Why the 2026 Property Market Still Looks Strong Despite Rising Costs
By Leigh Martinuzzi | Martinuzzi Property Group – eXp Australia
As 2026 kicks off, Australia’s property market is starting the year in good shape. Confidence is strong, prices are still rising in many areas, and demand remains high, especially here in Queensland. But at the same time, we’re seeing growing pressure from rising living costs, stretched affordability, and talk of another possible interest rate rise.
Here on the Sunshine Coast, buyer interest remains solid and the lack of housing supply continues to support property values. That said, many buyers are becoming more cautious about how much they can borrow and spend.
Confidence Is Still High, Especially in Queensland
A recent national survey found that 87% of property professionals expect home prices to rise this year, with almost half tipping growth of more than 5%. That follows strong gains in 2025 when the average home rose by more than $70,000 in value across Australia.
Queensland is leading the way in confidence. Almost nine out of ten experts here expect prices to keep climbing, thanks to population growth, low rental vacancy rates, and a big shortage of homes. By contrast, confidence is lower in places like Melbourne and Sydney, where prices are already high and buyers are more sensitive to interest rate changes.
Affordability and Rates Still Matter
The latest inflation numbers show that costs are still rising, especially in housing and rent. That has increased the chances of the Reserve Bank lifting interest rates in February, which could affect buyer confidence.
Higher mortgage repayments mean many buyers are hitting their limits, especially first home buyers. Even a small rate hike could slow activity in some areas. But it’s also clear that demand is still outpacing supply in most markets, especially here in Queensland.
2026 as a Tale of Two Halves
Experts are tipping a two-speed year:
Early 2026: A strong start, with help from first home buyer schemes, steady rates (for now), and limited supply keeping prices moving.
Late 2026: Things may slow down as affordability pressures grow and borrowing limits don’t improve much.
This means location and property type matter more than ever. Homes in good suburbs with strong infrastructure, schools, and lifestyle appeal are likely to hold up better than those in outer or less established areas.
Brisbane Leads the Way & What That Means for Us
Brisbane is tipped to have one of the strongest property markets in Australia this year, with house prices forecast to jump nearly 11% and units by almost 8%. That’s well ahead of Sydney, where prices are only expected to grow by around 6%.
Why? Brisbane’s demand is booming, supply is tight, and big projects like the 2032 Olympics are boosting investor interest. While the Sunshine Coast is a different market, we often see buyer demand spill over from Brisbane, especially from those looking for lifestyle, affordability, or better long-term value.
First Home Buyer Schemes: Help or Hindrance?
Government incentives like the expanded 5% deposit scheme have helped more first home buyers get into the market, and that’s great to see. More than 75% of real estate agents have reported increased activity since the expansion of the First Home Guarantee, with competition intensifying around scheme price thresholds.
Federal Treasury data shows over 21,000 first home buyers have already accessed the expanded 5% deposit scheme since October. However, affordability remains a significant constraint, with less than half of Australian suburbs now sitting below the scheme’s price caps, a big drop from a year ago.
This means while the scheme offers a great pathway into the market, it’s not without challenges. Buyers need to move quickly and be realistic about what they can secure in competitive price brackets.
What’s Happening Locally on the Sunshine Coast
For buyers: Be clear on your budget and move quickly on quality properties. Focus on location and long-term value.
For sellers: The market still favours sellers, especially early in the year. Presentation and pricing are key to a great result.
For investors: Yields are rising, especially for well-located units and townhouses. The right properties are attracting strong rental demand and growth potential.
Final Thoughts
Australia’s property market is still in a strong position heading into 2026, backed by solid demand and long-term growth drivers. While rising costs and interest rate talk may create some uncertainty, there’s still plenty of opportunity, especially in high-demand areas like the Sunshine Coast.
If you’re thinking about your next move, I’m here to help with honest advice and local expertise.
At Martinuzzi Property Group, our focus is on helping clients stay informed, understand their options, and move forward with confidence, whether that means acting now or planning carefully for the future.
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