February 2026 housing update: growth steady as the market splits

Article by Alison Cheung Communications Manager 12 March 2026

Australia’s housing market kept rising in February, with national dwelling values up 0.8% for the month, according to the latest data from Cotality. That is a touch higher than January’s 0.7% monthly rise, showing price growth is still moving forward at a national level. 

But the headline number only tells part of the story. Under the surface, the market is dividing more clearly. Some markets are accelerating while others are stabilising. For agencies, that means one national trend is not enough to explain what is happening on the ground.

Sydney and Melbourne slow as buyers focus on attainable homes

Sydney and Melbourne both recorded 0.0% monthly dwelling growth in February, making them the softest of the capital city markets. Over the rolling quarter, conditions were softer again, with Sydney down by -0.1% and Melbourne down by -0.4%. 

At the same time, demand is still active in more attainable parts of the market. Unit values rose 0.5% in both Sydney and Melbourne in February, even while overall dwelling values were flat. 

With median dwelling values sitting at $1,296,039 in Sydney and $826,132 in Melbourne, it is no surprise that the two largest capitals are so far the most sensitive to February’s cash rate increase to 3.85%. More expensive markets are often the first to react when interest rates rise, as borrowing capacity tightens more quickly for buyers. 

Tight supply is still pushing up prices in the smaller capitals

While the markets in Sydney and Melbourne were flat, several mid-sized capitals are still recording solid growth. Perth led the market in February with a 2.3% rise in dwelling values, followed by Brisbane at 1.6% and Adelaide at 1.3%. That is well above the 0.6% rise across the combined capitals. 

These gains are happening in markets where available stock remains tight and buyers are still competing for limited choice. For the industry, this points to a market where supply is still doing a lot of the work. When stock levels remain tight, prices can keep moving higher simply because buyers have fewer homes to choose from. 

This is also showing up in the types of properties buyers are choosing. In Brisbane, unit values rose 2.1% in February, compared with 1.5% growth for houses. A similar pattern appeared in Perth, where units increased 2.9% while houses rose 2.3%. The same dynamic can be seen nationally, with unit values rising 0.9% over the month, slightly ahead of 0.7% growth for houses. 

Taken together, these results point to a clear shift towards more attainable price points. When affordability becomes a bigger factor, buyers often look for smaller homes or units as a way to enter the market, which helps keep those segments moving. 

What this means for the months ahead

The housing market heading into the rest of 2026 appears relatively steady overall. Prices are still expected to go up, but growth will be more measured and will vary between locations and property types. 

Market activity this year is likely to be shaped by where buyers can realistically enter the market and how far their borrowing capacity can stretch. 

For agencies, the message is clear: the most active part of the market is still the more accessible end. 

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Disclaimer: The information enclosed has been sourced from Cotality and the Reserve Bank of Australia and is provided for general information only. It should not be taken as constituting professional advice.      

PropertyMe is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.       

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