The value of residential homes in Australia—totaling 11.45 million dwellings—exceeded $12 trillion for the first time in the final quarter of the year, according to data from the Australian Bureau of Statistics.
During the three months through December, the housing market value increased by 3.2% to reach $12.3 trillion, driven by rising property prices compared with $11.9 trillion in the previous quarter.
However, these figures came before the Reserve Bank of Australia raised interest rates in February for the first time in more than two years, a move that could slow the market. Economists still expect additional price increases in the near term.
Major banks have lowered their property price forecasts for 2026 and 2027 due to higher interest rates, with a slowdown anticipated even in active markets such as Perth and Brisbane. Rising mortgage rates are expected to be the main factor behind this decline, although tax changes could also play a role.
Trent Saunders of the Commonwealth Bank of Australia said that housing price growth will moderate in 2026 due to higher borrowing costs resulting from interest rate hikes. Without the rate increases, along with slower population growth and tax changes, forecasts had pointed to growth of up to 7%, but expectations have now been reduced to 5% and 3%.
