House prices predicted to rise by up to $134k by end of 2027, despite lower chance of RBA cuts
05 Dec 2025
Median house prices could rise by up to $134,000 by the end of 2027 according to Westpac’s latest property price forecast, released earlier this week.
Westpac’s latest predictions have Perth and Brisbane growing significantly more than previously expected in 2025, however, the bank has downgraded its property price forecasts for Sydney, Melbourne and Brisbane in 2026 on the back of lingering inflation concerns and a subsequent revision to cash rate forecasts.
Despite this, Canstar analysis of Westpac’s forecast, using Cotality data, shows the median house price in Sydney could reach $1.7 million in just over two years’ time, while Perth’s could rise to $1.09 million if the bank’s updated forecasts play out.
If the rises materialise, the median price in five of the six capital cities analysed would be above the $1 million mark, up from just two currently.
Note: Darwin and Canberra are not included in the forecasts.
Projected median house prices: today vs end 2027 – Westpac forecast
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| City | Median house price (today) |
Estimated house price (end 2027) |
Difference to today |
|---|---|---|---|
| Sydney | $1,584,125 | $1,701,999 | +$117,874 |
| Melbourne | $978,392 | $1,106,468 | +$128,076 |
| Brisbane | $1,111,431 | $1,229,445 | +$118,014 |
| Perth | $955,832 | $1,090,053 | +$134,221 |
| Adelaide | $948,328 | $1,045,198 | +$96,870 |
| Hobart | $749,079 | $798,930 | +$49,851 |
Source: canstar.com.au. Westpac property price forecasts Dec 2025, Cotality Home Value Index, 31 December 2024 and 30 November 2025. Assumes house prices rise in line with dwelling forecasts. These calculations are estimates based on forecasts, which are subject to change and may prove inaccurate. No guarantee can be given that prices will rise in the future. Forecasts should not be relied upon as the sole basis for making financial decisions. Individuals should consider their own circumstances and seek independent financial advice.
Which cities could see the biggest price growth?
Perth is predicted to deliver the strongest gains through to the end of 2027, according to the Westpac economic team, with dwelling prices forecast to jump 14% this year, 8% in 2026 and a further 6% in 2027. Applied to houses, this would lift Perth’s median by $134,221 between now and the end of 2027, taking it to $1,090,053.
Westpac dwelling price forecast
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| 2025 forecast |
2026 forecast |
2027 forecast |
|
|---|---|---|---|
| Sydney | 6% | 5% | 4% |
| Melbourne | 5% | 7% | 6% |
| Brisbane | 14% | 6% | 4% |
| Perth | 14% | 8% | 6% |
| Adelaide | 8% | 6% | 5% |
| Hobart | 5% | 4% | 4% |
Source: Westpac dwelling price forecasts released 2 Dec 2025.
Three cash rate cuts this year delivered an estimated $35k boost to borrowing power
Across the capital cities, property prices have surged in 2025, spurred on by the three cash rate cuts this year, which have boosted buyers’ maximum borrowing capacity and lifted sentiment.
Canstar’s analysis shows that a single person earning the average full-time wage, as recorded by the Australian Bureau of Statistics (ABS), could potentially borrow an additional $35,000 from the bank as a result of the three RBA cuts.
Increase in borrowing capacity following three cash rate cuts in 2025
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| Old borrowing capacity |
New borrowing capacity |
Increase | |
|---|---|---|---|
| Single person (av. wage) |
$509,000 | $544,000 | $35,000 |
Source: canstar.com.au. Calculations are based on the current new owner-occupier variable rate from the RBA at 1 February at 6.25% and today at 5.51%, a loan term of 30 years, annual expenses of $24,000 for singles, 90% of post-tax income available to service the loan and expenses, and a 3%-point interest rate buffer. Tax calculations based on the current financial year, excluding Medicare Levy. Assumes borrowers have no existing debts, minimal expenses and no dependents. Borrowers should seek personal financial advice before deciding how much to borrow and know the actual amount will vary depending on their personal circumstances and between lenders.
Banks continue to grow their mortgage books as property prices rise
The prospect of six-figure gains in house prices comes as the Australian Prudential Regulation Authority (APRA)’s latest monthly data shows lenders are writing more home loans.
The latest APRA Monthly Authorised Deposit-Taking Institution Statistics, released last Friday, shows the total value of housing loans among all ADIs is now $2.39 trillion.
In dollar terms, CBA again recorded the biggest monthly rise among the big four banks in its residential mortgage book in October, increasing by $4 billion in the space of a month (+0.6%).
Over the past year, Australia’s biggest bank grew its residential mortgage book by over $36 billion (+6%).
APRA Loans to households: housing
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| Amount | Market share |
Monthly change |
Year-on-year change |
|
|---|---|---|---|---|
| CBA | $607 billion |
25% | 0.006 | 0.06 |
| Westpac | $495 billion |
21% | 0.006 | 0.04 |
| NAB | $340 billion |
14% | 0.005 | 0.05 |
| ANZ | $321 billion |
13% | 0.004 | 0.05 |
| Macquarie | $157 billion |
7% | 0.022 | 0.23 |
| All ADI loans |
$2.39 trillion |
100% | 0.006 | 0.06 |
Source: APRA Monthly Authorised Deposit-taking Institution Statistics, October 2025. Includes both owner occupied and investor loans to households for the big four banks and Macquarie. ANZ figures do not include the former Suncorp mortgages.
Canstar’s Data Insights Director, Sally Tindall says, “Westpac’s economic team might have wound back some of its property price expectations for 2026, but these forecasts still point to another two years of solid gains in markets where demand outstrips supply.”
“If Westpac’s forecasts play out across house prices, a median-priced house in Perth could rise by an estimated $134,000 by the end of 2027. That’s a tough pill to swallow for anyone in the Western Australian capital trying to save up to buy a home.
“Would-be first home buyers in cities like Sydney, Melbourne, Brisbane and Perth could be staring down six-figure price rises in the space of just over two years. Great for anyone buying now, if it materialises, however, for those struggling to get into the market, it’s yet another reminder of how far the goalposts can move.
“A rate hike in 2026 could well pour some cold water on the property market, however, it’s unlikely to be enough to see prices fall. Unless we see a meaningful uptick in supply or a significant shift in economic conditions, the market is likely to keep marching higher.
“First home buyers looking for a way in should focus on building up a deposit to get a foot on the property ladder. That could well mean buying something smaller, uglier, further away from the CBD, but that’s likely to be better than stretching the budget too far and saddling yourself with an unmanageable amount of debt, especially now rate hikes could potentially be on the RBA’s agenda next year.”
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This article was reviewed by our Insurances Writer Nick Whiting before it was updated, as part of our fact-checking process.
