CBRE: Home prices set to rise in 2026 as local demand surges

Scott Kuru November 26, 2025 4 min read

Image by Julian Andrews

KEY POINTS

A national survey of valuers has found they are strikingly optimistic about the property market, with nearly nine in ten expecting house prices to rise in 2026
Valuers report locals - not recent overseas and interstate migrants - are dominating buyer activity, led by first-home buyers, investors and upgraders
Affordability is reshaping buyers' choices, with increasing demand for townhouses, villas and apartments, while avoiding homes that need renovation

A survey of valuers working in local markets across Australia has delivered some fascinating insights into the current make-up and mindset of property buyers.

The findings are contained in international property giant CBRE’s latest "Residential Valuer Insights” for the fourth quarter of 2025.

The report brings together on-the-ground intelligence from 122 CBRE property valuers - professionals who assess values daily.

Valuers overwhelmingly bullish about 2026

Property valuers are overwhelmingly optimistic that the Australian residential property market is poised for growth in 2026.

The CBRE report reveals a dramatic surge in their confidence throughout 2025.

The percentage of valuers expecting positive house value growth jumped from 55% in the first three months of the year to nearly nine out of ten by the fourth quarter of 2025.

Looking ahead, 86% of valuers expect house values to grow in 2026, while 62% expect apartment values to increase.

Just over three-quarters expect vacant land values to increase, with only 1% expecting a decline.

59% of valuers also say they expect demand to increase over the next year, with only 2% anticipating a decrease.

CBRE explains this widespread optimism as being underpinned by economic conditions, with many valuers pointing to interest rates as a key factor.

“Market sentiment has improved across most segments in response to interest rate declines and expectations of further to come,” an unnamed valuer from the Illawarra region of New South Wales is quoted as saying.

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Valuers in Adelaide were the most bullish, with 100% expecting house price growth of at least 5 to 10% in 2026, with 20% expecting value uplifts of more than 10%.

Around 75% of valuers in Brisbane expected growth of 5 to 10%.

Around 2/3rds of valuers familiar with conditions in Sydney’s outer suburbs expected house price growth in the 5-10% range next year, while around 55% expected that quantum of growth closer to Sydney’s CBD, with a small number expecting growth to exceed 10%.

Surprisingly, less than 40% of valuers in the Melbourne market expected growth in the 5 to 10% range next year, despite property in the Victorian capital widely regarded by economists and analysts as undervalued and overdue for a strong growth phase.

For apartments, the most significant value growth is anticipated in Brisbane, the Gold and Sunshine Coasts and Perth.

Locals, not migrants, are buying big

CBRE’s Residential Valuer Insights reveals several surprising trends about who is buying property and what they're buying.

Contrary to the common narrative that migration is a primary driver of property purchasing, CBRE valuers reported the most active buyers in their respective markets are overwhelmingly local residents.

The survey data shows that first-home buyers, local investors and “upgraders” (owner-occupiers searching for larger homes in their local areas) were consistently the most active buyer types throughout the year.

71% of valuers reported first-home buyers as active, 58% cited local investors, and 52% said they were seeing activity from upgraders.

Crucially, the CBRE report identifies recent overseas migrants and interstate migrants as the least active buyer groups all year.

Affordability pushes buyers towards smaller dwellings

While established and new houses remained the most sought-after properties for most of 2025, CBRE says the end of the year saw a surprising shift, as buyers increasingly turned their attention to more affordable options.

The survey reveals a notable increase in demand for villas, townhouses and apartments in the fourth quarter of 2025.

More than a third of valuers surveyed said they’d seen increased interest in villas and townhouses, while just over a quarter reported more focus from buyers on apartments.

The report says this surge in interest in smaller dwellings was "likely driven by the extension of the 5% Deposit Scheme for first-home buyers."

It’s a trend that shows how affordability pressures are actively reshaping buyer priorities and forcing many - particularly those entering the market for the first time - to broaden their search for a home beyond a traditional freestanding house.

The report quotes a CBRE valuer from Canberra as saying, “First-home buyers are highly active.”

“Townhouses are now on the radar of this cohort of buyers.”

Renovation refusal

CBRE’s Residential Valuer Insights also shows that buyers are demonstrating a clear and consistent preference for finished, “turnkey” properties over those requiring significant renovations.

The report says that "unrenovated properties and properties in secondary locations experienced the largest decrease in demand," a trend that held steady throughout 2025.

In contrast, valuers consistently reported that demand favored "established houses," "new houses" and "recently renovated properties."

“High-quality renovated and extended character homes are still in high demand and are selling within a short marketing or auction campaign,” says a valuer from the Adelaide Hills.

This aversion to “fixer-uppers” likely reflects not just a desire for convenience, but also a pragmatic response to high construction costs and skilled labor shortages, which have made renovating a costly undertaking.

It also goes to affordability pressures; when a buyer's budget is stretched to the limit to secure a property, there’s little financial capacity or risk appetite left for the unknowns of a major renovation.