- Australia’s housing market has split into two speeds: Perth is surging (+2.3% in February), with Brisbane, Adelaide and Hobart also posting solid gains, while Sydney and Melbourne have flatlined as higher rates and weaker sentiment bite.
- Ultra‑low listings are driving growth in the mid‑sized capitals, especially Perth, where stock is nearly 50% below its five‑year average—supporting price rises even as demand softens in the larger cities.
Two months into 2026, and we have seen a clear divergence in housing trends, with Sydney and Melbourne values flatlining while the mid-sized capitals continue to record a solid rate of gain at more than 1% month on month growth.
Perth is showing the strongest trend, with home values jumping 2.3% in February, adding more than $22,500 to the median dwelling value over the month. Brisbane, Adelaide and Hobart have also recorded a rise of more than 1% in February.
Sydney and Melbourne have been less resilient to the February rate hike and the drop in sentiment, with home values flat over the month and down -0.1% and -0.4% over the rolling quarter.
Home Value Index
Index results as at 28th February 2026
Tim Lawless, Cotality’s research director, said that while Sydney and Melbourne have traditionally led Australia’s housing cycles, there have also been periods where the market has moved in a counter cyclical way.
“The clear slowdown in housing conditions across Sydney and Melbourne could signal an easing in growth conditions elsewhere down the track, but for now, the mid-sized capitals continue to see support from extremely low inventory levels, which is boosting the growth in values.”
In the four weeks to February 22, Perth listings remained 48% below their five year average, with Brisbane 31% below and Adelaide 23% lower.
Advertised stock levels are also low in Sydney and Melbourne, but ‘only’ 1.0% and 4.3% down on five-year average levels respectively.
Additionally, Sydney and Melbourne have seen a clear pickup in the flow of new listings through February, with freshly advertised stock 9.7% above the five-year average in Sydney and almost 12% higher than average in Melbourne.
“Vendors are looking more motivated in Sydney and Melbourne, possibly looking to beat a further softening in selling conditions as clearance rates ease and demand slows,” Mr Lawless said. “If the typical seasonal pattern holds, the flow of new listings is likely to strengthen leading into Easter.”
Delving a bit deeper into the trends shows the more affordable end of the market is still delivering some strength. In Sydney, for example, lower quartile house values were up 0.8% over the month, while upper quartile house values dropped 0.9%. The same trend, to different extents, is evident across each of the capital cities.
“There is a lot of competition for lower-priced properties,” Mr Lawless said. “First home buyers, investors and subsequent buyers are all competing across this sector of the market, while credit is less available across the higher price points due to serviceability constraints.”
Regional markets are showing a similar trend, outperforming the capitals across New South Wales, Victoria, South Australia and Tasmania, with demand more resilient thanks to lower price points and evidence of rising internal migration rates.
