The Australian housing market has splintered into a multi-speed economy as the first quarter of 2026 concludes, with Sydney and Melbourne entering a cooling phase while mid-sized capitals reach record territory.
According to Cotality's national home value index, dwelling values rose 0.7% in March, anchoring a 2.1% quarterly increase.
However, this national average masks a widening gulf between states; Perth values rose 7.3% over the quarter—adding roughly $69,000 to the median price—while Melbourne and Sydney values retreated by 0.9% and 0.4% respectively from their late 2025 peaks.
Cotality Research Director Tim Lawless noted that the softening in major hubs coincides with rising advertised supply and dwindling auction clearance rates.
Sydney's market has bifurcated along price lines; while the upper quartile fell 1.8%, the lower quartile rose by the same margin as serviceability constraints push buyers toward more affordable entry points.
The demand for "attainable" housing is further evidenced by a 2.1% spike in quarterly rents amidst a 1.6% vacancy rate.
Regional markets, particularly Regional WA, continue to show resilience, with Bunbury recording a staggering 22.2% annual gain.
Despite the pockets of heat, overall purchasing demand is trending 5.6% below the five-year average.