This property market update covers the two forces doing all the work in 2026: the cost side, where housing inflation is running at 6.5% against a headline CPI of 4%, and the supply side, where there are simply not enough homes being built for the people who need them. If you own property, are paying rent, or want to do either, both forces are setting your prices. It is the same dynamic every property market update this year has pointed to, and it is not letting up.

Want to know what this market means for your next move? Reach out at startnow@sorenfinancial.com and we will talk specifics, not headlines.

Housing costs are outrunning inflation

The ABS numbers to May 2026 tell the story in one line: overall inflation 4%, housing 6.5%, electricity up 21.1% now the government rebates have ended. New dwelling costs and rents are the big movers inside that housing number. For investors this cuts both ways — your holding costs are up, but so is the rent the market will bear. For renters it explains the squeeze, and for builders it explains why new supply keeps getting harder to deliver at a price buyers can pay.

The supply problem is not fixing itself

Australia’s housing shortfall is structural: construction costs have risen faster than general inflation, capacity in the building trades is tight, and approvals-to-completions timelines have stretched. None of that resolves quickly. When supply is constrained and the population keeps growing, softness in prices tends to be shallower and shorter than buyers hope — which is exactly the trap we flagged for people trying to pick the bottom while their borrowing capacity shrinks.

What investors are doing about it

The lending data says investors have made up their minds: brokers settled $124.88 billion in new home loans in the March 2026 quarter, up more than 25% on the year, with investor activity a major driver — a trend we covered when investor loans started surging. Tight rental markets, rising rents and constrained supply are the classic backdrop investors look for. The discipline that matters in 2026: buy on the numbers (yield, serviceability at the buffered rate, buffer for repairs), not on the fear of missing out.

What this property market update means for you

Owners: your equity has likely grown while your costs did — a revaluation might unlock a better rate tier, see our guide to the best home loan interest rates. Buyers: supply is not coming to save you; get your finance sorted so you can move when the right property shows up. Investors: the fundamentals favour you, but only at the right purchase price and structure. And everyone: where rates go next matters less than being positioned for either outcome — the OurTop10 Rate Prediction Index currently reads 77.7% hold, 22.3% hike for the 11 August meeting.

Moral of the story: this market rewards preparation over prediction. Run your scenario on our calculators, then get in touch at startnow@sorenfinancial.com. Client reviews on OurTop10.