Three new capital cities are set to join Sydney in the million-dollar housing club this year, highlighting how the term “millionaire” has lost its traditional lustre. House values are forecast to climb again in 2026 – though not at the same pace as 2025 when interest rate cuts and government homebuyer incentives fuelled extra demand – and this should deliver $1m-plus median sale prices to Brisbane, Canberra and Melbourne by December.

The latest figures from the Real Estate Institute of Australia show Sydney house prices are way ahead of other capitals, with a median sale price of $1.75m. Next comes Brisbane ($999,000), Canberra ($989,000) and Melbourne ($955,000), which are all likely to breach $1m this year if values rise at least 5 per cent.

Despite strong recent price growth, houses in Adelaide ($875,000) and Perth ($850,000) are unlikely to break the $1m barrier for a few years yet. The REIA figures for the September quarter show the prices of other dwellings – such as units, apartments and townhouses – remain well below $1m, led by Sydney ($840,000), Brisbane ($735,000), Adelaide ($665,000) and Melbourne ($646,000). Monthly home price data from research groups Cotality and PropTrack put Brisbane’s median value for all dwellings at just above $1m as at December 31.

Author and University of Adelaide Master of Property program director Peter Koulizos said $1m median house prices were a reflection of the typical Australian home. “The typical house in Australia is a three-bedroom detached dwelling on 600-700sq m, which is more expensive than other homes around the world,” he said. “Many homes in urban areas around the world are just small apartments with no land.”

The $1m price tags meant gaining millionaire status was not what it used to be, Mr Koulizos said. “A lot of people wished in the past to win $1m in a lottery, but that now buys you the average house these days,” he said. “Many people technically will become millionaires in 2026 when their properties hit the magic $1m mark. That’s just a sign really of how most states in Australia coped with Covid, and generally how Australia coped with Covid compared to the rest of the world. During Covid, for most of Australia property prices increased at a far greater rate than average and that has continued.”

Mr Koulizos said Victorian government policies and a relative lack of consumer confidence were reasons why Melbourne property had not performed as well as other capital cities. He said he expected a “tale of two markets” in 2026. “I think we will continue to see Brisbane, Perth and Adelaide do very well and Sydney, Melbourne and Hobart won’t do as well,” he said.

A report last month by realestate.com.au forecast Brisbane and Perth home values to grow the most in 2026, by 7-10 per cent, followed by Adelaide at 6-9 per cent, and both Sydney and Melbourne at 5-7 per cent. The report said demand for housing will be supported by a rising population, investor activity and the impact of last year’s three Reserve Bank interest rate cuts, but it warned potential rate rises this year will cause slower-than-expected home price growth.

“The very strained level of housing affordability is likely to keep growth from accelerating from its pace in 2025,” the report said. “On the supply side, new housing delivery continues to lag population growth. The number of active listings in Brisbane, Perth and Adelaide is down around 45 per cent from pre-pandemic levels.” Some property specialists have tipped greater improvement from the nation’s two biggest markets. Rethink Group chief executive Scott O’Neill said “Sydney and Melbourne are back”. He forecast Melbourne residential property prices to rise 6.6 per cent this year, and Sydney 7.8 per cent as they reclaimed dominance after being outpaced by smaller capital cities in recent years. “If you’ve been waiting for a crash, you missed the bottom,” he said. “It already happened. The next two years will reward investors who buy quality assets.”

Property Investment Professionals of Australia chair Cate Bakos said investors had “rediscovered Victoria”. “There seems to be no rate of slowdown from interstate investors who have identified the value that Victoria represents when contrasted against other states that have had prices soaring,” she said. However, Property Investors Council of Australia chair and Empower Wealth managing director Ben Kingsley warned the Victorian government’s anti-investor stance was still holding back prices and its “economy is underperforming.”

Hotspotting founder Terry Ryder said most property markets across Australia should perform strongly this year. He predicted 2026 to be “the year of the small capital cities.” “Darwin already leads on price growth and there is now significant movement in the Hobart and Canberra markets, which haven’t shown any life for several years,” Mr Ryder said. “The emergence of Tasmania – both Hobart and regional Tasmania – as a nation-leading growth market will surprise many in 2026.”