Prices in Australia’s housing market have continued to grow faster than expectations, but higher interest rates are expected to slow price growth over the next two years, according to Commonwealth Bank Senior Economist Trent Saunders.
National dwelling prices rose close to 10 per cent over the past year and are now around 55 per cent higher than pre-COVID levels. Prices for detached houses have risen even more sharply.
However, the headline figures disguise significant variation across cities, regions and market segments”, giving a two speed market effect. Performance across the country has been uneven, with Perth, Brisbane and Adelaide continuing to record strong price growth, while Sydney and Melbourne have lagged. Supply versus demand imbalances have been the key driver. Perth & Brisbane have had population growth has been much stronger relative to dwelling supply, where housing supply in New South Wales and Victoria has exceeded population growth, easing pressure on prices.
Affordability is reshaping demand. Affordability constraints have increasingly influenced buyer behaviour, particularly in Sydney, where demand has been strongest at the lower end of the market.
Supply is the central challenge. Australia’s affordability constraints ultimately reflect a persistent shortfall in housing supply, Saunders said. We’re not building enough housing at the same time that population growth has been strong.
Slower growth maybe ahead. Interest rates are the biggest driver, as rates buyer increase demand decreases.
Source : Commbank Newsroom April 2026 www.commbank.com.au