One of Australia’s most recognised property analysts and commentators has released his housing forecasts for 2026, saying he expects capital city home prices to rise between 6% and 10% next year.
The findings are the “base case” from Louis Christopher, the Founder and Managing Director of SQM Research, and are contained in his latest annual “Boom and Bust” report.
However, that weighted capital city average of 6-10% masks wide variations in expected growth, with Sydney and Canberra property prices tipped to see as little as a 3% uplift, while values in Perth and Darwin could soar by up to 16% and Brisbane by 15%.
Under Mr Christopher’s most optimistic scenario, Perth could see runaway growth of 17-21%, while Brisbane’s dwelling prices will charge ahead by 13-18%.
The details
For 25 years, Louis Christopher has been one of Australia’s leading commentators on property cycles, housing affordability and rental market trends.
Previously the Head of Research at Australian Property Monitors, Mr Christopher established his own firm - SQM - in 2006.
SQM’s property indices - such as asking rents, asking prices and stock on market - are frequently referenced by economists, journalists and housing analysts.
Each November, Louis Christopher publishes his annual “Boom and Bust” report - an in-depth look at the economic conditions that could affect housing prices in the coming calendar year.
“2025 has been a year of resilience for the Australian property market, driven by strong population inflows and initial monetary policy easing; plus, in recent months, the First Home Buyer Deposit Scheme," he says.
Looking forward to 2026, Mr Christopher says the outlook “is shaped by a range of potential economic paths.”
SQM believes this ranges from a “sluggish” Australian economy - the company’s most likely or “base case” - through to a “robust economic rebound”.
Nevertheless, in all scenarios, SQM believes Australian capital city housing prices will continue to grow.
“Our scenarios highlight the market's sensitivity to these factors, with Perth, Brisbane and Adelaide poised for double-digit growth in all cases due to their supply constraints and economic momentum," Louis Christopher says.
The “base case” would see Perth and Darwin lead the charge next year, with both cities recording price growth in the vicinity of 12-16%.
Brisbane and Adelaide would not be far behind, predicted to see gains of 10-15% and 10-14% respectively.
Next comes Melbourne and Hobart, both predicted to see between 4% and 7% dwelling price growth, with Sydney and Canberra recording the most sluggish performance at 3-6%.
Louis Christopher also expects substantial growth in Queensland’s "lifestyle” markets, tipping property price growth of 10-15% for the Sunshine Coast, 7-11% for the Gold Coast and 7-12% for the Mackay/Airlie Beach region.
Economic fundamentals
SQM’s “base case” scenario assumes a steady but sluggish economy for 2026; yet one that “carries the momentum of the housing prices growth recorded in the 2nd half of 2025 until at least mid-way through” next year.
Three interest rate cuts during 2025, plus the First Homeowner’s Deposit Scheme expansion, will continue to encourage buyers into the housing market.
After that, predicted interest rate cuts for the 2nd half of 2026 will ensure ongoing price growth.
SQM’s “base case” assumes Australia’s population growth will likely moderate from the spike after the pandemic to about 390,000 people or 1.4%.
This will translate into new demand for about 150,000 dwellings.
Meanwhile, dwelling completions should rise to about 180,000, creating a small surplus for 2026 of about 30,000 homes.
Employment growth will also slow, with unemployment rising to 5%.
It’s also expected that the RBA will keep interest rates steady until mid-2026.
After that, one or two further 0.25% rate cuts are probable, according to Louis Christopher.
If further RBA rate cuts do not materialise, SQM believes the property market would still record dwelling price rises in each capital city, but at a slower pace of growth.
Perth, Brisbane and Adelaide would still see double-digit growth of up to 14%, but price growth could be more muted in Sydney, Melbourne and Canberra.
Under the most optimistic “economic rebound” scenario, which would see lower inflation and unemployment and the RBA willing to cut interest rates up to three more times, Perth would record extraordinary price growth of 17-21%, with Brisbane, Darwin and Adelaide all tipped to see as much as 18%.
Sydney and Melbourne would also see strong growth of 7-11%.
Why listen to Louis?
Obviously, it’s notoriously difficult to predict economic conditions months ahead and then try to extrapolate the likely effect on property prices.
But one of Louis Christopher’s scenarios in last year’s “Boom and Bust” report was reasonably close to the mark.
Assessing how his 2025 forecasts performed, Mr Christopher is refreshingly honest, as well as being his own worst critic.
“Our base case scenario was for dwelling prices to rise between 1 to 4% in 2025.
“That base case assumed rates would not be cut until mid-2025,” he says.
In fact, the Reserve Bank of Australia started cutting the cash rate from a 12-year high in February 2025, an outcome which Louis Christopher says “then automatically threw our base case scenario straight into the bin and left one scenario to cover this, which was Scenario Three - prices to rise over 2025 by 6 to 10%.”
“Based on this, I overcooked Perth and Adelaide and undercooked Darwin and the Gold Coast…..though I think our forecast will come in for Perth and Adelaide 1st Quarter of 2026.”
His verdict?
“I'm giving myself 7 out of 10.
“Lost marks for not getting the base case right, but giving myself some half marks for Perth and Adelaide.
“You be the judge.”
The take-out
Whichever way you look at it, Louis Christopher’s outlook for residential property in 2026 is decidedly bullish, even if the Australian economy continues to sputter along.
He may have got the timing of RBA rate cuts wrong, but given his predictions were published in early November last year, his Scenario 3 was remarkably accurate.
All Mr Christopher’s forecasts also make it clear that there’s significant growth still to come in this property cycle in all capital cities, particularly in Perth, Adelaide, Darwin and Brisbane.
This again calls into question claims made by a number of leading property “experts” that the WA capital’s property market is “cooked”.
SQM’s annual “Boom and Bust” report may not get everything right, but it’s clear this year that there’s no bust on the horizon for Australian residential property.
No serious property investor can afford to ignore this report.