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House prices expected to surge next year in Melbourne, KPMG report predicts

House prices expected to surge next year in Melbourne, KPMG report predicts

Sky News AU5 hours ago
House prices across Australia are expected to rise 4.5 per cent in 2026 as one major city is expected to surge after a recent slump.
The latest forecast from consultancy firm KPMG arrives as upcoming rate cuts are forecasted to boost dwelling prices.
Melbourne is predicted to be the best performer, where house prices will jump 6.6 per cent next year while units will rise 7.1 per cent in price.
This would follow the Victorian capital's post-pandemic slump, where the average dwelling price slid three per cent in 2024, despite increases across other major cities.
KPMG's chief economist Brendan Rynne said the surge was driven by the city's properties having relatively lower prices compared to others.
'Melbourne's property market is on the verge of coming out of its post-covid slumber and is finally set to catch up to its east-coast counterparts, with the city seeing some decent gains next year,' Mr Rynne said in a statement.
The report noted that Melbourne's position as a key destination for overseas travellers boosted demand and prices.
KPMG's latest report shows momentum has continued to build in the housing market nationally, as the consultancy firm revised its forecast for house price growth in 2025 from 3.3 per cent to 4.9 per cent.
'You can really feel a renewed confidence in the market over the last few months in particular, with the quarterly growth rate hitting the highest level since this time last year,' Mr Rynne said.
'Two interest rate cuts so far this year, and a likely succession of further cuts on the way are helping to kick start the property market for the first time since the pandemic, putting more pressure on prices.'
Unit price growth is expected to outpace houses with a 5.1 per cent bump next year.
This comes as the lower-cost dwellings offer a more affordable entry point for Aussies looking to break into the housing market.
'A growing number of people are struggling to be able to purchase their own home, increasing the demand for apartments, which have a far lower entry,' Mr Rynne said.
Sydney house prices are forecast to jump 4.2 per cent next year while units will increase 6.1 per cent in price.
Brisbane prices, which have surged over recent years, will increase 3.1 per cent for houses and 1.5 per cent for apartments next year, according to KPMG.
The forecast follows the Reserve Bank of Australia delivering two rate cuts after holding rates for almost a year and a half to stamp out post-pandemic inflation.
The central bank is widely tipped to deliver another cut when it meets on Tuesday.
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