Mortgage Report 2026 | A Look At Where Australia is headed
FY25 certainly wasn’t boring. We saw more loans written, larger dollar volumes flowing through the system, and a housing market that behaved very differently from state to state. Momentum returned in some regions with record median values, while others moved more cautiously as affordability, migration patterns and policy settings shaped local conditions.
Interest rate expectations shifted, investor appetite strengthened, and first-home buyer activity remained a key driver in select markets. At the same time, refinancing volumes continued to reflect borrowers actively reassessing their positions in a higher-for-longer rate environment.
What became increasingly clear over the year is that there is no single “Australian mortgage market” — there are multiple micro-markets operating simultaneously. Western Australia and Queensland displayed very different dynamics to Victoria and the ACT. Loan sizes, approval times, serviceability buffers and buyer sentiment all told slightly different stories depending on postcode.
In this report, we break down what actually happened — where growth accelerated, where it cooled, and what that means heading into 2026. I’ll include simple interactive charts where they add clarity, so you can see the trends rather than just read about them.
Whether you’re a borrower, broker, investor or industry professional, this report is designed to cut through the noise and provide a clear, data-driven view of where the mortgage market stands — and where it may be heading next.
Firstly, let’s begin by taking a look at the Australia Property Market Performance Graph….
Australian Property Market Performance
| City | November % Change | Annual % Change | % Change from Peak | Median Value |
|---|---|---|---|---|
| Sydney | 0.5% | 5.1% | New high | $1,269,659 |
| Melbourne | 0.3% | 4.2% | -0.9% | $823,495 |
| Brisbane | 1.9% | 12.8% | New high | $1,015,767 |
| Adelaide | 1.9% | 8.2% | New high | $891,004 |
| Perth | 2.4% | 13.1% | New high | $914,229 |
| Hobart | 1.2% | 4.7% | -6.9% | $703,340 |
| Darwin | 1.9% | 17.0% | New high | $578,871 |
| Canberra | 1.0% | 4.2% | -2.4% | $891,626 |
| Capital Avg | 1.0% | 7.1% | New high | $978,077 |
| Regional Avg | 1.1% | 8.6% | New high | $723,107 |
| National Avg | 1.0% | 7.5% | New high | $888,941 |
The graph highlights a broad-based lift in property values across most Australian capital cities, with national dwelling values up 1.0% for the month and 7.5% annually — pushing the national median to $888,941 and marking a new high.
Perth, Brisbane and Darwin were standout performers, recording the strongest annual growth rates (13.1%, 12.8% and 17.0% respectively), all sitting at fresh peak values. This reinforces the continued strength of the smaller capital markets, particularly those benefiting from interstate migration, relative affordability and tight housing supply.
Sydney also reached a new high, with steady annual growth of 5.1%, pushing its median value above $1.26 million. While not the fastest-growing market, it remains the most expensive.
Melbourne, Hobart and Canberra tell a slightly different story. Although values have risen over the past year, they remain below previous peaks, indicating a more gradual recovery phase compared to the sharper momentum seen in WA and Queensland.
Regionally, the picture remains strong. Regional markets recorded annual growth of 8.6%, also reaching new highs, reflecting continued demand beyond the major metro centres.
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Overall, the key takeaway is that the national market is expanding — but growth is not uniform. Performance is being driven disproportionately by Western Australia and Queensland, while parts of the east coast are recovering more moderately.
Snapshot (quick bullets):
New loans (FY25): 544,630 — roughly +6.8% y/y.
Residential portion: 96% of new loans (521,750).
Aggregate new‑loan value (FY25): $380.6 billion — much stronger dollar growth than count growth.
Refinances (FY25): 401,114 — up a little (+1.1%).
VIC recorded 148,126 new mortgages (largest by mortgage count); other states combine for the remaining ~396,504.
Volumes rose, but dollars rose faster If you hear “more loans” you might assume everything is normal — but when the total dollars moved rise faster than the number of loans it usually means larger average loans (higher prices) or a shift toward higher‑value transactions. That changes who’s competing for homes: not just more buyers, but richer ones in many suburbs.
Almost everything is residential
About 96% of new loans were for residential properties. That concentration matters: household servicing risk dominates the credit picture. For buyers, that raises the stakes of rate moves; for policymakers, it concentrates vulnerability in household balance sheets.
States diverge: VIC vs the rest
Victoria recorded 148,126 new mortgages; the rest of the nation accounts for the remaining ~396,504. That split matters: mortgage behaviour, first‑home buyer activity and investor demand vary by state — and national headlines hide those differences.
Refinancing: small rise, strategic importance
Refinances increased only slightly: ~401,114 (≈ +1.1%). That small rise suggests most borrowers who could or wanted to refinance already did, and many now wait until clear savings appear. Practically: refinancing still pays when the math is clean; it’s not automatic.
The 2026 outlook: rise with nuance
Pulling forecasts together (KPMG, AMP, Domain, Money/industry reads): the consensus isn’t a crash — more like “regional gains, some slowdown, interest‑rate uncertainty.” KPMG flagged continued price rises into 2026 in many markets; AMP and some other analysts caution an easing in momentum. The bottom line: expect local variation. National averages will smooth away the bits you care about most — suburb and segment.
What this means for different players
First‑home buyers: competition and higher average loan sizes make it harder; look for suburbs with lower mortgage competition, secure pre‑approval and model worst‑case rates.
Investors: pick suburbs where rents are growing — price growth alone won’t save a weak yield.
Refinancers: calculate break‑even; small rate moves don’t always pay for fees.
Lenders & policymakers: residential concentration means household servicing risk is the dominant macro lever.
Quick NASA tactical checklist
Run a realistic 5‑year budget scenario.
If buying: pre‑approval + local suburb research beats national headlines.
If refinancing: test break‑even and keep an emergency buffer.
Track local supply metrics — new builds change dynamics faster than national price indices.
Your summary
FY25 showed stronger dollar momentum than count momentum — think bigger loans and higher prices in core segments, with the vast majority of credit still household‑oriented. 2026 likely sees modest gains in parts of the market and pauses elsewhere. The smart play is local research, realistic budgeting and avoiding the trap of believing national averages map to your suburb. It doesn’t.