In his August 2026 Market Update, inSynergy’s Chief Economist, Dr Kevin Hoang, outlines the latest data for each of Australia’s capital cities with analysis revealing our recommended markets continue to grow at double digits in the last 12 months, despite a small correction in August. This softening market offers investors greater negotiating power for higher quality assets that will support better long-time performance in infrastructure boom and tight supply markets.
August 2026 Property Market Update
The latest Cotality Home Value Index shows that Australia’s housing values softened in August with national values now 3.6% below the March 2026 peak. Investors may look at August 2026 with concern at first however not every property type and location is supported by strong fundamentals. The Cotality Home Value Index is representative of just the average growth of total properties in capital cities.
inSynergy only recommends high performing properties in select areas that are supported by location, strong population growth and infrastructure investment.
Here’s how each capital city performed on average for August 2026.
- Darwin continues to grow adding +0.6% in value for the month, supported by strong fundamentals including a low vacancy rate, undersupply of housing and a much more affordable entry option for investors compared to other markets.
- Sydney and Melbourne currently face the greatest cyclical pressure with falling buyer demand, relatively expensive prices, and increasing advertised stock resulting in faster price declines compared to mid-sized cities.
- Adelaide, Brisbane, and Perth have now entered the correction phase however this follows much stronger increases in values in the last 5 years compared to Sydney and Melbourne, with total gains recorded between 73.5% – 88%. A softer decline of 0.8% – 1.0% for the month is a small anomaly, taking into consideration the 5-year growth and the 12-month growth of 8.6% – 15.6%.
- Hobart softened by -0.2% remaining resilient, barely creating a dent in the 8.1% growth recorded over the past 12 months.
- Canberra has experienced a -1.1% decline in value for the month, on par with Melbourne.
Table 1: Price Growth: 1 month, 12 months and 5 years, average dwellings
| Capital city | August 2026 | 12-month growth | 5-year growth | Current conditions |
| Sydney | -1.4% | -4.6% | 9.5% | Deepest major-city correction |
| Melbourne | -1.1% | -4.7% | 2.3% | Continuing broad weakness |
| Brisbane | -1.0% | +10.8% | 88% | Correcting after very strong gains |
| Adelaide | -0.8% | +8.6% | 73.5% | Correcting after very strong gain |
| Perth | -0.8% | +15.6% | 78% | Correcting after very strong gains |
| Hobart | -0.2% | +8.1% | 9.2% | Relatively resilient |
| Darwin | +0.6% | +14.6% | 16% | Only capital still growing |
| Canberra | -1.1% | -0.4% | 6.2% | Correction accelerating |
Source: Cotality September 2026 HVI and Oxford Economics
When will the market head back to an upswing?
Historical property cycles show that the average price dip period lasted 0.7 years with a 2.9% drop. Given that national property values have fallen by 3.6% since March 2026, the market may currently be navigating its bottom. However, predicting the exact trajectory is more complicated this time, as homebuyers adjust to threats of a potential further interest rate hike, higher cost of living pressures, new tax policy changes and a more challenging economic environment.
The Government’s unpopular changes to housing could also be modified in the lead up to and result of the 2028 federal election. Should any of the Labor Government’s changes to residential property be reversed, investors will quickly flood the property market to take advantage of previous benefits, seeing house prices soar and increased competition.
Smart investors are wise to use this current period to select higher quality assets across inSynergy’s recommended markets that will generate stronger returns during the longer, more prosperous upswing periods. Reduced competition does not change longer-term fundamentals that drive the market including location, high yield, vacancy rate and population growth.
Median house prices are still up between 7.9% – 15.6% for the past 12-months across mid-sized cities and smaller capitals.
Sydney, Melbourne and Canberra have continued declining at softer rates due to higher vacancy rates and expensive price points. These small-term dips will be recouped in the next upswing period.
