The housing market is sending a blunt message to buyers in two of Australia’s biggest cities: prices can still rise even when rate fears are weighing on household budgets. In Perth and Brisbane, the latest forecasts point to another year of sharp gains, while borrowers face less room to move.
That tension is now sitting at the centre of the national story. For people trying to buy a home, the numbers are not just abstract forecasts. They are the difference between a deposit that might work and one that falls short, between staying in a rental and finally getting a set of keys.
Why are Perth and Brisbane leading the housing market?
Canstar’s outlook shows median house prices in Perth and Brisbane are set to climb by more than $50, 000 by the end of the year. Perth is predicted to rise by 12. 3 per cent, while Brisbane is forecast to increase by 9. 7 per cent.
That growth means Perth’s median house price would move from $1. 05 million to $1. 11 million, while Brisbane would lift from $1. 20 million to $1. 26 million. In both cities, the increase is large enough to keep pressure on buyers who are already stretching their budgets.
Sally Tindall, data insights director at Canstar, said: “Both of these markets are hurtling towards prices that are fast becoming unaffordable for people looking for four walls and a patch of grass. ”
How are rate hikes affecting borrowing power?
The rise in prices is happening alongside weaker borrowing power. Canstar analysis shows a single Australian earning the average full-time wage could potentially have borrowing power cut by $25, 000 after the February and March rate hikes.
That squeeze could deepen further. With three more 0. 25 cash rate hikes predicted this year by Westpac, that borrowing power could drop by $58, 700. For buyers, that creates a double hit: higher prices in some markets and less capacity to borrow in the first place.
It also explains why a falling price in one city does not necessarily mean easier access. Sydney’s median house price is expected to fall by $2, 139, while Melbourne is forecast to fall by $7, 829. Sydney’s figure represents a 0. 6 per cent drop from the start of the year for houses, but the broader housing market pressure remains tied to affordability and lending power.
What does this mean for households on the edge?
The human cost of these shifts shows up in decisions made far from the data tables. A household may try to borrow to the limit, hoping prices keep climbing long enough to justify the risk. But when rates, employment or the economy move in the wrong direction, that strategy can become dangerous.
Ms Tindall warned of that pressure clearly: “The danger is, people will borrow to the limit, banking on prices continuing to climb. If circumstances change – whether that’s interest rates, job security or the economy – it could leave some households overexposed. ”
That warning matters because the housing market is not moving evenly. Some buyers will still face fast-rising prices in Perth and Brisbane, while others in Sydney and Melbourne may see modest easing. But across all of it, affordability remains the central issue.
For now, the scene is familiar: people checking listings, recalculating repayments, and trying to judge whether the market will leave room for them. The figures suggest the answer depends heavily on where they are looking, but the pressure itself is broad. In this housing market, the question is no longer only where prices are heading. It is how many buyers can keep up.
