If 2024 was about survival and 2025 was about momentum, this year felt like the sorting hat for the property market. Some cities surged, others stalled, and brokers were left navigating a far more uneven landscape than the headlines suggest.

This wrap-up pulls together what actually happened in 2025, why it happened, and what matters most as we head into 2026 in plain English, with no economist fog.

The Big Picture: 2025 Was Strong…But Not Even

Nationally, home values finished 2025 up around 8-9%, with combined capital cities reaching new record highs. However, headline figures only tell part of the story and when broken down by city and region, the uneven nature of the market becomes clear.

Price levels show where the market sits today but growth rates reveal where momentum actually occurred in 2025.

What the data shows:

• Darwin (+18.9%) stole the crown
• Perth (+15.9%) and Brisbane (+14.5%) stayed hot
• Sydney (+5.8%) and Melbourne (+4.8%) underwhelmed
• Combined capitals: ~8%
• Combined regionals: ~9–10%

This wasn’t a “rates-cut-and-everything-goes-up” year. It was a supply-and-migration-driven market, and that theme isn’t going away anytime soon.

Why Some Cities Ran Hard (and Others Didn’t)

1. Supply is Still the Boss

Australia finished 2025 with a housing shortfall north of 150,000 dwellings, and construction completions actually fell. That matters because:

• Fewer new homes = more pressure on existing stock
• Tight listings keep prices supported even when sentiment softens
• Rents stay elevated, pulling investors back in

In markets where supply is structurally tight (Perth, Brisbane, Adelaide, Darwin), prices had room to run.

2. Migration Picked Winners

Interstate and overseas migration didn’t spread evenly.

• WA and QLD kept attracting people and capital
• NSW continued to lose residents interstate
• Victoria stabilised, but confidence lagged

Darwin’s result looks extreme, but it makes sense when you combine:

• Very low stock
• Defence and resource investment
• Strong yields
• A small market that moves fast when demand turns on

3. Interest Rates Stopped Helping – But Didn’t Hurt (Yet)

The RBA held rates steady for most of 2025 after earlier cuts gave buyers breathing room. That lifted borrowing capacity once, then plateaued.

Key point for brokers:

Price growth in 2025 was driven more by shortages and policy than by credit expansion.

Looking forward, Oxford Economics expects rates to stay on hold through most of 2026, with borrowing capacity no longer doing the heavy lifting.

The Sydney & Melbourne Reality Check

Sydney and Melbourne didn’t fall, but they lost momentum. Why?

• Affordability ceilings are real (50%+ of income in Sydney for mortgages)
• Listings lifted slightly
• Buyer psychology shifted from FOMO to “wait and see”

These markets are now rate-sensitive again, which means:

• Upside is capped without further rate relief
• Units and lower-quartile stock outperform houses
• First-home-buyer schemes matter more than ever

For brokers, this is less about volume spikes and more about deal complexity – structuring, guarantees, and policy navigation.

First-Home Buyers Are Back (And Changing the Market)

Government support expanded materially in late 2025:

• 5% Deposit Scheme widened
• Help-to-Buy rolled out
• Price caps lifted in key cities

Result?

• A surge of FHB demand at the lower quartile
• Stronger competition for entry-level units and townhouses
• Flow-on activity as sellers trade up

Important nuance: These schemes bring demand forward. The first buyers in benefit most. Over time, they can actually worsen affordability, which is exactly what we saw in pockets late in 2025.

Investors Quietly Re-Entered

Investor lending jumped nearly 20% year-on-year in 2025, driven by:

• Rents still rising faster than wages
• Vacancy rates near historic lows
• Yields improving relative to bonds

That said, this is not a speculative boom. Investors are:

• More yield-focused
• More selective by postcode
• Leaning toward units in some capitals

This sets up a very different dynamic for 2026 than the last investor cycle.

So…What Actually Lies Ahead in 2026?

Here’s the straight talk.

What’s Likely:

• Price growth slows, not reverses
• Combined capitals up around ~5%
• Perth, Brisbane, Adelaide still outperform
• Sydney & Melbourne stay positive but muted
• Units outperform houses in affordability-strained cities

What’s Not Likely:

• A broad-based downturn
• Forced selling en masse
• A return to double-digit national growth

Why? Because we still haven’t fixed supply and that’s the anchor under the market.

What This Means for Mortgage Brokers

2026 is shaping up as a broker’s market, not a volume sugar-hit. Success will come from:

• Navigating government schemes properly
• Structuring deals under tighter DTI and serviceability rules
• Understanding where growth still exists (not just if)
• Helping clients make timing decisions, not emotional ones

In short: Less frenzy. More advice. More trust. And honestly? That’s a healthier place for the industry.