The latest Property Frontline Market Watch takes a close look at property market performance to 31 July 2026, with the latest data now providing a clearer picture of how markets have responded since the Federal Budget changes announced on 12 May.
In this episode, Debra Beck-Mewing and Scott Hochgesang review the latest results from Cotality, PropTrack and SQM Research, along with the key economic, lending and legislative factors likely to influence property markets over the coming months.
Also, this month’s IN FOCUS segment covers Australia’s regional markets. With regional areas continuing to attract buyers looking for affordability, growth and investment opportunities, Debra and Scott examine which regions are performing, the fundamentals that matter when selecting a regional market, and why recent price growth alone is not enough to identify the best locations.
Market Performance
July delivered a noticeable shift in property market performance, with house prices slowing or falling across most capital cities. Sydney and Melbourne recorded the largest declines, while Brisbane also moved into negative territory for the first time in recent months. Perth remained relatively resilient, while Darwin continued to record the strongest price growth.
Importantly, the July results now largely reflect transactions negotiated after the Federal Budget announcements on 12 May, giving us a clearer picture of how buyers have responded to the changes. While the headline numbers show a broad slowdown, the current decline remains relatively modest when viewed against previous market corrections and the strong growth recorded over recent years.
The market also continues to perform differently across price points. Lower-priced properties in Brisbane, Adelaide and Perth are holding up more strongly, with competition remaining particularly strong in the affordable segments. Activity in this part of the market was also temporarily boosted by SMSF buyers racing to complete residential purchases before the new borrowing restrictions took effect on 10 August.
Supply will be one of the most important indicators to watch from here. Total listings are beginning to move closer to the five-year average as properties take longer to sell and new stock comes onto the market. With spring traditionally bringing more properties to market, increasing supply could create further opportunities for buyers if demand remains subdued.
Auction clearance rates also need to be viewed in context. While clearance rates have recently improved in Sydney and Melbourne, auction volumes remain relatively low, making the headline clearance rate less useful as a standalone indicator of market strength.
Rental markets remain tight, with annual house rents continuing to rise strongly across the capitals. However, monthly results were more mixed, with some markets recording falls and combined capital city rents remaining flat for the month. The next few months should provide a clearer indication of whether this is simply a seasonal Winter slowdown or the beginning of a broader change.
News + Market Influences
As always, during the podcast Deb and Scott reviewed the major announcements and events from the past month that are likely to influence the property market in the months ahead. The key impacts are summarised below.
The Reserve Bank held the cash rate at 4.35% at its August meeting, with the next decision due on 29 September. Inflation remains the key factor to watch, with uncertainty continuing around whether interest rates have reached their peak.
The Federal Budget changes continue to influence buyer behaviour, with further adjustments to the legislation creating uncertainty around the new rules. This includes the definition of a ‘new’ property for negative gearing and capital gains tax purposes, which now includes properties purchased within two years of an occupation certificate being issued. Questions also remain around how the changes will apply following events such as divorce or death where refinancing may be required.
The new restrictions on SMSF borrowing for residential property will have a longer-term impact on housing supply. The Housing Industry Association expects a significant proportion of affected building contracts may not proceed, effectively reducing the supply of rental properties at a time when rental availability is already constrained.
Other indicators remain mixed. There was a change of leadership in Victoria with Ben Carroll taking over from Jacinta Allen, however we’re unlikely to see any real changes to property legislation or the State’s performance until after the election in November.
Lending activity trends are reflecting a downturn in loan applications, however performance is varied across the full range of lenders. Bank valuations are also becoming more conservative as markets soften, which could increasingly affect purchases and refinancing.
Global pressures remain in the background, particularly the Middle East conflict and its potential impact on oil prices and inflation. While recent US inflation figures have been encouraging, the outlook for Australian inflation and interest rates remains uncertain.
IN FOCUS : Region Watch
This month’s IN FOCUS segment covered Australia’s regional property markets, looking at how the regions have performed, what’s driving growth and how to identify regional locations with the fundamentals to support longer-term performance.
Regional markets have delivered impressive results over recent years. Regional NSW, for example, has increased around 28% over the past five years compared with approximately 9% for Sydney, while regional Western Australia has almost doubled over the same period. Population movement away from more expensive capital cities has also supported areas including the Sunshine Coast, Greater Geelong, Fraser Coast and Lake Macquarie.
However, Deb and Scott cautioned against selecting regional locations simply because they appear at the top of recent growth tables. Smaller markets can experience significant movements from a relatively small number of sales, while growth from a low price base can produce impressive percentage increases that don’t necessarily indicate a strong long-term market.
What makes a strong regional market?
Rather than relying on recent price growth, Deb and Scott look for a combination of fundamentals including strong population growth, a diverse employment base, government investment in infrastructure and proximity to expanding cities.
The type of population growth also matters, with favourable locations ideally driven by families and working-age residents generally providing broader support for the local economy. Similarly, regions reliant on one major industry or employer can carry greater risk than locations supported by multiple industries and employment providers.
Infrastructure investment in hospitals, schools, roads and transport can provide another indicator of future growth, while the expansion of major businesses into an area can also provide useful evidence that the local population and economy are reaching a new stage of economic development.
Regional markets we’re watching
Deb and Scott’s preferred regional markets remain relatively consistent from the list they shared in 2025. The Sunshine Coast and Gold Coast continue to be viewed as strong long-term markets, although affordability is increasingly limiting the options available to buyers. Tweed Heads is also attracting attention as an alternative way to access the broader Gold Coast growth corridor.
In NSW, Newcastle, Maitland and the Central Coast remain areas of interest, along with Port Stephens and locations north of Newcastle. In Queensland, Rockhampton and Bundaberg are among the regional markets being monitored, while Geelong and Ballarat remain the Victorian regional centres of most interest.
Ultimately, regional markets can provide excellent opportunities, but the strongest recent price growth doesn’t necessarily identify the best places to buy. As with any property purchase, the underlying fundamentals need to support each buyer’s strategy and the reasons for holding the property over the longer term.
Author: Debra Beck-Mewing
Debra Beck-Mewing is the Editor of Property Portfolio Magazine and CEO of The Property Frontline. With over 20 years of experience buying property across Australia, Debra is a skilled property strategist and buyers agent known for uncovering tailored opportunities — from family homes to multi-use investments.
She has deep expertise in advanced strategies including renovations, granny flats, sub-division, and development. A Qualified Property Investment Advisor (QPIA®), licensed real estate agent, and holder of a Bachelor of Commerce and Master of Business, Debra combines strategic insight with hands-on experience.
Debra is the creator of the Property Smart Track System™ – a professional property buying system that enables buyers to select, assess and buy property independently in today’s market. She also leads Buy Like A Genius™, a premium end-to-end buyers’ agency service for busy professionals seeking expert property acquisition without the stress.
As a passionate advocate for greater transparency in the property and wealth industries, Debra is a sought-after speaker, author, podcast host, and participates on numerous committees including the Property Owners’ Association.
