Perth delivered 7.3% growth in a single quarter. Sydney slipped in the other direction. The March data from Cotality and PropTrack confirms what has been building for months: Australia no longer has one property market, and the second consecutive RBA rate hike on March 17 has sharpened the divide. For buyers, sellers, and investors, the city you are in now matters more than almost any other factor.
What Happened This Month
The defining event of March was the Reserve Bank of Australia raising the official cash rate by 0.25% to 4.10% on March 17, its second consecutive increase. The move followed February's hike from 3.35% to 3.85% and was decided by a split 5–4 board vote. In its statement, the RBA cited persistent inflationary pressures and the risk that rising global energy prices, driven by the Middle East conflict, would keep inflation above the 2–3% target for longer. Governor Michele Bullock was direct: "Inflation was already too high, reflecting the fact that demand is outstripping supply."
RBA cash rate decisions
Cash rate movements, February 2025 – March 2026
Two consecutive hikes in 2026 have reversed three cuts delivered across 2025.
Source: Reserve Bank of Australia, Monetary Policy Decisions 2025–2026. JRW Finance compilation.
Against that backdrop, Cotality's Home Value Index rose 0.7% in March nationally, taking Q1 2026 growth to 2.1%, a step down from the 2.8% increase recorded in Q4 2025. PropTrack's Home Price Index recorded a smaller monthly gain of 0.3%, placing the national median dwelling value at $908,000. The pace of national gains is clearly easing, but the headline figure conceals a story of deep divergence across cities and price brackets.
Capital city growth comparison
Q1 2026 dwelling value growth by capital city
Percentage change in combined dwelling values, January – March 2026
Source: Cotality Home Value Index, March 2026. JRW Finance compilation.
Sydney
Sydney's dwelling values edged down 0.1% in March, leaving the city 0.4% lower across Q1 2026. The combined median dwelling sits at $1,296,039, with the median house at $1,607,046 and units at $903,080. These medians have been broadly flat since late 2025.
Sydney's auction clearance rate, which measures the share of properties selling at auction, settled around 55% in the final week of March, well down from the 65% recorded a year earlier. A rate below 60% generally favours buyers. New listings have risen sharply, giving buyers more choice and reducing urgency at the negotiating table. The divergence by price bracket is stark: lower-quartile Sydney house values are still growing, while upper-quartile properties are facing outright declines, particularly across the inner suburbs, upper north shore, and northern beaches.
Melbourne
Melbourne continues to underperform most other capitals. Dwelling values fell 0.2% in March and 0.3% across Q1 2026, with the combined median at $826,132, the median house at $977,579 and units at $642,431. Melbourne has slipped 1.0% from its November 2025 peak.
Cotality research director Tim Lawless noted the softer trend coincides with "falling auction clearance rates and a pickup in supply," providing buyers with more choice. Victoria's elevated land tax settings, combined with affordability constraints and softer local economic sentiment, continue to weigh on investor participation. The suburbs seeing the strongest relative activity are more affordable outer-ring pockets, including Frankston, Brimbank, and Sunbury.
Brisbane
Brisbane is moving in a different direction entirely. Cotality's data shows dwelling values up 1.6% in March, with Q1 growth reaching 4.8%. The city's combined median dwelling value reached $1,101,151 at the end of March, representing 19.0% annual growth. The unit market is running even harder, with the median unit value reaching $865,548 in March and annual growth of 21.5%.
The Brisbane rental market remains under severe pressure. SQM Research recorded a vacancy rate of 0.9% for Greater Brisbane in early 2026, one of the tightest on the eastern seaboard, with combined rents rising 8.5% over the year to January. Population movement from the southern states and infrastructure spending ahead of the 2032 Olympic and Paralympic Games continue to underpin both prices and rental demand.
Perth
Perth is the national standout. Cotality's data shows values rose 2.5% in March alone, taking the quarterly gain to 7.3%. Cotality's Tim Lawless described the current pace as "unsustainable" while noting it is directly supported by severe supply constraints: advertised stock is tracking approximately 40% below the five-year average. Q1 growth added approximately $69,000 to the Perth median home value, a scale of quarterly appreciation without equal among Australian capital cities in the current cycle.
REIWA data for the week ending March 29 shows 3,355 properties listed for sale, 34.1% lower than the same period last year. Houses are selling in a median of nine days. The median dwelling rent rose to $720 per week in March, approximately 6% higher than a year ago, driven by ongoing population growth and chronic undersupply of both for-sale and rental stock.
Adelaide
Adelaide rounded out a strong quarter for the mid-sized capitals. Dwelling values rose 1.2% in March and 3.8% across Q1 2026, with annual growth sitting at approximately 13.8%. Cotality's March data shows Adelaide holds the tightest rental vacancy rate of any capital city at 0.9%, meaning fewer than one in every 100 rental properties is available. Limited new listings, steady population inflows, and demand from investors priced out of the east coast are combining to keep Adelaide well supported.
Smaller Markets: Hobart, Darwin, and Canberra
Hobart is in modest recovery. Values are approximately 7% higher over the past year but remain 3.5% below the city's March 2022 peak. SQM Research recorded a vacancy rate of just 0.4–0.5%, with house rents up 6.8% and unit rents up 7.6% annually.
