KPMG Forecast 2026: Melbourne Tops Growth, Units Set to Outperform?

KPMG’s 2026 property forecasts spark plenty of debate, and this episode breaks down what those calls might mean for Australian investors without backing any prediction. We explore why Melbourne is tipped for strong growth, how Sydney, Adelaide, Brisbane, Perth, Canberra, Hobart, and Darwin rank, and why units may outpace houses across major capitals.

House projections sit at Melbourne 6.6%, Adelaide and Darwin 5.1%, Sydney 4.2%, while unit forecasts run higher, driven by affordability pressures, construction costs, and demand for well-located stock near jobs, transport, and rental hubs.

Rate expectations add another layer, with a possible 2.85% cash rate influencing serviceability and buyer behaviour. We dig into vacancy trends, rental momentum, micro-market pressure points, and what signals often matter more than headline averages.

These are questions worth asking and frameworks that help investors think smarter about 2026.

 If this conversation sparked new angles on your strategy, follow our show, pass it on to someone weighing an upcoming purchase, and drop a review sharing which city you believe could surprise us in 2026. 

Transcript

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Setup And Episode Focus

SPEAKER_00 0:00

KPMG predict that Melbourne is going to be the top performing capital city of 2026. My name is Casey Taylor. I'm the host of the Taylor Property Wealth podcast.

House Price Predictions By City

SPEAKER_00 0:12

And in today's episode, we are talking about KPMG's predictions for where prices are going to go in 2026. This one is based on some of their predictions in August of 2025, where they see both houses and units go for 2026. We're going to break down those predictions. And as mentioned, they have Melbourne out front as the top performer for houses in 2026. We're going to go through some of these stats now. Sydney, they have predicted 4.2% growth for the year for houses. They predict that Melbourne is to grow 6.6%. They predict that Brisbane is going to grow 3.1%. They predict Adelaide is to grow 5.1%. They predict Perth to grow by 1.6%. They predict Hobart to grow by 1.7%. They predict Darwin to grow by 5.1%. And Canberra to grow by 4.8%. There's a little bit of variety there. Their predictions predict only a couple of those capital cities to not even do above 2%. It's always good to look locally based on LGAs, suburb level, not just the metro holistically for that performance. But they have Melbourne as the prediction to perform the most. And then followed by Adelaide and Darwin tied for second at 5.1%. And then Sydney at 4.2%.

Unit Forecasts And Affordability Angle

SPEAKER_00 1:54

Now their predictions for units are actually higher than houses. So their prediction for units for Sydney, 6.1%, for Melbourne 7.1%, Brisbane 1.5%, Adelaide 3.7%, Perth 1.7%, Hobart 2.7%, Darwin 7.3%, and we have Canberra at 5.6%. So there's some significant predictions there that units will outpace houses. That could be an affordability perspective in that short-term period of

Cash Rate Outlook And Caveats

SPEAKER_00 2:30

time. They also predict to see that the RBA and the cash rate are sitting at 2.85% at the end of 2026. Now that was before a couple of changes with some inflation data we have seen over the last couple of months. So it will be interesting to see where that does level out in 2026. But this is their prediction for property prices. We've seen some pretty strong growth just last month alone in that sector for some of these capital cities. So it's going to be interesting to see if KPMG's predictions are accurate for 2026.

Community Questions And Wrap

SPEAKER_00 3:10

We would love to know what you believe property prices are going to do in 2026. Leave us a comment. Let us know what you think is going to happen with property prices. What capital city do you think is going to perform the strongest in 2026? We would love to know what everyone out there is thinking. This is a short, sweet episode today on the predictions of what 2026 will look like as per KPMG. Hope you've enjoyed this episode and we'll see you on the next one.