4 property market hotspots and 2 big ideas to fix affordability

Please note this interview was filmed on Wednesday, 3rd December 2025.

The Australian property market delivered a stellar performance in 2025, with median house prices jumping more than 10% and crossing the million-dollar mark across every capital city for the first time in history.

The big question as we look to 2026 is whether this momentum can continue or whether rising interest rates, affordability constraints and limited supply will finally slow things down.

We asked Nerida Conisbee, chief economist at Ray White, and Kiril Ruvinsky from Strategic Investor Group to share their views on the following hot-button topics:

• What are prices around the country going to look like next year?
• Which cities will see the strongest growth?
• Which area of the property market is the riskiest for investors?
• What will improve housing affordability?
  

The unexpected twists of 2025

For Conisbee, the standout trend was the continued divergence between markets. Perth, Adelaide and the Gold Coast powered ahead while Melbourne, Sydney, Canberra and Hobart lagged behind.

Ruvinsky pointed to a different shift entirely: the explosion of buyer's agents and being “bombarded” by property investment marketing. Of particular concern to Ruvinsky are software-driven "hotspots" attracting waves of investors piling into regional areas that haven't historically performed well. 

Toowoomba, for instance, saw median prices double from $400,000 to $800,000 in just five years.

What 2026’s price growth could look like

Given that the interest rate outlook has changed, the pace of growth is unlikely to match 2025. Conisbee expects mid single-digit growth: 

Ruvinsky cautions that national averages can be deceptive and may distract investors from what’s actually happening in individual suburbs, and that it is critical for buyers to dig deeper than headline numbers.

The suburbs and regions with momentum

Conisbee is watching Perth's outer suburbs, particularly where government, first-home buyers, and investors are all competing for very limited stock. She's also eyeing Melbourne more broadly, noting the city has barely moved in three years and could be due for a catch-up.

Ruvinsky, on the other hand, is focused squarely on Sydney. 

“There is just so much to love about Greater Western Sydney right now… houses are still very affordable, and you’re buying well under the city average.”

He also highlights established apartments along the new metro line, where prices remain well below replacement cost.

The warning signs

Conisbee points to the impact of higher interest rates on new housing supply. With construction costs up 30–50% since 2020 and builders under pressure, she sees slower supply as a major barrier to improving affordability.

She notes that the government's 5% deposit scheme is also heating up the cheaper end of the market, stimulating demand and making affordability worse. (See chart below)

For Ruvinsky, the explosion of property spruikers and unregulated marketing tactics is one of the biggest risks facing everyday buyers. He warns that buyers chasing hype-driven hotspots could be left exposed if prices revert to trend.

“We believe that long-term property prices usually revert to their mean in various areas, and we're going to see a lot of people come unstuck and get hurt with those types of investments.”

Big ideas on affordability

No property discussion is complete without a take on the housing affordability crisis in Australia, and the pair closed with their proposals on how the government could make meaningful progress on the issue.

For Ruvinsky, addressing demand pressures with a temporary pullback in migration would give supply time to catch up. 

Conisbee argued for modernisation in how homes are built. A shift toward modular and factory-built housing – a method used widely overseas but still rare in Australia – would lift output and ease cost pressures.

For all of the insights, bold predictions, and policy changes that could shift the dial, watch the full panel discussion above.