Darwin is at a record high, with annual dwelling value growth of 19.4% according to Cotality's February 2026 data. The combined median sits at $602,284, with houses at $709,975. Darwin stands out among the capitals for rental yield at approximately 6.1% gross, the highest of any capital. Canberra is recovering more gradually, with annual growth of 6.2% and a combined median of $903,374, still 1.1% below the May 2022 peak.
Median dwelling values
Capital city median house price, unit price and annual change
Data to February – March 2026
| City | Median house | Median unit | Annual change |
|---|
Source: Cotality Home Value Index / Your Mortgage data compilation, February–March 2026. JRW Finance compilation.
Rental Market Snapshot
National Rental Conditions – March 2026
A vacancy rate measures the proportion of all rental properties that are empty and available. Anything below 2% generally signals strong upward pressure on rents. Adelaide and Brisbane are the tightest markets nationally at 0.9%, while Hobart sits at just 0.5%. The tightening is broad-based, with no capital city above 1.7%.
Rental vacancy rates
Vacancy rate by capital city
Below 2.0% signals upward pressure on rents. Decade average: 2.5%.
Source: SQM Research and Cotality rental analysis, February–March 2026. JRW Finance compilation.
Lending and Finance Trends
ABS Lending Indicators – December Quarter 2025
APRA's new 20% cap on high debt-to-income lending, effective February 1, is beginning to filter through to credit availability for heavily leveraged borrowers. For most owner-occupiers borrowing within serviceable limits the impact is modest, but investors stretching to multiple properties in expensive markets will feel the restriction more directly. The Federal Government's 5% Deposit Scheme continues to drive first home buyer activity, particularly in markets below $1 million.
What to Watch Next Month
There is no RBA board meeting in April. The next decision is in May, and the question the market will be asking is whether the board will hike for a third consecutive time. Interest rate futures markets are currently pricing in the possibility of as many as three additional hikes from the RBA by year's end, which would take the cash rate to 4.85%. If that scenario unfolds, it would be the highest official cash rate Australia has seen in nearly two decades.
The most important near-term indicator is the Middle East conflict and its effect on global energy prices. RBA minutes from March explicitly flagged oil prices as a key near-term driver of inflation. A sustained rise in fuel costs would reduce the prospect of any rate relief in 2026 and add to cost-of-living pressure on mortgage holders already absorbing two hikes.
On the domestic data calendar, February building approvals figures are due in April, following January's already-weak 7.2% fall. If approvals remain depressed, the structural housing shortfall supporting Perth, Brisbane, and Adelaide prices will deepen further. SQM Research's March vacancy figures will confirm whether the slight uptick to 1.6% nationally is a seasonal blip or the beginning of a genuine easing in rental conditions. And in Sydney and Melbourne, watch auction listing volumes and clearance rates: if stock continues to rise and clearance rates fall through 55%, downward price pressure in those markets will accelerate.
Key Takeaways
- The RBA raised the cash rate to 4.10% on March 17 in a split 5–4 decision, its second consecutive increase, driven by persistent domestic inflation and Middle East conflict risks to global energy prices.
- Perth delivered 7.3% dwelling value growth in Q1 2026 alone, adding approximately $69,000 to the median home value, with stock sitting 40% below the five-year average and houses selling in nine days.
- Sydney and Melbourne both recorded quarterly price declines in Q1 2026, down 0.4% and 0.3% respectively, as rising new listings and falling clearance rates shift negotiating power toward buyers.
- Brisbane's combined median dwelling reached $1,101,151 at the end of March, up 19% annually, with a rental vacancy rate of 0.9% among the tightest in the country.
- The national rental vacancy rate sits at 1.6%, well below the 2.5% decade average, with rents rising 5.7% annually and no material supply response visible in near-term building approvals data.
- APRA's 20% high-DTI lending cap, introduced February 1, is beginning to constrain credit for heavily leveraged borrowers, with the biggest impact expected in Sydney and Melbourne.
- The RBA's May meeting, upcoming building approvals data, and the Middle East conflict's ongoing effect on global energy prices are the three key variables to watch heading into May.
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References
- 1.Cotality Home Value Index – Cotality – April 2026 – discover.cotality.com/hubfs/Article-Reports/COTALITY HVI Mar 2026.pdf
- 2.Statement by the Monetary Policy Board: Monetary Policy Decision – Reserve Bank of Australia – 17 March 2026 – rba.gov.au/media-releases/2026/mr-26-08.html
- 3.PropTrack Home Price Index, March 2026 – REA Group / realestate.com.au – April 2026 – realestate.com.au/news/research
- 4.National Rental Vacancy Rates, February 2026 – SQM Research – March 2026 – sqmresearch.com.au
- 5.Lending Indicators, December Quarter 2025 – Australian Bureau of Statistics – 11 February 2026 – abs.gov.au/statistics/economy/finance/lending-indicators/latest-release
- 6.Total Value of Dwellings, December Quarter 2025 – Australian Bureau of Statistics – 10 March 2026 – abs.gov.au/statistics/economy/price-indexes-and-inflation/total-value-dwellings/latest-release
- 7.Perth Weekly Market Snapshot, Week Ending 29 March 2026 – REIWA – 1 April 2026 – reiwa.com.au/news/perth-weekly-market-snapshot-for-the-week-ending-29-march-2026
- 8.National Weekly Auction Report, March 28th 2026 – My Housing Market / Property Update – 30 March 2026 – propertyupdate.com.au/this-weekends-auction-results-what-happened-in-sydney-melbourne-brisbane-adelaide-canberra
