The Property Planner’s Monthly Market Update: May 2026
- Property Planning Australia
- Jun 8
- 3 min read
Welcome to the Property Planner’s Monthly Market Update, your comprehensive resource for the latest insights and trends in the real estate and economic landscape!
Stay informed and ahead of the curve with our expert analysis, helping you make well-informed decisions in the ever-evolving property market.
May Was Flat, but Far from Quiet
National dwelling values were unchanged in May, bringing the strong growth recorded at the beginning of the year to a halt.
But the flat national result hides a very divided market.
Combined capital city values fell by 0.1%, while the combined regional markets grew by 0.6%.
Sydney and Melbourne led the declines, falling by 0.9% and 0.8% respectively.
Perth and Darwin Continue to Defy Gravity
Perth and Darwin were May’s strongest-performing capitals, each growing by 1.5%.
Brisbane and Hobart followed, both recording gains of 0.9% for the month.
These remain exceptionally strong monthly results, particularly against a flat national market.
While momentum is easing across much of the country, these four capitals continue to demonstrate that Australia’s property market is moving at very different speeds.
Melbourne’s Relative Affordability is Hard to Ignore
Melbourne’s median dwelling value is now approximately $812,600.
That places it below Canberra, Adelaide, Perth, Brisbane and Sydney.
Meanwhile, Perth’s median dwelling value has climbed above $1.05 million, while Adelaide is now around $950,700.
There is only about $60,000 separating Melbourne and Hobart.
That would have been difficult to imagine a few years ago.
Melbourne still faces challenges, including subdued confidence, elevated listings and a large apartment market that has experienced prolonged underperformance.
But its relative affordability compared with the other major capitals is becoming increasingly difficult to overlook.
Rental Pressure Is Still Building
National rents rose by 0.6% in May, lifting annual rental growth to 5.9%.
The national vacancy rate remains around its record low of 1.5%.
Renters are already spending around one-third of their pre-tax income on rent, suggesting many households may be approaching the limit of what they can afford.
This could lead to larger group households, more multigenerational living and renters moving further away from established employment and family networks.
The potential loss of established houses from the rental pool is particularly concerning.
If long-term investors sell to owner-occupiers, those homes do not disappear, but they do disappear from the rental market.
Melbourne’s Rental Yield is Rising
With rents continuing to increase while property values remain subdued, gross rental yields are gradually improving.
The combined capital city gross rental yield reached 3.45%, its highest level since June last year.
Melbourne’s gross rental yield increased to 3.87%, its highest level since August 2013.
Melbourne has traditionally recorded yields in the low threes, so this is a meaningful shift.
More Properties Are Coming to Market
Nationally, new listings were 12% higher than in May last year, with every capital city recording an increase.
Darwin led the way with the largest increase in new listings, up 44.7%, followed by Canberra at 24.4%.
For buyers, the lift in fresh stock provides more choice and potentially greater negotiating power.
However, total listings remain lower than a year ago in Brisbane, Perth, Hobart and Darwin.
This suggests that, despite more properties coming to market, available stock is still being absorbed relatively quickly.
Buyer Sentiment Presents an Interesting Contradiction
Consumer sentiment fell by 2.9% in June to 80.6, placing it among the weakest readings in the survey’s 50-year history.
Households are deeply concerned about their finances and the cost of living.
House price expectations also fell sharply, dropping by 14.9% during the month.
Yet the “time to buy a dwelling” index increased by 12.6%.
In other words, more people believe buying conditions are improving precisely because they expect weaker price growth.
That is the contrarian opportunity.
The difficulty is turning that belief into action.
Buyers often say they are waiting for better conditions.
But once confidence returns and growth becomes obvious again, much of the opportunity may have already passed.
Want to learn more? Listen to the Property Trio Podcast
Reach Out to Us
If you would like to discuss your next steps, property plans, and mortgage strategy, get in touch with us today. Our team of experts is here to guide you through the complexities of the market and help you achieve your property goals.
