Brisbane’s scorching property market shows no signs of abating, with house prices projected to rise by almost 11 per cent this year, a new report has revealed.
KPMG’s residential property outlook forecast tipped Queensland’s capital as the second strongest performer for 2026, behind Perth.
House prices are forecast to rise 10.9 per cent this year and 8.9 per cent in 2027.
Unit prices are also projected to increase by 7.8 per cent this year and 4.9 per cent the next.
KPMG chief economist Dr Brendan Rynne said strong growth in the first half of 2025 should have moderated due to affordability constraints.
“But instead, the second half of last year accelerated growth further, especially in already overheated cities Perth and Brisbane, supported by the expanded 5 per cent deposit scheme,” Dr Rynne said.
“Despite the fact there aren’t enough houses being built, buyers in these cities are prepared to pay more than the supply shortage would justify.
“As a result, at the entry level, the market will continue outperforming this year, with more young people seizing the opportunity to break the rent cycle and lock in their first home sooner, intensifying competition at the affordable end and ensuring prices remain firm.”
According to the latest Cotality figures, Brisbane’s median home value was $1,036,323 in December, increasing 1.6 per cent in the month alone, and more than 14 per cent for the year.
Dr Rynne said south-east Queensland’s population growth was exacerbating supply constraints.
“More and more people are making the move to Brisbane, but as with most other cities, housing supply has not kept pace, amplifying cost pressures.
“As a result, Brisbane’s growth is expected to continue for the foreseeable future”.
Treasurer defends scheme for first-time buyers
The report noted that part of the market’s growth was driven by the federal government’s 5 per cent deposit scheme.
It enables first home buyers to purchase a property with just a 5 per cent deposit and not pay costly Lenders Mortgage Insurance (LMI), with the Commonwealth acting as a guarantor.
Questioned on whether it’s fuelling dwelling price increases, Treasurer Jim Chalmers defended the initiative.
“It’s a really important program which is about making it easier for first-time buyers to get a toehold in the market,”
he said.
“It operates alongside a number of very substantial efforts that we’re making to build more homes as well, so that there are more affordable options in the market.”
The Commonwealth’s National Housing Accord sets a target of 1.2 million new well-located homes by mid-2029.
“We’re working very closely with the states and local governments on planning and zoning, we’re trying to make the sector more productive,” Mr Chalmers said.
“We haven’t made sufficient progress as a country over the last decade or so when it comes to building new homes and we’re doing our best, to turn that around.”
Government ‘hell-bent’ on increasing supply
Premier David Crisafulli said the government was squarely focused on increasing supply.
“There’s no doubt there’s real confidence at the moment in the Queensland property market,” he said.
“But the problems we’re seeing is because of a lack of supply that hasn’t been delivered for a long time.
“And whilst it won’t change overnight, we are hell-bent on making sure that there are more options for people to get into a home, and whether that’s buying their first home, being able to afford their rent, or putting a roof over the head of the disadvantaged.”
The report noted the main downside risk to its outlook was the growing affordability constraints facing first-home buyers.
Nationally, the KPMG report projected house values to increase by 7.7 per cent, despite ongoing speculation on the central bank’s movements.
The Queensland government has committed to building one million new homes, including 53,000 social and affordable homes, by 2044.
Deputy Opposition Leader Cameron Dick said Queensland was in the “grip of an unaffordability crisis”.
“When house prices in Brisbane are going to increase at twice the rate of Sydney’s, that’s a wake up call,”
he said.
“This is a massive wake up call that the housing policies of the LNP are simply not working.”
Mr Dick said he felt for essential workers who were unable to afford to live near where they worked.
“They cannot live near the places where they work and that is a bad thing for Brisbane,” he said.
Source: Brisbane house prices set to increase by almost 20 per cent over next two years, Alex Brewster for ABC News.