Pushing the limit
What factors will constrain or drive prices this year?
For many Perth homeowners, their house probably earned significantly more than they did in the lead up to Christmas. Home prices in Perth jumped 2.4 per cent in November. That’s a pretty astonishing $21,000 in just one month added to the price of a median home, which equates to a gain of around $5000 a week.
While it’s a nice equity jump for those on the ladder it begs the question – how long can prices keep rising at record rates given wages are nowhere near keeping pace with rising entry costs.
Ironically, it’s comparative affordability, along with lifestyle factors, that has triggered a swing away from the traditionally big ticket capitals of Sydney and Melbourne and fuelled
rapid price rises in second-tier capitals Perth, Brisbane, Adelaide and, more recently, Darwin.
In the past five years, the pricing leader board of Australian capitals has been reshuffled (see Home Price Graph) as Melbourne fell off the pace with anaemic growth of only 15.5 per cent, compared to gains of the high 89 per cent for Perth, 86.7 per cent for Brisbane and 79.8 per cent for Adelaide.
In 2025 Darwin joined the party, posting the highest annual gain (albeit off a low base) of 18.9 per cent for the year. But as momentum shifts to more affordable markets, some are asking if Australia’s housing market will finally bump up against a price ceiling in 2026 as buyers become unwilling or unable to extend themselves further.
The outlook for 2026
While the median dwelling price across the nation rose about 8.6 per cent in 2025, to just over $901,000, many forecasters expect this to slow to around 5-7 per cent in 2026.
The major factors expected to impact price growth this year are:
Interest rate uncertainty
Expectations of further rate cuts in 2026 were turned on their head in October 2025 as the combined effects of Federal Government incentives and rate cuts in February, May and August of the same year (dropping the rate from 4.35 to 3.6 per cent) triggered a rush of investors and first-time buyers into the market.
This caused home prices to unexpectedly spike in October and November, which drove inflation gains of 3.8 per cent and 3.4 per cent respectively, well outside the RBA’s 2-3 per cent target band. Suddenly forecasts switched from cuts in 2026 to rises in 2026, leaving home-buyers’ in a state of uncertainty.
Affordability
This is a perennial issue, but should significantly impact how different regions perform in 2026 as buyers flow to more affordable areas.
Many borrowers are already stretched and, with pessimistic forecasts on interest rates, borrowing capacity may reduce further. A cash rate rise of 0.25 per cent can cut around $20,000 from the buying budget of an average lender.
This affordability issue may help keep a lid on prices as it limits what people are able to pay, however generational wealth is a growing factor in helping younger buyers meet the rising market.
Banking regulator APRA has signalled it is alert, if not alarmed, by risks associated with the level of debt Australians are shouldering to climb on to the property ladder. APRA has announced it will limit highly-leveraged lending this year in an attempt to cool the investor market. From 1 February 2026 banks must limit loans with a debt-toincome ratio above six, to just 20 per cent of their loan books.
In terms of what this means for Australian markets, regional areas and lower-tier capitals are expected to see the biggest gains in 2026, as buyers and investors chase value. Despite growing affordability issues, real estate commentators SQM Research have recently published their Boom and Bust Report for 2026 and are predicting double-digit growth in Perth, Brisbane, Darwin and Adelaide, with closer to 5 per cent in the other capitals.
Migration
Net migration slowed significantly to 306,000 in 2024/25 which should take some pressure off the housing market. Migrant levels have been falling steadily since hitting a high of 536,000 in 2022/23 and clocking in at 429,000 in 2023/24.
However, it remains above the pre-Covid, long-term average which hovered closer to 240-270,000. The largest cohort of migrants arriving in Australia each year are students, usually looking for rental accommodation in capital cities.
Supply
Although building approvals hit a nearly four-year high at the end of 2025, led by a surge in unit developments, Australia is still going to fall well short of its National Housing Accord target to build 1.2 million homes from July 2024 and 2029.
A recent estimate put the shortfall at more than 400,000 homes, putting upward pressure on prices. The culprit? Dire productivity. In the past three decades productivity in the construction sector has slumped 53 per cent, meaning it takes twice as long to build the average house today as it did in 1995. Even accounting for larger houses, productivity is still down 12 per cent.
