Every January brings a flood of price forecasts. Confidence is high, headlines are bold, and sentiment — as always — does genuinely move markets. But here’s the truth: nobody really knows. 2026 is as unpredictable as any year that’s come before it.
What we can do is map out the scenarios that matter most. This week, SQM Research released their annual Boom and Bust report — a must-read every year — and it’s prompted me to share my own thinking on what this year could look like.
“The real question for 2026 isn’t how strong demand will be. It’s what happens with supply.”
New Listings Will Remain Scarce
I know it’s not what agents or brokers want to hear — but I firmly believe 2026 will be another dire year for new listings. This isn’t a recent trend. It’s been building for 10 to 15 years.
Three seller groups will once again hold back, and here’s why:
Demand Is Stronger Than It Looks
While supply contracts, demand is being actively stoked — and not always wisely.
The expanded 5% Deposit Scheme for First Home Buyers has already exceeded Treasury’s projected 1–2% price impact within a single month of launch. It is pulling forward years of future demand into a market that is already undersupplied. The affordability implications are serious.
Layer on some of the strongest investor lending figures we’ve seen in years, and a growing wave of opportunistic upgraders, and the demand picture is clear: it is robust and structural, not cyclical.
Loan serviceability limits are a real brake on growth — but buyers are simply shifting suburbs rather than waiting. The fear of missing out on opportunity cost is powerful, and it’s moving capital today.
Two Paths for 2026
FOMO Returns
If RBA rate-cut expectations strengthen again — as they did in the second half of 2025 — we could see a renewed FOMO cycle. Upgrader confidence rebounds, listings stay thin, and price growth accelerates across multiple markets.
Higher for Longer
If 2027 rate expectations drift higher, the market doesn’t collapse — it grinds. Structural forces remain: not enough homes to buy or rent, record migration, pent-up household formation, and years of undersupply baked in. Prices tick along, not boom.
