# Commonwealth Bank now expects flat national home prices in 2026

The bank's 4 June housing note cuts its 2026 forecast for the second time in a month. It says Brisbane is still growing, only more slowly, as rates and tax changes bite.

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The Commonwealth Bank has lowered its forecast for Australian home prices again. In a housing note published in its newsroom on 4 June 2026, the bank says it now expects national dwelling prices to be flat over 2026.

It is the bank's second downgrade in a month. For Queensland readers the detail that matters is in the city commentary: the bank says Brisbane, Perth and Adelaide are still recording growth, but at a slower pace, while Sydney and Melbourne are the weakest markets and continue to fall.

<figure class="fig"><figcaption><b>One forecast, revised twice in three months</b><span>Commonwealth Bank, national dwelling prices over 2026</span></figcaption>
<ol class="steps">
<li><b>March 2026</b><span>The bank expects national prices to rise about 5% over the year.</span></li>
<li><b>Federal Budget, May 2026</b><span>The forecast is cut to 3% after the Budget's property tax changes.</span></li>
<li><b>4 June 2026</b><span>The forecast is cut again, to no change over 2026.</span></li>
</ol></figure>

## Why the bank changed its view

The note lists several pressures arriving together: higher interest rates, tighter lending conditions and weaker consumer sentiment after the Budget's changes to negative gearing and the capital gains tax discount. The bank sums it up in one line, saying the tax changes "have accelerated a slowdown that was already underway".

It also points to what is happening on the ground. Auction clearance rates are well below their 2025 levels, sales activity has softened and homes are taking longer to sell, the note says. Savings.com.au, reporting the forecast the same day, wrote that the bank's economists see clearance rates at a six-year low.

Price falls have been sharper in high-priced areas, and the examples the bank gives are all in the two largest cities: Sydney's east and north-west, and Melbourne's inner and outer east. No Queensland area appears in that list.

The bank is frank that it was surprised by the speed of the change. Its economists write that the market's reaction to the tax changes has been faster than they expected, and that this raises the risk of a sharper adjustment in the near term. That admission is the reason a forecast made at Budget time in May lasted less than a month.

## Lending, investors and the tax changes

The note is as much about credit as about prices. The bank expects new lending to investors to fall sharply over 2026, to around half the level of late 2025. It forecasts housing credit to owner-occupiers to grow by about 5.5 per cent and credit to investors by about 3.5 per cent.

Those two growth rates describe the whole stock of housing loans, which moves slowly because existing loans are repaid over decades. A halving in new investor lending is therefore compatible with investor credit that still grows a little.

The tax measures themselves are not yet in force. The Budget proposed limiting negative gearing to newly built homes from 1 July 2027 and replacing the 50 per cent capital gains tax discount with a different method, as Cotality set out in its 1 June index report. The market has moved more than a year ahead of that start date.

<div class="callout"><span class="mono">Worth knowing</span><h4>The 5% tax effect is not a forecast for one year</h4>
<p>The bank estimates the tax changes will lower prices by just under 5% over time, and describes that as a one-off adjustment. It is the size of the effect once the market has fully absorbed the new rules, not a predicted fall for 2026 or 2027.</p>
</div>

The bank places the tax changes below the longer-run forces in its ranking. Over time, the note says, interest rates, housing supply and population growth remain the main drivers of home prices. The federal Treasury takes a similar view of scale: ABC News reported on 1 June that Treasury estimates the measures would slow home price growth by 2 per cent over two years.

## What the note says about Brisbane

The June note gives no new figure for Brisbane. It places the city in the group that is still growing, with the pace easing.

That fits the most recent data. Cotality's Home Value Index, published on 1 June, showed Brisbane dwelling values up 0.9 per cent in May and 19.1 per cent over twelve months, while the national index was flat for the month and Sydney and Melbourne fell 0.9 and 0.8 per cent. A national forecast of no change over 2026 is therefore an average of very different markets: falls in the two largest cities, and slower gains in Brisbane, Perth and Adelaide.

The arithmetic matters for Queensland. Sydney and Melbourne hold a large share of the country's housing by value, so their falls weigh heavily on any national figure. A flat national year does not require Brisbane to stop rising. It requires the rises in the mid-sized capitals to be roughly cancelled by the falls in the largest ones.