Table 2: Key Indicators: Houses
Different shifts across different property types
Units and Townhouses are experiencing continued growth across Darwin and Hobart with a one-month growth of 0.5% and 0.9%, supported by low vacancy rates.
While the major cities of Sydney, Melbourne and Canberra dropped slightly by 0.9% – 2.5% over 12-months, this represents half of the drop experienced by houses in these same areas.
For the 12-month period, double-digit growth was recorded for the 12-month period for Darwin, Perth and Brisbane, three key areas we have recommended for inSynergy clients due to the strong performing fundamentals that the property types in these cities offer for high performance.
Table 3: Key Indicators: Units and Townhouses
Rental markets remain exceptionally tight
The rental market continues to perform exceptionally well with SQM Research reporting that the national residential vacancy rate remained at just 1.3% in July, with approximately 61,000 vacant rental properties nationwide, well below balanced rental market conditions representing a drop of nearly 39,000 rentals compared to close to 100,000 rentals in 2020.
Conditions remain particularly tight in the markets we have been recommending.
- Darwin has the lowest vacancy rate of any capital at 0.3%
- Perth and Adelaide follow at 0.6%
- Brisbane is slightly higher at 0.9%.
By comparison, Sydney and Melbourne have eased to 1.7%, while Canberra has the highest capital-city vacancy rate at 1.8%.
SQM also reported that national advertised rents were 7.2% higher than a year earlier, with unit rents rising 7.7% and house rents climbing by 6.8%, contrasting with the Labor Government’s prediction that rent would rise by only $2 per week.
Among the capitals, Darwin recorded the strongest annual rental growth at 14.1%, followed by Brisbane at 8.3%, Perth at 6.6%, Sydney at 6.3% and Melbourne at 6.0%.
Adelaide’s advertised rents were 3.5% higher over the year.
Table 4: SQM Research Weekly Rents Index
New housing builds remains a challenge
ABS data released for July show that total dwelling approvals fell 3.6% over the month to 17,687 dwellings. Private-sector house approvals declined 4.2%, while approvals for apartments and other non-house dwellings fell 0.4%.
Construction costs, trade shortage and higher financing costs continue to create substantial delays in building enough houses to meet the demand. This is despite initiatives from the Government for investors to focus on building new properties by limiting negative gearing benefits for new builds from 1 July 2027.
This ongoing housing shortage will support rent growth and provide a foundation for the next upswing period.
Figure 1: New Housing Approvals
Source: ABS
What do the latest market trends mean for investors?
The August data reconfirms the need to distinguish between short-term market volatilities and long-term investment fundamentals.
Darwin remains the strongest market. It is the only capital city still recording positive monthly growth; annual dwelling values are 14.6% higher, its vacancy rate is only 0.3%, and advertised rents are approximately 14.1% higher than a year ago.
Perth, Brisbane and Adelaide have now entered the adjustment phase. The important difference is that these cities are corrected from stronger positions. They continue to record positive annual capital growth, extremely tight rental vacancy rates and high rental growth. Their lower entry prices relative to Sydney also attract strong demand from both first home buyers and investors.
Sydney and Melbourne currently face the greatest cyclical pressure. Falling buyer demand, relatively expensive prices, and increasing advertised stock have resulted in faster price declines.
What are we watching for the next 12 months?
Our longer-term recommendation remains in Perth, Brisbane, Adelaide and Darwin, which are supported by their stronger rental-market fundamentals, relative affordability, population and economic growth, and constrained housing supply.
The rest of 2026 is likely to remain volatile, but prices are predicted to stabilise gradually. In this environment, investors should place greater weight on cash flow, vacancy risk, local supply pipelines, infrastructure investment, and the quality of the property.
In fact, investors will have a better opportunity to select better quality assets that will grow more quickly once the market recovers.
Table 5: Capital City Assessment: Units and Townhouses
If you’re interested in learning more about the property markets and how inSynergy’s recommendations have helped clients build property portfolio’s worth millions over the past 20 years, contact us below to get started on your journey towards financial freedom.
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