In summary: The story of house prices in 2026 looks set to be a question of just how far home buyers can stretch in the face of possible rate rises and constrained supply. It could be the year generational wealth, or the bank of Mum and Dad, is going to become one of the most prominent lenders in the country.
Customise
and create!
Looking for a creative escape that’s equal parts fun and meaningful? These paint-yourown vase sets from Journey of Something invite you to slow down, switch off, and let your imagination take the lead.
It’s a wonderfully hands-on activity, perfect for a quiet afternoon at home or a colourful session with the kids, where creativity (and a little mess) is all part of the fun. And when it comes to gifting, this DIY set is a refreshingly out-of-the-box idea: thoughtful, personal, and guaranteed to result in something truly one-of-a-kind.
Available at journeyofsomething.com
Avoid the void
Get across the insurance exclusions that can cause headaches for homeowners
Having an insurance claim rejected can be financially and emotionally devastating. Homeowners trying to do the right thing can get caught out by unexpected exclusions, such as leaving your home vacant for a couple of months, carrying out renovations (even small ones), or running a side-hustle from home.
Doing your homework is your best defence, and while the start of new year is a great time to review your coverage, don’t forget to bring your finetoothed comb. To help get you started we run through some little-known but common trip hazards in home insurance. When comparing policies, always check the Product Disclosure Statement (PDS) for headings such as ‘Changes at Your Address’ for clues to situations that may impact or even void your coverage. These conditions can vary significantly between insurers so it’s a good way to spot significant points of difference between insurers.
Renovations
Some major insurers will withdraw or suspend coverage if you’re undertaking renovations valued from as little as $25,000. With the price of trades and materials today, that would capture even minor home improvements.
And don’t think you can get around it by DIY-ing, with one major insurer stipulating the exclusion covers “renovations, alterations, extensions and structural improvements with a total retail value of more than $25,000 (whether or not this is the actual cost to you).” So, frustratingly, trying to save money by doing the work yourself can still leave you exposed if the retail value of any improvements would be above the stated threshold.
Kindness Wins
Tell us about a moment of kindness that made a difference. With everyone juggling back-toschool, back-to-work and back-to-life routines, this time of year can feel especially full.
Share how a small moment of kindness made things just that little bit easier, for you or someone else for a chance to win $1000.
How: in 350 words or fewer, send your answer to: havencompetitions@afgonline.com.au placing ‘Act of kindness’ in the subject line. Include: your name, address, email, phone number and the name of your mortgage broker.
Dates: opens on February 23, 2026 and closes on April 30, 2026.
Winner: will be decided on May 1, 2026 and notified by telephone after this time.
Terms and conditions: visit http://bit.ly/HavenWin
If the worst happens, and your home is badly damaged or even destroyed, you may find your policy voided if you have failed to notify your insurer of any ongoing work at your property — even if the damage was unrelated to the renovation.
Builders are required to carry their own insurance, but this usually only covers the portion of the structure they are working on, with damage to any other parts of the building usually not covered. It’s a good idea to check precisely what insurance coverage your builder has in place, including public liability.
Some insurers may offer to continue coverage during a renovation but may apply a lower cap on claims (often around $50,000). Niche insurance products are available for homeowners during renovations.
Leaving your home empty
Insurance can be voided on a home left unoccupied for around 60 consecutive days, although with some policies it can be as few as 30 days. This can hit homeowners who take extended holidays, investors who leave properties vacant, or even those who move out temporarily while renovations are in progress.
There is a certain logic to the get-out clause. Leaving a home empty can
increase some risks. For example, a water leak would usually be picked up early by a resident but may cause more extensive damage over time if no one is home. A vacant house may also be at greater risk of burglary or vandalism.
To avoid triggering this exclusion, homeowners can consider getting a friend, family member or house sitter to stay at the property, even for a short period to break up the number of consecutive days it remains empty. However, if the occupier pays any rent, this can create problems if you have residential insurance. Again, there are specialised products on the market for homes that are regularly left vacant.
