Australia's apartment market is softening as rising interest rates and inflation weigh on buyer and investor sentiment, with quarterly sale prices falling from recent peaks across most capital cities even as annualised figures remain positive. Perth (21.8%), Brisbane (18.2%), and Adelaide (13.0%) continue to lead annual apartment price growth, while larger markets like Sydney (4.4%) and Melbourne (1.6%) show more modest gains. Apartment sales volumes fell 12% year-on-year to around 105,000, and new leases dropped sharply to 64,000, roughly half the volume recorded a year earlier, as tenants opt to stay in place amid tight vacancy rates. Despite near-term caution, chronic undersupply – driven by population growth and rising construction costs – is expected to sustain upward pressure on prices and rents over the medium to long term. Build-to-rent continues to expand, with 2026 on track to be a record year for completions, supported by new tax incentives in NSW and WA.
Residential
