KPMG Forecasts 2026 Property Market Boom
KPMG has released an analysis predicting a significant property market upswing in 2026. The firm cites structural demand, ongoing supply constraints, and an expected softening of interest rates as the key drivers for growth in both residential and commercial real estate sectors.
- KPMG's Chief Economist, Brendan Rynne, notes that the market is "massively undersupplied" due to long-term structural shortfalls, not a typical cycle. New dwelling supply is forecast to be approximately 30% below the national target over the next two years. - The national forecast anticipates a 7.7% rise in house prices and a 7.1% increase for units. However, growth is expected to be uneven, with Perth (12.8%), Brisbane (10.9%), and Darwin (10.5%) predicted to see the most significant gains. - In the commercial sector, a major trend is the bifurcation of the office market; high-quality, well-amenitized buildings are leasing at high rates, while lower-grade office spaces are struggling to retain tenants. - Various financial institutions predict average mortgage rates will settle in a range of 5.9% to 6.4% in 2026, a key factor influencing borrowing capacity and market activity. - Demand at the affordable end of the residential market has been amplified by the expansion of the federal 5% deposit scheme, which has pulled more first-home buyers into the market. - The rental market is expected to remain tight, with KPMG forecasting rent increases of about 3.5% per year through 2026 and 2027 as population growth continues to outpace new housing completions. - Looking ahead to 2027, KPMG anticipates a moderation in growth to a more sustainable pace, forecasting a 6.0% increase for house prices and 4.6% for units.
