What the data showed… and what changed immediately after
This month’s Market Watch takes a slightly different approach. Normally, we review the latest month’s price data, cover off news that will impact prices for the coming months, and then we have an In Focus segment where we look closely at a particular aspect of the market.
However, just as the February data was locked in, a chain of events occurred which delivered a ‘few’ flow on impacts.
So for this month’s episode, we reviewed market performance to 28 February 2026, then discussed the major economic and global shifts that occurred immediately after 28 February. These changes are already influencing sentiment, forecasts, and buyer behaviour.
Property Market Performance
As always, our insights are based on a combination of the most reliable data sources, together with what we’re seeing directly as we manage our clients’ property purchases across Australia.
Reviewing the February results, what we saw across the country was a fairly mixed picture, but with a very clear theme emerging. The economic team at Ray White are calling it the K move . . as the Australian property market splits into the downturn group and the upturn group.
On the downturn side, Sydney and Melbourne were soft, and Canberra was patchy. These areas aren’t dramatically falling, but certainly not showing any real strength at a broad level. Depending on which data set you look at, they were either slightly down or just holding flat. That’s consistent with what we’re seeing on the ground / in real life. There’s still large active pockets, but at a headline level, momentum has eased in these areas.
Good results were reported for Brisbane and Adelaide, though for different reasons. Adelaide is really still benefiting from the exodus of people from the Victorian market. While Brisbane is driven by positive and sustainable growth influences of affordability, population movement, and ongoing demand from a wide range of buyers.
Perth was the exceptional performer this month. Strong growth, strong demand, and it’s not hard to understand why. It still represents value relative to the eastern states, and when you combine that with solid economic drivers, it continues to attract both investors and home buyers.
Darwin delivered one of the more interesting results. After a strong January, February looked much flatter. That could simply come down to low transaction volumes. It’s a small market, and when there aren’t many sales, the data can shift quite quickly. So it’s one we’re keeping a close eye on rather than drawing any big conclusions just yet.
Hobart is showing some signs of life, although the data is a little inconsistent. It seems that the data chasers have moved from Darwin and are now focusing on Hobart. If you’re thinking about buying in Hobart because someone has told you it’s about to bounce, be warned. The ONLY thing that has changed in Hobart is the sales activity – no other reliable drivers are supporting the bounce and that means it’s not sustainable.
When you step back and look at all of that together, the pattern emerges. The more affordable markets, particularly those with strong population growth and economic drivers, are continuing to perform, while the more expensive markets are starting to level out.
The rental market is telling a similar story.
Darwin, Hobart, Brisbane and Perth are all still experiencing strong rental growth. Brisbane in particular is picking up, which may well be linked to workers arriving for major infrastructure projects.
Sydney is still seeing rental increases, even off a very high base, and Melbourne remains relatively affordable, although we expect that to change over time as migration continues and demand builds. So from a rental perspective, there’s still pressure across most markets, which continues to support property prices in those stronger regions.
What Changed After 28 February
The biggest shift this month is not the data itself, but what happened immediately after.
1. Interest Rates Moved Higher
The RBA increased the cash rate on 17 March to 4.1%, with markets now expecting:
- Potentially two more increases this year
- A higher-for-longer interest rate environment
Importantly, market forecasters have changed their view quickly. Forecasts that previously expected rate cuts are now pointing in the opposite direction. Of course, things could change back equally as quickly. The key theme is that uncertainty remains high, markets are adjusting in real time, and that means opportunities will emerge for strategic thinkers.
2. Global Instability and Oil Supply Concerns
The Middle East conflict has introduced a new layer of uncertainty. Australia will need to manage oil supply and usage, and other flow-on effects include:
- Pressure on fuel prices
- Potential cost-of-living impacts
- Increased caution in financial markets
At this stage, property markets have not shown any immediate reaction, particularly in high-demand segments.
3. Until 28 February, Borrowing Activity Was Increasing
Prior to these events, lending activity was strengthening:
- +5% increase in loan approvals (volume)
- ~10% increase in loan values
- Rising participation from first home buyers
This suggests underlying demand was steadily building through February.
4. Federal Policy Discussions
In preparation for the Federal Budget in May, the government conducted discussions on potential changes to:
- Negative gearing
- Capital gains tax changes
- Support for home buyers
Property owners and buyers had their own opinions but as to whether any changes will be legislated, we won’t know until May. Of course, as Scott pointed out, any changes introduced can also be eliminated.
5. High Speed Rail Network Announcements
Until Sydney’s second airport became a reality, it used to be joked about as a ‘pie in the sky’ improbability. Now the High Speed Rail is sitting in this category, though it really is getting a move on with funding announced in February to action the ‘development’ phase of the project.
An ‘authority’ has been established – the High Speed Rail Authority. They have an office in Newcastle and now . . they have a website . . this is getting serious. All jokes aside, we’re keeping our eye on developments because it will have massive impacts for property prices in key locations.
All of this has led to a revision of property forecasts for 2026.
Earlier in the year, forecasts were much more optimistic. Now, they’ve been pulled back.
Instead of strong growth across the board, the expectation is now more moderate, with Brisbane and Perth continuing to lead, and Sydney and Melbourne potentially remaining flat or even declining slightly. See below for the revised base case scenario from SQM Research which we discussed in depth during the podcast, along with the revised forecasts from the major banks.
Remember, it’s important to put those forecasts into context. They are high-level views across entire cities. And as we know, markets don’t operate like that in reality.
Within any city, there are areas performing exceptionally well, and others that are not. That’s where buyers need to be very careful.
So what does all of this mean if you’re actually trying to buy?
The first point is that strong markets are still strong. Brisbane, Perth, the power base of Western Sydney and popular regional areas are continuing to perform, and competition remains high in those locations.
The second point is that not all markets are moving in the same direction. Even within softer cities, there are pockets of strong growth.
Thirdly, holding costs are becoming more important. With interest rates potentially moving higher, buyers need to understand their numbers and ensure they have a buffer in place.
The fourth key point is that with such clear differences emerging, strategic moves are important. Ensure you’re applying the right strategy to the right area.
Short-term uncertainty will always exist. But if you’re buying a property that is well selected, aligned to your goals, and supported by the right fundamentals, it will perform over time regardless of short-term noise.
One final point that Scott and I both emphasised is the importance of looking forward, not backward. There’s a growing tendency to rely heavily on historical data. But property decisions shouldn’t be made by looking in the rear-view mirror.
What matters is what’s coming next. Population movement, infrastructure, employment, and demand drivers over the next three to five years are the indicators of where real opportunities will emerge.
So while February gave us a useful snapshot of where the market was, the events that followed have already shifted the conversation.
And as always, the buyers who perform best are not the ones reacting to headlines, but the ones making clear, structured decisions based on what actually matters.
Watch the full discussion here.
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.