Running a business from home
This little-known exclusion hit the headlines during Covid when nearly everyone started a side-hustle. Having an Australian Business Number (ABN) registered to your home address may void your insurance, regardless of what your business is, or how much you earn from it.
A Victorian couple found out the hard way in 2022 after an electrical fault started a fire in their home. Their claim was rejected after their insurer discovered they sold eggs through an honesty box at their farm gate. Although the egg sales, totalling about $70 a week, were not related to the fire, the insurer claimed it would not have offered the couple residential insurance had they declared the business. Before long similar stories cropped up of other ABN holders having their insurance cancelled on the spot when they tried to update their policies.
Running a business from a residential home can change the risk profile. For example, if customers are visiting the premises it elevates public liability risks. And if the business involves using expensive, flammable or heat-generating equipment this can also increase the threat of fire or theft.
This exclusion only applies to people running a business, not those working for an employer from home. As insurance policies renew annually, homeowners are expected to keep their insurer appraised of any relevant changes in circumstances, such as running a business from home, a change to the structure, or a change in the way the house is occupied.
Renting out a room
This has become a popular way to help make ends meet during a cost-of-living and housing crisis. But it’s important not to overlook potential insurance issues.
Most residential insurance will not cover you if you are renting out a room within your home as this is classed as in income-producing activity.
Contact your insurer to discuss how renting out a room may impact your insurance. In some cases they may be able to issue an endorsement to continue coverage, or you may need to take out specialised landlords’ insurance. For short-stay leasing, some platforms offer host insurance but, again, it is important to keep your primary insurer fully informed about how the home is used.
While it’s not insurance related, another thing to bear in mind is how this income impacts your tax. Money earned through rent must be declared as part of your assessable income, but, equally, you may be able to claim some expenses.
The bottom line: Communicate openly and honestly with your insurer as any unknowns can cost you dearly. It’s better to find out sooner, rather than later if they won’t offer you coverage. There are plenty of boutique policies covering a host of circumstances, so you don’t need to get caught short.
Roast Sweet Potato with Rosemary Butter & Feta
This comforting autumn dish is simple to prepare and full of flavour. Serve warm, alongside roasted vegetables, grilled meats, or on its own as a standout vegetarian main with a fresh green salad.
2–3 medium sweet potatoes
2–3 tbsp olive oil
Sea salt and cracked black pepper
40 g butter
1–2 tsp fresh rosemary, finely chopped Crumbled feta, to serve
Preheat the oven to 200°C.
Wash and cut the sweet potatoes into even wedges to ensure they cook evenly.
Place sweet potatoes on a lined baking tray, drizzle with olive oil, and season generously with salt and pepper. Toss to coat.
Roast for 35–40 minutes, turning halfway, until the edges are golden and the centres are tender.
While the sweet potatoes are roasting, gently melt the butter in a small saucepan. Stir through the chopped rosemary and allow it to infuse for 1–2 minutes over low heat.
Remove sweet potatoes from the oven and transfer to a serving dish. Spoon over the warm rosemary butter and finish with crumbled feta.
HAVEN MONEY
Our last competition asked you to share your best AI hacks, and the responses were brilliant. While we saw plenty of clever and practical ideas, Lauren’s winning entry stood out by highlighting hacks for home, work and a little bit of humour.
“Tech advances usually overwhelm me, and I don’t even know how to use ChatGPT!
But since discovering Google Gemini, I have loved being able to manipulate images.
I am a children’s author, but definitely not an illustrator!
I can simply type in the image or scene I would like to see as a sample to show an illustrator.
In my personal life, I love being able to see what walls in my house would look like in a different paint colour etc. by uploading photos to Gemini and prompting changes.
My favourite use of AI was when I pranked my brother in law with a fake image of his house while he was overseas! He is very particular about his garden, so I used Google Gemini to add long weeds and an overgrown lawn to a photo of his house and sent it to him as an update of life back home. It was very realistic and I think he had a small heart attack!”
SAVING SMARTER
Try out these money tricks that can not only build wealth but can boost your brain power and health too.
