House Prices Are Still Rising, But the Easy Market Is Behind Us
Australian home values rose 2.1% in the first quarter of 2026, according to Cotality’s latest Home Value Index. On the surface, that sounds like good news. Prices are still going up. But if you look a bit closer, the picture is a lot more complicated, and for anyone trying to buy or borrow right now, the details matter more than the headline.
Growth has slowed. The previous quarter came in at 2.8%. And the markets doing most of the heavy lifting are not the ones where most Australians are trying to buy.
Not All Cities Are Moving in the Same Direction
Perth had a massive quarter, values up 7.3% in just three months. That kind of growth reflects extremely tight stock levels. Listings in Perth were sitting around 48% below their five-year average earlier this year, according to Cotality. When supply is that low, prices move fast.
But Sydney and Melbourne? Both cities have been quietly drifting lower since late 2025. Sydney is down about 0.4% and Melbourne around 0.9% since November. Cotality’s research director Tim Lawless noted that the softer trend in those cities coincides with falling auction clearance rates and more stock coming onto the market, giving buyers more choice and less urgency.
That divergence is only getting wider. Affordable markets like Perth and regional areas are still running hot. The expensive end of Sydney and Melbourne is cooling under the weight of high prices and tighter lending.
Rents Are Adding Pressure Too
Cotality’s national rental index rose 2.1% over the March quarter, the biggest quarterly jump since May 2024 and is now up 5.7% annually, adding around $37 per week to the median rental rate. The national vacancy rate is just 1.6%, well below the decade average of 2.5%.
For renters trying to save a deposit, this is a double hit. Rents are eating more of their income while property prices are still climbing in the markets they want to buy into.
What This Means If You’re Planning to Borrow
A few things are worth knowing right now.
Your borrowing capacity is probably lower than you think. With rates higher and lenders applying stricter buffers, it’s worth getting an updated figure before you start seriously looking. You might find your numbers have shifted since the last time you checked, and that affects the suburbs and price ranges that are actually realistic for you.
Pre-approval matters more in an uncertain market. Sellers and agents take pre-approved buyers more seriously. And if rates move again, having your approval locked in gives you a reference point for what you can confidently offer. You can check your borrowing power or get pre-approval started through the OM Financials website.
And if you already own property, it might be worth revisiting your loan structure. Rates have moved. Refinancing isn’t always the right move, but it’s always worth checking, especially if you haven’t reviewed your rate in the last 12 months.
How OM Financials can help you.
At OM Financials, we work with borrowers across Sydney and NSW to figure out exactly where they stand, what they can borrow, what structure works for their situation, and how to move forward without overextending. Book a free consultation or call us on 0478 876 967. You can also follow us on Instagram and LinkedIn.