Experts are forecasting record house prices across all capital cities by the end of next year, and rental growth is set to accelerate once again, even as the local market takes a breather with slightly disappointing auction clearance rates over the weekend. The Domain annual forecast report says that after years of affordability strain and tight supply, the next 12 months will see a surge in prices. Three cuts in interest rates this year, rising household incomes and a wave of first home buyer demand under the expanded First Home Guarantee Scheme will push prices higher. However, by the end of 2026 new supply will hit the market, and affordability issues will again become prominent, so the surge is likely to taper into 2027, according to Domain.

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News in brief

It is arguably the most important eight days in the retail year, with Black Friday and Cyber Monday sales kicking off today, and well over $7 billion expected to be spent over the next week.

Prime Minister Anthony Albanese and other world leaders issued a declaration at the G20 summit in South Africa over the weekend, backing the Paris climate change agreement, endorsing net zero climate emissions by the middle of the century and praising free trade.

The local ASX is set to bounce when it opens this morning, with futures trading suggesting it will jump by one per cent following a strong weekend on Wall Street. That’s after a 1.6 per cent tumble on Friday.

Federal ALP has widened its lead over the opposition in the latest Newspoll in The Australian. The government is ahead 58pc to 42pc on a two-party-preferred basis. Core support for the coalition is static at just 24 per cent, its lowest level since primary voters were first counted in November 1985.

Passengers on Australian airlines will no longer be able to use power banks during flights in a crackdown aimed at preventing cabin fires. The moves match action taken by international aviation authorities this year, kick in next month, and cover Virgin, Qantas and Jetstar.

Fear-o-meter

There is plenty of nervousness around financial markets right now, as demonstrated by gyrating equities over recent weeks. The local market is expected to open higher today, but no-one is confident the ASX hasn’t further to fall.

Risk assets such as Bitcoin have struggled with one unit now worth $US80,000. It is off 25 per cent this year.

The Wall Street tech giants are stuttering. Since last week’s boom result, Nvidia has lost six per cent of its value. In fact, since its peak less than four weeks ago, Nvidia has lost about $US700 billion worth of value.

The “boring” tech stock is Apple, because it isn’t spending huge amounts (relatively) on AI capacity, and it is outperforming, with its market value pushing past $US4 trillion over the weekend.

Even the local housing market isn’t as strong as sellers would like, given we are in the peak spring selling season. The weekend’s preliminary clearance rate of under 70 per cent is the first time it has fallen that far in five months. 

There is a sense of nervousness around the place.

Fear & Greed Q+A today

On the week ahead for the economy, including the first release of the new expanded monthly CPI measure - a more comprehensive monthly inflation figure that will help inform interest rate decisions: 

 

"We're looking for an annual figure, the headline figure, probably staying around about that 3.3-3.4 per cent because a lot of the what we call administered prices - prices of childcare and electricity for example, where the subsidies are being phased out - have spiked as they've unwound that reduction. The trimmed mean or that underlying inflation measure is probably going to be holding just a smidge, a tenth or two below 3 per cent. So sort of not horrendous, but just a little too high for the RBA and the market's confidence about getting that next rate cut. We're looking for a figure, headline 3.4 per cent, the trimmed mean about 2.9 per cent in annual terms."

Greed-o-meter

Australia’s housing market is on track to break new records across every capital city by the end of next year, according to Domain’s Forecast Report for 2026. This table shows the predicted growth rate for house prices in our biggest cities, and the median value by the end of 2026.

Source: Domain

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