City to take mantle of nation’s most expensive units
As Sydney’s strongly held prices begin to fall, a new capital city is emerging as the most expensive place for units in the country.
According to Domain’s forecast for the 2026/27 financial year, Brisbane average unit values are forecast to rise by up to nine per cent to $893,000 in 2027.
This means the city will eventually eclipse Sydney, where the average price is expected to be no higher than $855,000.
“This is just one example of the shift in the affordability hierarchy between our capital cities,” said Domain chief economist Nicola Powell.
There is strong investor activity and population growth in Queensland’s capital, resulting in entry-level homes being some of the most expensive in the country in January.
A tight rental market has created good conditions for high returns; It’s something investors will be looking for if they continue to buy properties as negative impacts and capital gains tax changes become law.
Units almost always have higher yields than single-family residences, given that they have a better supply line and are expected to outperform homes in every market.
However, yields vary in each city.
Dr. “Brisbane offers more opportunities to find something positive,” Powell said, noting that strong capital growth is forecast for the city.
“If you’re going to invest in housing now, you’re going to have to chase high-yield markets.”
Combined house prices in capital cities are forecast to increase by just 0.1 per cent in 2026/27, given changes in the country’s tax settings.
The federal government used the budget in May to announce that it would remove negative practices on most property purchases from then on, but it could still be used for new construction.
The flat 50 percent reduction in capital gains tax paid on properties held for more than 12 months is also planned to be abolished. Instead, an inflation-adjusted discount will be applied.
The changes will make investing a less attractive option for Australians.
Growth is supported by just three markets. Prices are expected to increase by 5.5 percent in Brisbane, 6.0 percent in Adelaide and 7.4 percent in Perth.
In Sydney, values are likely to fall by 3.3 per cent. Melbourne could see a 4.4 per cent drop.
But limited growth may not be the welcome reprieve for first home buyers as the government suggests.
“This is a difficult situation for the first home buyer because you don’t want to buy in anticipation of further price declines and then push yourself into negative equity,” Dr Powell said.
Low investor activity could eliminate competition for first home buyers, but affordability was unlikely to change significantly enough to truly benefit them.
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