Market update: Where to buy as WA slows and Tasmania gains traction

How the smaller capitals are doing:

Western Australia

Capital Property Advisory Group CEO, Matthew Hughes, said Western Australia continued to outperform the national market on almost every meaningful indicator, but conditions have shifted significantly since the start of the year.

“Cotality Home Value Index for June 2026 showed Perth recorded 0.7 per cent growth for the month, making it one of only a handful of capitals to post a positive result,” he said.

Perth’s median house price of $1,093,000 also sat above Melbourne’s $948,482, which Hughes said would have seemed improbable just a few years ago.

However, he noted the pace had slowed, with the number of properties surging, days on market nearly doubling since February, and three in 10 Perth houses now selling below their listing price, compared to one in 10 earlier this year.

Hughes said that the Reserve Bank of Australia’s (RBA) rate rises had compressed borrowing capacity and dampened buyer confidence, while the federal budget had a direct impact on investor certainty.

“REIWA noted a clear drop in investor enquiry post-Budget, and the proposed ban on new LBRAs within SMSFs has introduced genuine strategic uncertainty for a cohort of investors who had been actively planning around that structure,” he said.

However, Hughes said the fundamentals underpinning Perth still remained sound, and that there was still genuine value and growth ahead in the market.

“What we are entering is not a downturn – it is a transition,” he said.

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“The extraordinary boom-time growth of the past four years is coming to an end, and Perth is moving into a phase of more sustainable, moderate growth that will, in time, begin to taper further as the market finds its natural equilibrium.

Hughes said that despite the slower market, transaction volumes will rise when talk of rate rises eases, the Iran war stabilises, and when investors and owner-occupiers have had time to properly absorb the budget changes.

“That renewed demand will, in turn, slow the current build-up in available stock and provide a floor under prices,” he said.

“This is a market that now rewards careful strategy over momentum buying – and that, frankly, is where good advisers earn their value.”

South Australia

Likewise, Peter Koulizos, known as “The Property Professor”, said Adelaide’s property boom was slowing, but the city was still outperforming most of the country due to its strong economy.

Koulizos said the most recent boom, which began in June 2020, was the longest and strongest he had experienced, but the conflict in the Middle East and the federal tax changes had put a dampener on the market.

“Auction clearance rates decreased and numbers of people at open inspections and auctions also dropped,” he said.

“It has now been several months since budget night and the fallout continues. Days on market are increasing, as is vendor discounting. Real estate salespeople are leaving the industry as they’re finding it hard to make a buck,” he said.

Koulizos said prices weren’t expected to drop anytime soon, as there was no panic selling, but noted that prospective purchasers would have their time in the sun after owners benefited for years.

“With all the first home buyer grants and incentives and the drop in investors looking to buy established property, in particular, it will be a great time for first home buyers to get into the market,” he said.

Koulizos forecast the Adelaide market, and most of the country, to experience a softening of the market for at least two years, but it would depend on future interest rates, government incentives or disincentives.

“So, what do I know? If you have owned property over the last few years, be grateful. If you are looking to buy property, be happy,” he said.

“If you are a renter, be scared because rents will go up as existing investors sell their properties (to first home buyers) and potential investors are put off by the CGT and negative gearing changes.”

Koulizos said he was confident that it was just a softening of the market, rather than a crash.

“The unemployment rate is very low, and most people who want a job either have one or can easily find one,” he said.

“This is not like the recession in the 1990s where interest rates and unemployment were in the double digits. If people are employed, they can choose to cut back expenses if needed, so that they can keep paying their mortgage.”

Tasmania

Buyers Agents Tasmania director, Sam Spilsbury, said the market had moved through the 2025–26 financial year with renewed confidence, following a period of more subdued activity after the COVID-19 boom.

While conditions had not yet returned to post-pandemic years, Spilsbury said demand had strengthened, stock remained relatively constrained, and quality properties continued to attract competitive interest.

“In Hobart, the market has been particularly resilient, with median house prices sitting at approximately $746,000 and annual growth of around 8 to 9 per cent,” he said.

He said that well-located family homes, character properties, and homes close to schools, services and employment hubs continued to perform strongly.

“Buyers remain price-sensitive, however, with turnkey homes attracting the strongest competition while overpriced properties are spending longer on the market,” he said.

Meanwhile, he said regional Tasmania had been the standout performer in the last financial year, with Launceston’s median house price reaching $628,000, recording annual growth of 10.6 per cent.

The North West market has also experienced some of the strongest growth in the state, with median house prices rising 18.9 per cent to around $576,500.

“These markets continue to attract buyers seeking affordability, lifestyle benefits and stronger rental returns than are typically available in larger mainland cities.

“Investors have been particularly active in Launceston and the North West, where rental yields remain attractive, and entry prices are comparatively affordable,” he said.

Elsewhere, Spilsbury said investor activity had improved throughout the year, supported by an ongoing rental supply shortage and historically low vacancy rates.

“Hobart has also seen renewed investor enquiry, although higher purchase prices and increased holding costs continue to influence decision-making,” he said.

Looking ahead, Spilsbury said he forecast similar conditions over the coming year, with demand expected to remain underpinned by relative affordability, limited housing supply and continued lifestyle appeal.

“While rapid price growth is unlikely, the market appears well-positioned for steady activity levels, particularly across regional centres where affordability continues to drive both owner-occupier and investor demand.”