Queensland’s housing market has entered 2026 with momentum that continues to outpace the rest of the country, even as growth slows across Australia’s largest southern capitals.

New property data shows Brisbane housing values rose 1.6 per cent in December alone, while Sydney and Melbourne both recorded modest declines of 0.1 per cent. It marks the first month on month fall in Australia’s two largest markets since early last year, highlighting a clear divergence in market conditions.

While the slowdown in southern capitals may provide some relief for buyers, Queensland’s continued growth is compounding affordability pressures across both metropolitan and regional markets.

Brisbane continues to push higher

According to Cotality Research Director Tim Lawless, the Brisbane market is now firmly among the least affordable in the country.

“If you own a home, that’s great news,” Mr Lawless said. “But if you don’t, it’s probably becoming increasingly frustrating how fast values are rising and how much it costs to get your foot in the door. Brisbane is extraordinarily unaffordable now.”

The 1.6 per cent rise recorded in December equates to an average increase of almost $16,000 per dwelling across houses and units. On an annual basis, Brisbane values are now up 14.5 per cent, adding approximately $131,000 to the average property.

Once positioned as a more accessible capital city market, Brisbane has rapidly shifted into the top tier for price growth and affordability pressure.

Supply constraints underpin price growth

A key factor driving Queensland’s continued outperformance is a persistent shortage of housing supply.

“We’re not seeing much building happening across the housing market overall,” Mr Lawless said. “That ongoing undersupply is a big part of what’s supporting prices.”

Low listing volumes, subdued new construction activity, and strong population growth, particularly interstate migration into south east Queensland, continue to place upward pressure on values.

Sydney and Melbourne, by contrast, are now acting as a drag on national growth, with affordability ceilings and softer buyer sentiment tempering demand.

Units gain momentum as buyers adjust

The strongest growth within Brisbane is now occurring in the unit sector, reflecting a shift in buyer behaviour as detached housing becomes increasingly out of reach.

“We’re seeing more buyers looking at apartments simply because houses are becoming harder to afford,” Mr Lawless said.

Investors are also playing a role, with apartment markets across south east Queensland attracting increased interest due to lower entry points and strong rental demand.

Several Brisbane suburbs recorded standout annual growth, led by Springwood Kingston at 19.5 per cent. Other strong performers included Sunnybank, Nathan, Rocklea Acacia Ridge, Forest Lake Oxley, Inner Ipswich, Chermside, Capalaba, Mt Gravatt and Strathpine, all recording growth above 16 per cent.

Regional Queensland outpaces capital cities

Outside Brisbane, regional Queensland has emerged as one of the strongest growth stories nationally.

Homes across the Granite Belt now average $592,873, representing a 20.4 per cent increase over the past 12 months. Toowoomba, the eastern Darling Downs and surrounding regions have also recorded annual growth between 18 and 20 per cent.

Additional high performing regions include Charters Towers, south of Cairns, the Central Highlands including Emerald, Maryborough, parts of the Gold Coast such as Ormeau Oxenford and Nerang, and northern areas of the Bowen Basin.

Mr Lawless attributed the strength of these markets to relative affordability, economic diversity and access to essential services such as schools and healthcare.

Growth expected to slow, not reverse

Despite the strong results, expectations are building that Queensland’s pace of growth will moderate through 2026.

“I think there will be a slowing,” Mr Lawless said. “But I don’t think we’ll see values going backwards simply because of the low supply in the market and population growth, particularly interstate migration into south east Queensland.”

Speculation around future interest rate movements may dampen momentum, but underlying fundamentals continue to support demand.

“It’s clearly an unsustainable brand of growth we’re seeing across many Queensland markets,” Mr Lawless said. “We are starting to see the first signs of that momentum leaving the marketplace, even though growth remains high.”

Rental pressures set to intensify

Rising property values are flowing directly into Queensland’s rental market, which remains among the tightest in the country.

Over the past 12 months, Brisbane rents rose 6.2 per cent, outpacing the national average of 5.2 per cent. Vacancy rates remain well below what is considered a healthy level.

“We’ve got a vacancy rate across Brisbane of 2.1 per cent,” Mr Lawless said. “In the apartment market it’s even lower at 1.4 per cent. House vacancy rates are 2.4 per cent, while a balanced market is closer to 3.5 per cent.”

Sustained rental growth over recent years has already led to more group households and multi generational living arrangements as tenants adapt to rising costs.

The builder takeaway

Queensland’s housing market continues to defy national trends, supported by population growth, constrained supply and sustained demand across both metropolitan and regional markets.

For builders, developers and suppliers, the message is clear. Demand remains strong, but affordability pressures are intensifying. Future growth will increasingly depend on the industry’s ability to deliver diverse housing typologies, accelerate supply, and respond to shifting buyer and renter expectations.

Author: The Good Builder

The Good Builder is a media platform that provides news and insights for Australia’s home building industry. From exclusive stories and curated insights to bold industry perspectives, we deliver the news and updates that keep builders, suppliers, and the entire home building industry inspired and ahead of the curve.