Have we reached the peak in property prices?

Have property prices already peaked, and is now the right time to buy? This is a question that many aspiring homeowners are weighing up.

While it’s difficult to predict exactly where the market will peak or trough, many investors focus on longer-term trends rather than short-term movements. With the Federal Budget reshaping the investment landscape as interest rates push higher, the answer is layered.

Cost-of-living relief was a key theme of the 2026–27 Federal Budget, with the Government scaling back negative gearing and Capital Gains Tax (CGT) concessions for investors in existing properties. The Treasury says this could help tens of thousands of Australians buy their first home over the next decade, by making more established homes available to owner-occupiers rather than investors.

With that in mind, here are a few broader insights to help you understand the current market environment.

Price growth is slowing

According to Cotality data, every capital city in Australia recorded slower growth in April, suggesting a moderation in housing market conditions.

The national home value index rose 0.3% over the month, marking the slowest rate of growth since January 2025. A range of factors is influencing this trend, including affordability and borrowing capacity constraints, as well as broader economic conditions such as interest rates, inflation, and consumer sentiment.

The property market is fragmented

While growth slowed across all capital cities in April, market conditions are still playing out quite differently by location.

Sydney and Melbourne both saw values ease by 0.6% over the month. Sydney’s prices are now sitting around 1% below their November peak, while Melbourne has seen a slightly larger pullback, with values below recent highs.

At the same time, other markets continue to advance. Perth recorded a 2.1% increase in April, while Brisbane, Adelaide and Darwin also saw values rise, albeit at a more measured pace than earlier in the year.

Overall, the data highlight how varied the property landscape remains, with different cities responding differently to the current environment.

There’s been a slowdown in buyer demand

Consumer confidence has fallen sharply in recent weeks. The ANZ-Roy Morgan Australian Consumer Confidence Index fell to one of its lowest levels on record, dating back to 1973. This suggests many households may be feeling more cautious in the current environment.

This shift is also being reflected in market activity. Property sales across the capital cities are reportedly lower than at this time last year and below the five-year average, indicating a moderation in buyer demand.

At the same time, listing levels are starting to lift in some markets. In Sydney and Melbourne, advertised stock is now above average, giving buyers slightly more choice than they’ve had in recent months.

Conditions look a little different across the mid-sized capitals, where available stock remains relatively tight. While listings are beginning to rise, they are still below typical levels for this time of year.

Auction activity has also been on the slow side, with clearance rates trending lower since earlier in the year. This may reflect a more measured approach from buyers as they navigate changing interest rates and broader market conditions.

Lower segments are experiencing more growth

Across the capital cities, lower-priced properties have generally been recording stronger growth than the upper end of the market. This may reflect a combination of factors, including borrowing capacity constraints and support available to first-home buyers.

Government support schemes for eligible buyers may also be contributing to activity in this segment by helping more buyers enter the market.

The difference is particularly noticeable in Sydney. Lower-tier house values are up 2.9% over the past year, while values at the upper end of the market have declined by 3.3%, highlighting the varied conditions across price points.

Regional markets are proving more resilient

Regional markets have shown greater resilience than the broader slowdown in capital cities. This may reflect a mix of factors, including relative affordability and continued movement of people towards regional areas.

Over the first four months of 2026, the combined regional index rose 4.2%, compared to 1.8% across the capital cities, highlighting the different pace of growth between these markets.

The broader outlook

Most forecasters still point to continued, if modest, growth through 2026. Earlier this year, KPMG forecast that house values could rise by around 7.7% and units by 7.1%, with supply constraints and rental demand expected to support growth.

More recently, some forecasts have been revised lower, reflecting ongoing uncertainty in the global and domestic environment, including inflation and geopolitical factors. Current estimates for capital city growth are closer to 2–3% this year.

What seems clear is that the stronger conditions of 2025 are behind us for now. Higher rates, reduced investor activity in established properties, and cautious consumers all point toward a more measured market.

So, is now a good time to buy?

Whether or not now is the right time to buy largely depends on your unique situation and goals. While increasing interest rates and affordability constraints create challenges, there are also opportunities for prepared buyers in the right locations.

If you do decide to jump in, we can run you through your finance options. As your mortgage broker, we’ll compare the market for you and line you up with a competitive home loan that meets your needs. Get in touch today.