Reset your saving goals in 2026 with some tips that can be rewarding in more ways than one.
Abandon that cart: The dopamine hit people experience when shopping actually kicks in simply by adding something to an online cart, according to psychologists. So why not stop there. It’s the online equivalent of window shopping.
Read more: Reading is one of the cheapest forms of entertainment but it won’t just help your bank balance, it’s great for your brain. Ditching your phone for a book at bedtime not only prevents late night impulse buys and pointless doom scrolling, it helps reduce stress, anxiety and loneliness and boosts memory, focus and empathy. It can take time to rebuild your deep reading focus if you haven’t done it in a while so be kind to yourself, persevere and don’t do it with the temptation of a phone screen next to you.
Stash your cash: Not a lot of us deal in cash anymore, but when we do have small change, we often tend to lose it – under the car seat, down the back of the couch, in the washing machine. Make an effort to stash it effectively. One saver makes a habit of putting $2 coins in a soft drink bottle. A full 600ml bottle equates to around $1000, while 2 litres can net you $3000. Now that’s incentive!
Rotate your platforms: Put your streaming services on a roster so you’re only paying for a single service but always have something to watch. Try four platforms on three-monthly rotating rosters throughout the year. That way, you still get to watch everything you want (eventually) but cut your streaming bill by 75 per cent. It should also help prevent the paralysis of choice when you’re overwhelmed by options and end up flicking aimlessly through trailers and platforms all night. Plan ahead for when to rotate by keeping an eye on regular news stories listing major series release dates across all streaming services.
Make yourself pay: Want to enjoy a soft drink or wine at home? Make yourself pay. It doesn’t need to be much — $2 for a wine and $1 for a fizzy drink. But it’s enough to cover your expenses and may make you go easy on unhealthy and costly drinks. A similar tip, but in reverse, is to transfer $5 into your savings account every time you skip the café and have a homemade or office coffee. It’s satisfying seeing how quickly this can add up.
Easy code hack: Ask ChatGPT to search for online discount codes. It can be surprisingly on point.
Do you really need Wi-Fi?: As mobile data plans become more generous, some canny savers have realised that using their phone hotspot at home can cover all their needs, allowing them to ditch expensive home internet plans. It’s the 2020s equivalent of ditching your home phone.
Push your luck with friends: It’s the 70s trend that’s making a comeback thanks to the cost of living crisis. Inviting friends to a ‘pot luck dinner’, probably better known in Australia as ‘bring a plate’, is no longer social death. Catering for large groups can be expensive and stressful. So, when the point is just catching up, providing the venue is a great way for everyone to save on going out to a restaurant (they may be secretly grateful). Try setting a theme, Mexican, Indian or Thai, to make it easy for guests and share planned dishes ahead of time to avoid double-ups.
Intermittent Fasting: You’ve heard of intermittent fasting or the 5:2 diet. How about 5:2 saving. It follows the same principle that it’s easier to be super strict on yourself for a couple of days each week, rather than denying yourself every day. Designate two days each week as ‘no spend days’. Try to make it easy by going for mid-week days, preferably not back-toback, such as Tuesdays and Thursdays. If you have trouble sticking to your resolve, it’s easy to put a temporary stop on your credit card through banking apps. It takes just a few clicks to lift it again, but it may be enough to make you reconsider your spending.
Take a minute (or two): Creating a sense of urgency, one-day sales or low stock warnings, is a tried and tested tactic to get shoppers to spend money on things they don’t really need and aren’t even sure they want. Take time to short-circuit the hard-wiring in your brain that thinks you might miss out on a bargain. One veteran saver says that when shopping at brick and mortar stores he always holds an item in his hand for two minutes, setting a timer on his phone as he thinks about it. Most of the time, the urge to buy it passes by the time his alarm sounds. Another rule of thumb: If you have to think about it, you don’t really want it.
The take-away: The secret to achieving any goal is to make it fun and reward yourself for small wins along the way. Saving money is the aim, but if it comes with added benefits, reducing stress, catching up with mates, eating healthier, you’re much more likely to stick to it.