The national population increased by 2.3 million over the last 6-years while, conversely, the total supply of properties listed for sale is now a whopping 27 percent less than the same time 6-years ago.
Contrary to some media commentary, property market conditions are currently as tight as a mouse in a matchbox.
Capital growth rates of between 10 and 20 percent in the 2026 calendar year is increasingly probable for many of Australia’s 400+ townships.
Official statistical evidence displayed in the below chart is consistent with what is observed at the coalface each day by Propertyology national buyer’s agents.
Moreover, a national rental pool with just 43,850 properties available in December 2025 is an incredible 48 percent decline from the 84,591 available at the same time 6 years ago.
The current real estate pressure reading is as high as it was during the H2-2020 to H1-2022 super-boom, when asset values increased by 25 to 40 percent.
Property market strength will continue in spite of the recent increase in oil prices.
Household finances are incredibly strong
The RBA recently published some household finances data for December 2025, and it confirms:
- Total home equity: 71 percent [dwelling values of $11.8 trillion, loan values of $3.4 trillion]
- Total deposits: $1.9 trillion [mortgage offset balances, cash accounts, etc]
- Home loan arrears: 7% of loans [90+ days in arrears]
At the end of the 2025 calendar year, Australian residential mortgage holders had a whopping $14.9 billion in excess home loan repayments.
That reserve represents a huge financial cushion for borrowers and is nearly triple the $5.8 billion held at the same time 6 years earlier.
Household incomes are also very stable as evidenced by this very strong job data:
- Job volume growth:6 million extra jobs [from 14.5m in Dec 2019 to 16.1m in Dec 2025]
- Unemployment rate: very low at 4.1% [any rate below 6% is strong]
- Job vacancies: 214,800 [this figure from March 2026 represents a 7% increase over 12-months]
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Strong household finances and stable incomes (labour market conditions) ultimately determine real estate activity.
Housing demand is the volume of buyers from a collection of home upgraders, lifestyle chasers, first home buyers and goal-setting investors.
Regardless of oil prices, housing will never go out of fashion.
Pressure makes property diamonds!
Aside from the Bass Coast along Victoria’s east coast and Mount Isa in remote north-west Queensland, the median house value increased in every Australian township during the 2025 calendar year.
The pressure created by the combination of low supply of properties listings and healthy household finances produced property market diamonds across the country.
34 out of Australia’s 50 largest cities saw double-digit rates of capital growth last year.
Over the last 5-years, people who demonstrated financial discipline and who actively pursued their long-term goals will have enjoyed handsome gains through being a borderless property investor.
In every single year, the rates of capital growth from one city to another will vary widely.
Generally speaking, the individual cities with property markets that sparkled the most had the combination of the most robust local economies and very low volumes of supply.
Pick your property ‘gemstones’ carefully
Whilst property market pressure is intense, Australia’s two biggest cities are among a small collection of exceptions for the boom conditions [refer back to the chart at the beginning of this report].
With house values increasing 53 percent over the last 5-years and apartments by 21 percent, Sydney’s property market performance is middle-of-the-pack – more of a white sapphire.
Then there’s the discount bin with cubic zirconias. In relative terms, that’s an accurate description of Melbourne, Australia’s lowest ranked township out of 400+, producing just 10 percent capital growth over the last 8 years.
In comparison, regional Victoria’s Mildura produced 104 percent capital growth over the same 8-years. And similarly ‘gems’ were created in Mackay QLD (94 percent), Mandurah WA (95 percent), 138 percent in regional SA’s Murray Bridge and 102 percent Tasmania’s Meander Valley (nearby to Launceston).
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Buyer activity levels in both Sydney and Melbourne have been solid (each with a smidge over 100,000 properties sold in 2025).
But the relatively high volume of owners offloading their properties in Australia’s two biggest cities means that buyer competition is nowhere near as fierce as it is elsewhere (again, refer Chart 1).
Compared to other parts of the country, Melbourne continues to have the bleakest economic outlook in the country.
Therefore, the chances of Melbourne becoming one of Australia’s best-performed property markets at some stage in the next few years (at least) is absolutely zero!
For the foreseeable future, Sydney and several other locations do not look as bright as umpteen others.
The current volume of jobs advertised in Sydney, Melbourne and Canberra is 30 percent fewer than the same time 6 years ago.
For perspective, the same period has seen an increase in employment opportunities offered in cities such as the beautiful border city of Albury-Wodonga (+20 percent), Bendigo in central Victoria (+36 percent), Dubbo NSW (+50 percent), the WA port city of Geraldton (+30 percent) and the economic superpower of Townsville in north Queensland (+42 percent).
A city’s economic conditions have some connection to people’s movement patterns.
That is certainly the case with Sydney and Melbourne, wherein their net change in internal migration over the last 6 years produced a population decline of 219,000 and 100,000, respectively.
A comprehensive summary of Australia’s latest relocation winners and losers will be shared exclusively with Propertyology clients in an upcoming episode of ‘Connecting The Dots’.
Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.
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