Why Property Prices are Poised to Rise in the Coming Year

As we head towards 2026, there’s a definite shift in the air when it comes to the property market — and Sydney is right at the centre of it. Whether you’re thinking about buying, selling, or just keeping a close eye on the market, it’s worth understanding some of the key forces that are starting to align and could drive prices upward over the next 12 months.

Specifically, here are four reasons we’re likely to see continued growth in the year ahead:

1. Labor’s 5% Deposit Scheme Could Open the Floodgates

From January 1st, 2026, Labor’s new scheme will make it possible for thousands of Australians to enter the market with just a 5% deposit. That’s a big deal — especially for first-home buyers who’ve been sidelined by high entry costs. We’re expecting to see a spike in demand, particularly across Sydney’s more affordable suburbs, where competition is already fierce.

2. Interest Rates Finally Ease

After a tough couple of years with rising interest rates, we’re seeing a turning point. With inflation easing and the economy settling, many analysts are predicting that further rate cuts could be on the horizon. If that happens, it’s likely to give buyers a confidence boost — and in a city like Sydney, it doesn’t take much to spark renewed competition and price pressure.

3. Strong Immigration Is Fueling Demand

Despite talk of scaling things back, Australia’s immigration numbers are still high — and Sydney remains the top destination for new arrivals. This steady population growth continues to put pressure on both the rental market and affordable housing, adding another layer to the demand story.

4. It’s Still Expensive and Slow to Build

On the supply side, not much has changed. Construction costs are still high, and planning approvals — particularly across Greater Sydney — remain slow and complex. Between labour shortages and materials costs, getting new homes built isn’t getting any easier, which means supply continues to lag just as demand is ramping up.

So, what does it all mean?

In short, we’re heading into a period where demand is rising rapidly, but the supply of new homes simply can’t keep up — and that’s a classic setup for price growth, particularly in competitive markets like Sydney.

For buyers, this means doing your homework and being ready to move quickly when the right opportunity presents itself. For sellers, it could be an ideal window to take advantage of renewed confidence and competition. And for investors, understanding these underlying trends can help you position strategically for long-term gains.

Regardless of where you sit in the market, staying informed and having a clear plan will be more important than ever as 2026 approaches. The landscape is shifting — and those who are prepared will be best placed to make the most of it.

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