House prices set to soar by up to $112,000

Property prices look set to surge in 2026, and if you’re even thinking of buying a home or investment property it can pay to fast-track your plans.

Aussie property prices are defying gravity right now, and it’s a trend that looks set to continue.

Domain’s latest Price Forecast Report reveals that by this time next year, home prices are likely to have climbed by tens of thousands of dollars[1].

In Sydney, Domain is predicting house prices could skyrocket an extra $112,000.

While Domain didn’t provide figures for Hobart or Darwin, it expects all other mainland capitals to see values rise by at least 3%.

In dollar terms that means buyers may have to add tens of thousands of dollars to their buying budget as shown in the table below.

FOMO is driving market activity

With such significant price rises on the cards, plenty of buyers are getting in now to avoid paying a higher price further down the track.

Angus Raine, Executive Chairman, Raine & Horne said, “It may mean that FOMO (fear of missing out) is behind some buyer’s decisions.

“Whatever the case, there are plenty of buyers out and about this winter.” In May, Raine & Horne data revealed a 4% increase in buyer attendance at open homes compared to the same period in late autumn and early winter last year.

In June, NAB also reported a 16% jump in lending to first home buyers since February[3].  

Home owners aren’t  the only ones getting into the market sooner rather than later.

Westpac says investors made up more than one-third of new loans nationally during the past year[4].

What’s driving the market?

Positive market sentiment is a reflection of the two rate cuts seen in February and May, with expectations of more to come.

Both the Commonwealth Bank[5] and Westpac[6] are expecting further rate cuts this year, and possibly more in 2026.

This has seen the Westpac–Melbourne Institute Index of House Price Expectations jump to its highest level since 2013, with three quarters of Australians believing home prices will head north over the next 12 months[7].

Why now is the time to sell

If you’re thinking of selling, it may seem to make sense to hold off until next year.

But this overlooks a key issue.

As home prices rise, buyers may struggle with housing affordability.

Right now, Angus says we are seeing a sweet spot in the market.

“Rates are falling, property prices are strong yet still within buyers’ reach, and the overall economy remains healthy, with unemployment close to record lows at 4.1%[8],” Angus said.

“We know that today’s market offers the potential for strong prices.

Angus added, “The bottom line is that whether you are a buyer or thinking of selling, the time to act is now.”

Talk to your local Raine & Horne property expert for a clear picture of home prices in your patch.

[1] https://s3.ap-southeast-2.amazonaws.com/ffx.adcentre.com.au/domain/2025/CRTV-4399/Domain+Insight-Forecast+Report+2025.pdf?isForm=true

[2] https://s3.ap-southeast-2.amazonaws.com/ffx.adcentre.com.au/domain/2025/CRTV-4399/Domain+Insight-Forecast+Report+2025.pdf?isForm=true

[3] https://news.nab.com.au/news/nab-home-lending-jumps-as-first-home-buyers-return/

[4] https://www.westpac.com.au/about-westpac/media/media-releases/2025/18-june/

[5] https://www.commbank.com.au/content/dam/commbank-assets/private-banking/2025-05/may-2025-market-outlook.pdf

[6] https://www.westpac.com.au/news/making-news/2025/05/westpac-economics-revises-rba-rate-cut-timeline--next-cut-still-/

[7] https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0009/5310369/PressReleaseCSI20250610.pdf

[8] https://www.abs.gov.au/media-centre/media-releases/unemployment-rate-steady-41-may