Australian Property Market Update: What the Numbers Actually Mean for Developers and Investors in 2026

National dwelling values hit $922,838 in February 2026 — up 9.9% year-on-year according to Cotality. Combined capitals cracked $1.014 million. Big numbers. Good headlines. But the headline number hides two completely different markets running at completely different speeds.

If you're structuring a development deal or assessing an investment right now, the national average tells you almost nothing. The city-level data tells you everything.

Two markets, two stories

Perth posted 2.3% growth in February alone — the strongest monthly result of any capital city. Over five years, Perth values have climbed 90.3%. Brisbane rose 1.6% for the month, with five-year growth of 86.1% pushing the median house price to $1,175,981. Adelaide added 1.3%, with 79.9% growth over five years and a median house now sitting at $980,815.

Then there's the other half. Sydney dipped 0.1% over the quarter, with a median house price of $1,155,325. Melbourne dropped 0.4% over the same period, median $977,579, and has managed just 11.8% growth in five years. Five years. Melbourne barely kept pace with inflation.

KPMG forecasts tell a similar story going forward: Perth at +13%, Brisbane +11%, Adelaide +8.2%. Sydney comes in at +5.8% and Melbourne at +6.8%. The growth engine has moved north and west.

Supply is the story nobody wants to hear

Building approvals dropped 7.2% in January 2026. The national housing pipeline remains well short of projected needs. This isn't new — but it keeps getting worse.

For developers, this creates a genuine paradox. Demand for new stock keeps climbing. Approval pathways keep getting slower. Construction costs haven't meaningfully retreated. The projects that do get built face less competition on completion — but they cost more to deliver and take longer to get out of the ground.

In Perth, active listings sit 48% below the five-year average. There simply isn't enough stock. Developers who can get a project through approvals and into construction are building into a market with far less competition than normal. That's a strong position to be in — provided you can fund it.

What rising values mean for finance

When property values rise, the maths on loan-to-value ratios shifts in the borrower's favour. A site you bought eighteen months ago at $2 million might now be worth $2.3 million. That additional equity changes what you can borrow, how your deal stacks up, and what a lender is prepared to offer.

For private lending, this matters. Private lenders price deals primarily on security value and exit strategy. Stronger underlying values mean better LVR positions, which can translate to lower rates, higher advance amounts, or both. If you're sitting on a site that's appreciated since purchase, you may have more options than you think.

The flip side: rising land values also mean higher entry costs for new acquisitions. If you're buying a development site today in Brisbane or Perth, you're paying peak pricing. The feasibility needs to stack up at current values, not projected values. We see deals fall apart when developers bank on continued growth to make the numbers work. Smart operators underwrite to today's market. The upside takes care of itself.

Brisbane and Perth: where the deals are

Both cities share the same structural tailwinds — strong population growth, tight supply, and values still well below Sydney on an absolute basis. Brisbane at $1.17 million and Perth at significantly less both offer room for further appreciation that Sydney at $1.15 million simply doesn't.

We're seeing strong activity in townhouse and medium-density projects across both markets. The numbers work. End values support the build costs. Pre-sales are achievable. And lenders — both banks and private — are actively writing development finance and construction finance in these corridors.

If you've been looking at a site in SEQ or the Perth metro area, the data supports moving. But the window for buying at current land prices won't stay open if KPMG's forecasts land anywhere close to target.

Melbourne: the contrarian play

Melbourne is the market nobody wants to talk about. Five-year growth of 11.8% while every other capital posted 40% or more. Values down 0.4% over the quarter. On paper, it looks like the market to avoid.

But that's also what makes it interesting. Melbourne's median house at $977,579 is now cheaper than Brisbane. For a city of five million people with long-term population growth baked in, that's a genuine dislocation. KPMG has Melbourne at +6.8% for the year — modest, but meaningful if you're picking up a development site at a relative discount.

Melbourne deals need tighter feasibility work right now. Margins are thinner, pre-sale requirements are harder to hit, and bank appetite is cautious. But for developers who know the market and can find the right pockets, there's value. Particularly if you're not relying on bank timelines to get your finance in place.

Timing a development deal in this market

The data points in one direction. Prices are rising in the markets with the strongest fundamentals. Supply is falling behind. The projects that get delivered into this market over the next two to three years face favourable conditions on the other side.

The risk isn't the market — it's the execution. Can you get approvals in a reasonable timeframe? Can you lock in construction costs? Can you fund the deal without spending twelve weeks waiting for a bank that might say no? Those are the questions that determine whether a good opportunity actually becomes a completed project.

That's where we come in. We structure development finance and construction finance deals across all of these markets — through private lenders who assess the deal, not just the borrower's tax returns. Approvals in days, not months. Certainty when you need it most.

Talk to us

If you're looking at a development deal in Perth, Brisbane, Adelaide, Melbourne, or anywhere else in Australia — and you want straight advice on how to fund it — get in touch. No obligation, no spin. Start a conversation hereor call us direct. We'll tell you what's realistic and how to structure it.