FEAR & GREED | Business News House prices: where to from here?
Jan 4, 2026
Luci Ellis, Westpac's Chief Economist, shares her insights into the Australian housing market. She discusses the surprising slowdown in Sydney and Melbourne while Brisbane, Adelaide, and Perth thrive. From the impact of interest rates on household sentiment to current low housing supply, Luci covers it all. She highlights government programs boosting first-home buyer confidence and emphasizes housing's economic importance. Lastly, Luci reveals Westpac's optimistic forecast for a 6% increase in house prices by 2026-27, contingent on stable interest rates.
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Bullish Sentiment Meets Rate Risk
- Housing sentiment stayed bullish even as market momentum cooled in Sydney and Melbourne.
- Interest-rate expectations can quickly weaken sentiment if inflation surprises on the upside.
Low Listings Prop Up Prices
- Low listings keep people from selling because they won't find suitable replacement homes.
- That supply shortfall has supported prices and encouraged renovations and knockdown-rebuilds.
Use Guarantee Schemes Carefully
- Consider government guarantees as they can bring some buyers forward by easing deposit constraints.
- Expect a temporary pickup in borrowing and buyer sentiment from such policies, but watch for fading momentum.