KPMG Residential Property Market Outlook

Housing market momentum accelerated sharply in the second half of 2025, substantially exceeding what would have been implied by first‑half trends. For example, 2025H2 accounted for 62% of Brisbane’s full‑year growth, 63% in Perth, 76% in Hobart, and 70% in Canberra.

Rental growth has moderated from its 2023 peak, offering some relief for households. However, rent inflation remains above its long‑term average, reflecting the persistent imbalance between population growth and new dwelling supply. Elevated rents continue to support the relative appeal of home ownership, particularly for investors and first home buyers weighing renting versus buying.

Housing approvals and construction activity have shown signs of recovery, particularly in higher‑density projects. Even so, completions remain well below the level required to address Australia’s accumulated housing shortfall. KPMG forecasts that new dwelling supply over the next two years will be around 30% below the national target set under the National Housing Accord.

Price growth is increasingly concentrated in more affordable segments, where demand is strongest and policy support is most effective. Higher priced segments continue to face binding borrowing capacity and affordability constraints. This dynamic points to more balanced, rather than extraordinary, national growth outcomes over the next two years .