Land market June quarter 2026: sales hold up despite uncertainty

A quarter shaped by uncertainty

Given the ups and downs of everything from the Middle East War, oil and fuel prices, economic and inflation data and the rates outlook, as well as property investor taxation changes, land markets in the June quarter probably performed as well as could be expected

Established markets keep softening

Established property prices are now clearly falling in Sydney and Melbourne, and even the monthly rate of growth has pulled back significantly in Perth, Brisbane and Adelaide. Auction clearance rates have bounced slightly off the post-Budget lows but remain at levels implying ongoing price weakness, particularly in Sydney and Melbourne.

At a macro level, consumer sentiment remains subdued, but weekly measures are now well up off the lows and are trending in the right direction. Inflation outcomes have been better than initially feared after the Middle East War impacted fuel supplies, with headline inflation now expected to peak below 4.5% and underlying inflation below 4% (down from 6% and 4.5% not long after hostilities commenced).

Rates outlook now hinges on economic data surprises

This has meant that the rates outlook by markets is being driven by surprises in other economic data points. A strong June employment report saw the chance of one more rate hike by December climb from 70% to nearly 100%. Just a few weeks prior, it had fallen to below 50% on the back of some weaker economic data points and softer inflation forecasts. The July survey of economists by the AFR had the median case of rates now on hold at 4.35% until the next move was down in the second half of 2027.

Much of the hysteria related to the Federal budget investor taxation changes has dissipated, and it’s clear to most that the inflation outlook and interest rates remain the main driver of property market outcomes in the next 12 months.

Why June and September were always going to slow

The three rate hikes delivered in February, March and May, the uncertainty of any further rate hikes and impacts of investor taxation changes introduced in the Federal budget mean that June and September quarters were always the most likely candidates for a slowdown in land sales activity.

Sales held steady across the three markets

An increase in sales in South-East Queensland offset some easing in our Melbourne and Adelaide markets to have overall sales for the June quarter essentially steady across the three markets on both a quarterly and rolling annual basis. Annual price growth remained completely non-existent in Melbourne but strong in the other markets. Delving a bit deeper into the quarterly sales total, we can see monthly activity generally eased in June compared to April and May. Early indications in July are for that trend to continue.

Let’s take a high-level look at each of the individual land markets, how sales and prices performed in the June quarter, and what the rest of 2026 might hold.

The full state-by-state breakdown, including sales volumes and forecasts, is in the complete June Quarter QMI. Register to access the full June Quarter QMI.

Melbourne: greenfield supply falls well short of demand

Annual sales for Melbourne are now running below 8,000, down from 8,200 for 2025. This is significantly below our estimate of underlying greenfield demand of 14,000 sales. The June quarter for Melbourne was relatively stable, with sale volumes and prices steady across the three months.

As has been the case for most of 2025 and 2026, fundamentals remain unchanged. Population growth has stabilised at high levels and there is pent-up demand from years of low activity, first home buyers have high financial incentives, and Melbourne remains as relatively affordable as it has been in years. But the established market outlook has clearly deteriorated, and as the key competitor for new house and land, until it stabilises, it’s hard to see any step up in new land activity. Sales for 2026 are now likely to end lower than 2025 levels, even if we see some tick up in the December quarter as the interest rate outlook stabilises. The journey back toward long-term activity levels is now unlikely to resume until well into 2027.

South-East Queensland

Rate hikes seem to have taken longer to make any impact on this heavily undersupplied market, but a slowing of sales rates in the month of June, within a quarter where total sales rose 25% (right in line with our forecast from March) is the first sign of weakness. Price growth remains strong however, still comfortably outpacing what is a hot but slowing established market.

Even with the increase in land sales, they remain well below what we consider long-term average levels. As we have seen over the last 18 months, ongoing high levels of price growth demonstrate that there remains plenty of demand. The downside of the strong price growth is the continued deterioration of land price relativity to other states, including Melbourne.

With June quarter sales of 1,261 in line with our forecast in March for a recovery in sales volumes, maintenance of this level of sales is still largely dependent on the ability of developers to bring stock to market. For the remainder of 2026, we expect price growth to remain positive but ease back toward established market levels, which are themselves slowing back toward more sustainable levels of dwelling price growth.

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Adelaide

Sales fell for the third consecutive quarter in June, compounding the large fall seen in the March quarter. Quarterly sales volumes were 310, down another 17% on the already low March levels and essentially half the level of sales achieved in September 2025. Continued price growth shows that the demand remains more than the supply the market can provide.

Adelaide remains neck and neck with Melbourne in terms of land affordability. Annual sales volumes are now steady on the prior 12-month period but well below longer-term levels. As per our outlook from March, the future path of sales still depends highly on the ability of developers to bring new product to market. There are risks to the downside for demand with population growth forecast to decline materially, and affordability relative to the established market is becoming stretched.

The full June Quarter QMI includes detailed data on every corridor, plus forecasts for the rest of 2026. Register to receive the June Quarter QMI and all future editions.