another varies widely from year to year, but history proves that cumulative growth over a prolonged period has been significant for every Australian generation.
The value of a standard house tripled in many of Australia’s 400+ townships over the 20-years ending 2025.
Statistical evidence confirms that ‘market stability and volatility’ contradicts public perceptions.
Using 6 very different cities as examples, the below table confirms that the property markets of Sydney and Perth (capital cities) are officially more volatile than Adelaide and the regional jurisdictions of Orange, Launceston and Scenic Rim.
Calendar year property market performance: 20ye 2025
| VALUE DECLINED | 0-6% GROWTH | 7-9% GROWTH | >10% GROWTH | |
| [BUST] | [NORMAL YEAR] | [BOOM] | [SUPER BOOM] | |
| Sydney NSW | 6 | 5 | 3 | 6 |
| Perth WA | 8 | 3 | 3 | 6 |
| Adelaide SA | 2 | 11 | 3 | 4 |
| Scenic Rim QLD | 4 | 8 | 3 | 5 |
| Launceston TAS | 3 | 7 | 5 | 5 |
| Orange NSW | 1 | 13 | 3 | 3 |
On mobile? Scroll across to see all columns.
The first 5 years of the current 20-year period (2020 to 2039) started very strongly.
Despite significant economic disruption and the international border being closed for 2 of the last 5 years, the combined capital city house value increased at an average annual rate of 7.4 percent per year.
Looking ahead, assuming 6 percent continues to be the average annual rate of growth, a house purchased in 2026 for circa $750,000 will be worth $2.4 million in 20 years’ time.
On its own, the accumulated equity of $1,650,000 from such an investment in 2026 will not be sufficient to fund a quality retirement lifestyle in future years.
But it certainly will provide a good foundation.
More than 6% growth in 2026
All things being equal, Darwin will be the only capital city to produce double-digit growth.
Property market sentiment in the Top End is currently being driven by ill-informed actions of property investors. Momentum for the time being is strong, and I believe it will drive growth of approximately 20 percent in the year ahead.
Assuming interest rates continue to remain stable, the stronger local economies of Adelaide, Brisbane and Perth will underpin more than 6 percent growth in house values in 2026.
And Sydney and Hobart might also push into the 6 percent bracket.
In 2026, real estate activity in Canberra and Melbourne (the current economic cellar-dwellers) will produce mild improvements on their 2025 performance.
Australia’s very best performed property markets in 2026 will, once again, be beyond the concrete jungles of capital cities.
Here are more than 66 townships that I forecast to produce at least 6 percent capital growth in 2026.
SOUTH AUSTRALIA
>6% Growth:
Victor Harbor, Whyalla, Greater-Adelaide
>10% Growth:
Adelaide Hills, Barossa, Goolwa, Kadina, Mount Barker, Mount Gambier, Murray Bridge, Port Lincoln
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VICTORIA
>6% Growth:
Ararat, Bendigo, Leongatha, Mildura, Shepparton, Swan Hill, Wangaratta, Wodonga
>10% Growth:
Benalla
TASMANIA
>6% Growth:
Burnie, Devonport, Greater-Hobart, Launceston, Triabunna
QUEENSLAND
>6% Growth:
Beaudesert, Gold Coast, Gympie, Port Douglas, Sunshine Coast
>10% Growth:
Airlie Beach, Bundaberg, Cairns, Gladstone, Goondiwindi, Hervey Bay, Innisfail, Mackay, Maryborough, Rockhampton, Toowoomba, Townsville, Warwick, Yeppoon, Greater-Brisbane
NEW SOUTH WALES
>6% Growth:
Albury, Armidale, Ballina, Bathurst, Cessnock, Coffs Harbour, Dubbo, Goulburn, Griffith, Orange, Wagga Wagga and Greater-Sydney
>10% Growth:
Gunnedah, Maitland, Muswellbrook, Tamworth
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WESTERN AUSTRALIA
>6% Growth:
Broome, Kalgoorlie, Karratha, Mandurah
>10% Growth:
Albany, Bunbury, Busselton, Esperance, Geraldton, Greater-Perth
6 Future Trends
Low volumes of housing supply to continue
Low volumes of housing supply to continueFrom the start to the end of the last 10-years, Australia’s population increased by 8 million while the total number of properties listed for sale (resale supply) decreased from 339,000 to just 228,000 (a decline of 33 percent).
The volume of properties advertised for rent (rental supply) fell 47 percent (from 71,200 to 37,700).
Rising taxes
Rising taxesI believe we are now in the early stages of an era of modest national economic growth, socialist policies, a concerning absence of strong visionary leaders who encourage aspirations and increased taxes.
