January 2026 housing update: a market that rewards strategic buyers and owners

Article by Alison Cheung Communications Manager 2 February 2026

Key points 

• Australian home values rose 0.8% in January to $912,465, a small lift from December. 

• Sydney and Melbourne returned to growth, while other markets continued to lead. 

• Cheaper homes are propping up the market as higher-priced stock barely moves.

• With growth uneven, knowing where to look is becoming just as important as timing.

Australia’s housing market kicked off 2026 with another month of growth, even as cost of living pressures and affordability continue to bite. National dwelling values inched up by 0.8% in January, taking the median home value to $912,465, slightly higher than December’s pace, according to Cotality’s latest data. 

January’s result points to a market that’s still moving forward, just not in the same way everywhere. Prices rose across every capital city and regional market, but growth was uneven. Some areas are powering ahead, while others are ticking along more steadily, shaped by affordability and what buyers can realistically pay right now. 

If there’s one key takeaway from January’s data, it’s this. As growth becomes more uneven, local insights from Property Managers and agencies matter more than ever.

Growth picked up slightly, but the market is losing steam

On the surface, January looks stronger than December. National growth lifted from 0.7% to 0.8% and every capital city and broad regional market recorded price gains. 

But underneath, there’s less momentum. Cities that surged last year are slowing and growth is increasingly dependent on specific pockets rather than broad demand. 

Low housing supply is still supporting prices. Listings remain 19% below last year and 25% below the five-year average, Cotality estimates, while sales activity has held up reasonably well. That’s keeping prices from falling, but it’s no longer driving strong gains across the board.

Sydney and Melbourne back in positive territory with minor growth

After small declines in December, Sydney and Melbourne returned to growth in January, signalling a stabilisation in Australia’s two biggest housing markets. 

Sydney home values rose 0.2% over the month to $1,290,537, while Melbourne values edged 0.1% higher to $830,371. While the gains were modest, they mark a shift away from the late-2025 softness and suggest buyer confidence is holding, even under tighter affordability conditions. 

Both cities remain just below their previous peak levels, but the return to positive growth shows demand hasn’t disappeared. Instead, it’s become more selective, with buyers taking a more measured approach at higher price points.

Perth is still leading, with growth settling into a steadier pace

The mid-sized capitals are still doing the heavy lifting and Perth remains the standout. 

Perth dwelling values rose 2.0% in January to a median of $961,898, the strongest monthly increase of any capital city. While the rapid growth has eased from late last year, the city is shifting from a surge phase into a steadier, more sustainable pace. 

Brisbane values rose 1.6% to $1,054,555, easing from earlier highs. Darwin continued to outperform with a 1.5% rise to $602,870. Adelaide followed with a 1.2% lift to $914,203, also down on December’s pace. 

Elsewhere, growth was less strong. Hobart increased by 0.5% to $722,339 and Canberra lifted 0.3% to $884,844. 

Across all capitals, housing values were up by 0.7% in January, pushing the combined capital city median to $1,002,520. 

Cheaper homes are doing the heavy lifting

One of the clearest signals in January’s data is where growth is coming from. 

Across the combined capitals, lower-priced houses rose by 1.3% over the month, compared with just a 0.3% increase for higher-priced homes. That gap shows buyers are focusing on what they can still afford, rather than stretching into premium stock. 

This trend helps explain why markets with lower median values continue to outperform. It’s also why overall price growth is holding up, even as borrowing limits and living costs squeeze households. 

Regional markets fit this pattern too. Combined regional dwelling values rose 1.0% in January, taking the median to $743,672, compared with a 0.7% lift across the capitals. Affordability remains the key drawcard. 

Why guidance matters more in this market 

What January really shows is that opportunity hasn’t disappeared, it’s just become more targeted. 

For investors, the upside now lies in knowing where to look, whether that’s more affordable suburbs with growth potential, specific property types or regional markets still delivering solid gains.  

For Property Managers and agencies, the current landscape makes your role even more valuable. When growth isn’t uniform, owners rely more heavily on advice around pricing, positioning and long-term strategy. Buyers need guidance on which markets represent the best value. In a market like this, good advice matters just as much as good timing. 

Disclaimer: The information enclosed has been sourced from Cotality 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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