Sydney’s median house price could climb by more than $150,000 by the end of 2026 if Westpac’s latest property price forecast is realised.
Canstar.com.au’s analysis of Cotality house prices and Westpac’s forecast shows Sydney dwelling prices are expected to rise 5% this year and a further 8% in 2026. If that plays out, Sydney’s median could hit $1,675,827 by December 2026 – the biggest dollar gain of any capital city.
Nationwide, the housing market is rebounding as prices climb, auctions strengthen, and supply tightens. “Buyers are perking up,” said Westpac’s Matthew Hassan. The bank’s “time to buy” index jumped 10% in August after RBA’s third rate cut, with clearance rates near 70% in Sydney and Melbourne and national prices rising 0.6-0.8% a month.
Melbourne is also tipped for strong gains, with Westpac forecasting dwelling prices to rise 4% this year and 10% in 2026. That would lift the city’s median house price by more than $100,000 to $1,059,810 by the end of 2026.
“Sydney’s median house price could rise by up to $154,000 by the end of next year if house prices rise in line with Westpac’s dwelling price forecast,” said Canstar.com.au data insights director Sally Tindall (pictured).
“Melbourne is shaping up as the comeback city in 2026, with double-digit growth on the cards, according to Westpac. This could see Melbourne’s median house price go above the million-dollar mark, which for many first-home buyers will be a psychological barrier that makes it feel like the goal posts keep moving further away.”
In percentage terms, Westpac sees Perth leading this year with an 8% rise, while ANZ tips Brisbane to grow 7.4% by December 2025.
Looking to 2026, Melbourne is expected to post the strongest growth, with Westpac forecasting a 10% lift and ANZ a 6.6% gain.
Tindall cautioned that while rising prices boost equity for existing owners, they also push homeownership further out of reach.
“For those already in the market, that’s welcome news for their equity. For those still saving, the deposit hurdle is likely to get a whole lot steeper, not to mention the difficulty in clearing a bank’s serviceability test,” she said.
“Even with interest rates heading south, there’s little relief for house hunters if prices keep climbing at this pace. The extra borrowing power from lower rates risks being swallowed whole by rising price tags.”
Tindall stressed that forecasts can shift quickly: “These kinds of forecasts are just that – forecasts – and they can change course when the data shifts. The RBA has been clear that its decisions are driven by the numbers in front of it, while global economic pressures can also play a decisive role.”
She also warned against overextending: “The danger is, Australians will borrow to the limit, banking on prices continuing to climb. If circumstances change – whether that’s interest rates, job security or the economy – it could leave some households overexposed. The more households borrow, the more vulnerable they become to rate rises or shocks to employment.”
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