Improved homeownership rates
Improved homeownership ratesOriginally introduced by ScoMo in 2019, the federal government’s expansion of the First Home Deposit Scheme (FHDS) from 1 October 2025 is intended to increase the volume of eligible first home buyers. While still required to satisfy Australia’s very prudent credit policy requirements, budding homeowners can now get their first foot on the property ladder with a deposit as small as 5 percent and without paying lender’s mortgage insurance. This lateral thinking policy does not cost taxpayers and provides people with the freedom to select a home of their choosing (new or established), up to certain value thresholds. I anticipate first home buyer activity to increase from the historical average of 110,000 per year to closer to 150,000 – a big win for Australia’s homeownership rates. That extra 40,000 equates to an overall annual increase in real estate transaction volumes of about 7 percent.
Rising unemployment
Rising unemploymentI will not be surprised if the national unemployment rate gradually increases from the current 4.3 percent towards 5 percent.
Neighborhood butchering
Neighborhood butcheringThe collective property sector buffoons continue to force higher density, despite indisputable evidence confirming that very few owner-occupiers buy those sardine cans.
Gen X will become more proactive
Gen X will become more proactiveMany of the 5-million Australians currently aged 46 to 60 are acutely aware that their portion of the $4 trillion national superannuation pool will not be sufficient to adequately support the next exciting chapter of their life. Already with sizeable equity in real estate, Gen X is well placed to make same game-changing decisions in 2026 [here’s how].
Be prepared to compete hard
Looking ahead for Australia in a general sense, we have good reason to expect employment to remain stable and the RBA cash rate to hover between 2.8 and 4 percent.
Assuming there aren’t any left-field political attacks on financial aspirants, those aforementioned factors will support solid activity from real estate buyers for the foreseeable future.
As mentioned earlier, the FHDS innovation may bring an extra (say) 40,000 buyers into the market, creating potential for the total volume of residential real estate transactions to push towards 580,000 in 2026.
For perspective, the strongest year on record was 620,000 in 2021 compared to 490,000 transactions in 2023 during the RBA’s vicious rate hikes.
Existing asset owners will continue to put their sizeable household equity to good use through home upgrades and / or investment property acquisitions.
The national rental pool desperately requires a drink!
Broadly speaking, real estate buyers will be competing for near-record low volumes of properties listed for sale.
As with every year, the individual needs of a large majority of property buyers will always be mostly met by established dwellings (not new builds).
But, unless state governments cease clipping tickets and charging buyers stamp duty of between $40,000 and $90,000, the very low supply volumes will indefinitely remain.
Where’s the ‘next Perth’ ?
The word on the street is that everyone wants to know where ‘the next Perth’ is.
While Perth is a glorious city, it is a low bar to set when comparing property markets across this 6th largest country in the world.
Perth’s recent growth has been great, but there are many other locations with a similarly impressive performance and a lower risk property market profile.
Long-term history contains compelling evidence that Perth has always been one of the highest risk property markets in all of Australia.
A far more intelligent question would be: “Which location represents great potential to invest my capital in 2026?”
The answer to that question has stuff-all to do with capital cities, regions, coastlines, population growth, nor which city a bunch of naïve fools believes is ‘due’ for growth. Performance has nothing to do with ‘taking turns’.
One thing is for certain – Melbourne’s capital growth rate will remain anchored in the bottom half of Australia’s 400+ townships.
As it did in 2025, Melbourne’s property market will produce some growth in 2026. But a lifetime of formal studies of property market performance has taught me that the precursor for an individual city’s property market growth has always been local economic growth.
Melbourne’s return to a nation leading economy is (still) nowhere on the horizon.
Key considerations for a truly intelligent property investment decision include:
- each township’s economic growth prospects for the next 5-years (it’s impossible to forecast beyond that),
- the degree of economic diversity in each of Australia’s 400-townships,
- the net annual holding costs for a typical house (avoid apartments), and
- concentration risks associated with each individual investor’s asset portfolio.
The window to make a truly intelligent property investment decision somewhere in Australia for less than $700,000 is pretty much closed (forever).
It’s Propertyology’s core business to know this.
In 2026, striking a responsible balance between capital growth potential, reasonable holding costs and minimising market risks, will require property investors to work within a purchase budget of between $750,000 and $850,000 for a well-chosen investment property.
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6 Fun Facts about Australia [10YE 2025]
Jobs created: 2,900,000
Population growth: 3,835,400
Core increased housing demand [2.6 people / household]: 1,460,000
Residential real estate sales: 4,998,977
Household equity in residential real estate: $7.8 trillion or 70 percent ($11.1T assets – $3.3T liabilities)
Aged pension annual expense to taxpayers: $70 billion
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