National Market Summary – Oliver Hume Land Index & Residential Outlook June 2026

A quarter of heightened economic uncertainty

Oliver Hume's June 2026 quarter Land Index largely reflects the weaker established market conditions being observed across the major capitals. The June 2026 quarter was characterised by the highest level of economic uncertainty in over two years, particularly for the residential property market.

While the Middle East War commenced at the end of February, expectations of oil price impacts flowing through to domestic inflation peaked in April and May. The impacts of February and March rate hikes began to flow through, exacerbated by the May increase. And of course, the Federal Budget announced changes to investor taxation of established properties on May 12.

Only two of five major land markets remain above trend

It was only December 2025 when four of the five major land markets were operating at levels above longer-term trend. In March, this shifted down to only three markets, and our June quarter Land Index results show that now that number has fallen to only two markets.

South-East Queensland and Perth markets still have the majority of indicators performing historically strongly, with SEQ the only market to see an increase in its score in June. Adelaide moved back towards equilibrium, while Sydney regressed from a balanced market to join Melbourne as operating below long-term average levels, right in line with their weaker established markets.

Some economic risks have eased since March

While the June quarter was characterised by heightened economic uncertainty, some of these risks have eased since the March Index publication. Despite the ongoing Middle East crisis, the impact on oil and domestic fuel prices has been less than expected, with the flow-through to domestic inflation also more limited than initially forecast.

However, after July's inflation data, the rates outlook remains the same with markets still fully pricing in one more rate hike in 2026, with major forecasters also falling in line with one more hike before the rate cutting cycle begins in the second half of 2027. As always, the rates outlook remains the key short-to-medium-term driver of the outlook.

As always, the rates outlook remains the key short-to-medium-term driver of the outlook. The hysteria related to the investor taxation announcements in the 2026 Federal Budget didn't take too long to abate. The established market was clearly slowing prior to the Budget due to the February and March rate hikes (and expectations of at least two more), and while clearly a short-term negative to sentiment, the rates environment and outlook was always going to remain the main driver of an established market slowdown.

Consumer sentiment has moved past its bottom

Consumer sentiment has clearly moved past the bottom experienced in May and June as have other early residential market indicators such as auction clearance rates and open house attendance. They remain weak, and consistent with overall price easing, but aren't pointing to the generational house price falls many have been forecasting.

Private credit markets remain a risk to watch

While housing finance available to consumers remains readily available via the banking and financial services industry, there has been an increased focus recently on private credit markets. The RBA has flagged the heavy exposure of local private credit funds to real estate and construction, and we are already seeing some disruption to some key markets. We'll be keeping a close eye on this going forward.

Established market outlook unchanged from March

Our outlook for established market price growth over the next 12 months remains unchanged from March. We still expect falling established dwelling prices over the September quarter and possibly into the December quarter, particularly in Sydney and Melbourne. But as the rates outlook stabilises (with or without a final hike) and consumer expect the next move in rates to be down, we expect the established market recovery to commence by mid-2027. Most established markets remain undersupplied to various levels although this undersupply is expected to ease from recent highs, given the inevitable fall in investor demand.

As outlined in the March Index, we expect the long-term impacts of the Federal Budget changes to investor taxation to be net positive on new dwelling demand and still secondary compared to the impact of interest rate movements and supply and demand dynamics. Some evidence of this is already appearing, with the heavy falls in investor activity in the established market not being reflected in the new dwelling market, where loans for construction, newly built dwellings and land held up well in the June quarter Lending Finance figures.

The national land market weakened over the year to June 2026

Overall, the national land market weakened in the 12-months to June 2026 as the three rate hikes delivered by the RBA impacted consumers, exacerbated by Federal Budget related sentiment. Still, unmet underlying demand remains strong, credit readily available and first home buyer incentives are still in place.

View the market-by-market Land Index scores - June 2026.

Recovery pushed into 2027 for weaker markets

A weaker macroeconomic outlook for the second half of 2026, as the three rate hikes from the first half work their way through the broader economy and are potentially supplemented by a fourth, combined with weaker established markets across the country, has pushed any land market recovery in those weaker markets well into 2027. We expect volumes to remain flat over the next 12-months in most markets, reflecting some easing in the short term but recovering in 2027 as the rates environment stabilises.

Prices are likely to remain weak in Sydney and Melbourne, with any recovery not coming until the second half of 2027, after volumes pick up. Land growth is expected to continue to ease, but remain positive in those undersupplied land markets of Perth, Brisbane and Adelaide.

Townhouses set to play a growing role

In addition to these broader macro trends, we expect the shift in product mix to become increasingly important. With apartment delivery constrained by development costs and detached housing affordability remaining stretched, townhouses are likely to play a growing role in meeting future housing demand.