The bank's earlier view of Brisbane was much stronger. In March, The Nightly reported that the Commonwealth Bank expected Brisbane prices to rise 12 per cent in 2026, after 14.5 per cent in 2025, against 2 per cent for Sydney and 1 per cent for Melbourne. The bank has not published a replacement for the Brisbane figure in its June note, and a 12 per cent rise sat alongside a national forecast of 5 per cent that has since been withdrawn. The March number should now be read as dated.

Not every Brisbane indicator is still pointing up. ABC News reported on 26 May that Brisbane's auction clearance rate for the previous week was 45.7 per cent, the lowest since April 2023. Values rising while fewer auctions clear is the pattern of a market in which sellers have not yet adjusted to more cautious buyers, which is what the bank's "slower pace" describes.

## How other forecasters compare

The Commonwealth Bank is not alone in pulling back, and it is not the most pessimistic voice. The published views differ in what they measure, which makes them hard to line up exactly.

<figure class="fig"><figcaption><b>Published outlooks, late May to early June 2026</b><span>Each forecaster uses its own period and scope</span></figcaption>
<div class="scroll"><table class="tbl">
<thead><tr><th>Forecaster</th><th>Scope</th><th>Outlook</th><th>Reported</th></tr></thead>
<tbody>
<tr><td>Commonwealth Bank</td><td>National, 2026</td><td>No change</td><td>4 June</td></tr>
<tr><td>Westpac</td><td>National, 2026</td><td>+1%</td><td>27 May</td></tr>
<tr><td>AMP</td><td>National, next year</td><td>About -5%</td><td>1 June</td></tr>
<tr><td>SQM Research</td><td>Sydney, 2026</td><td>Up to -9%</td><td>26 May</td></tr>
<tr><td>SQM Research</td><td>Melbourne, 2026</td><td>Up to -7%</td><td>26 May</td></tr>
</tbody>
</table></div>
<p class="src">Sources: Commonwealth Bank newsroom, 4 June 2026; Westpac as reported by Mortgage Professional Australia, 27 May 2026; AMP and SQM Research as reported by ABC News, 1 June and 26 May 2026. Forecasts, not recorded prices.</p></figure>

Westpac's forecast, as Mortgage Professional Australia reported it, also includes a rise of 3 per cent in 2027 and rests on the same two causes: three cash rate rises this year and the Budget's tax changes. SQM Research's stated reason for expecting the largest falls in Sydney and Melbourne, as the ABC reported it, is that those two markets carry the most investor exposure and the thinnest rental yields.

None of the outlooks in the table singles out Brisbane for a fall. The common thread is that the cities with the highest prices and the most investors are expected to adjust first, and that the mid-sized capitals are expected to slow.

## The view beyond 2026

The Commonwealth Bank does not expect the weakness to last indefinitely. Its note says home prices should stabilise and lift in 2027, as lower prices and lower interest rates ease borrowing limits and higher rental yields bring buyers back. Savings.com.au reported the detail behind that sentence: growth of 3 per cent over the year to December 2027, on the assumption that the cash rate stays at 4.35 per cent until early 2027 and is then cut in May and August of that year.

The mention of rental yields has a Queensland edge. Cotality's 1 June report put the gross rental yield in Brisbane at 3.3 per cent across all dwellings, among the lowest of the capitals, and noted that investor mortgage rates are close to 6.3 per cent, which makes a property that pays for itself from rent rare. On the bank's reasoning, yields recover when prices stop rising faster than rents, and in Brisbane, where values rose 19.1 per cent in a year, that has not yet begun.

That part of the outlook rests on interest rates falling, which the Reserve Bank has not signalled. The cash rate stands at 4.35 per cent after rises in February, March and May, the last of them carried by eight votes to one on 5 May. The Reserve Bank's May Statement on Monetary Policy has headline inflation peaking at 4.8 per cent in the middle of 2026, and the Australian Bureau of Statistics put it at 4.2 per cent in April. The Board's next decision is due on 16 June.

A bank forecast is an informed opinion, and this one has moved twice in three months. It is useful for understanding which forces the bank's economists think matter most: rates, lending conditions, tax settings and sentiment. It says little about a particular suburb in Queensland, where the number of homes for sale and the number of buyers competing for them still set the price.

For sellers and agents in Brisbane, the Gold Coast and the Sunshine Coast, the reading is modest. The country's largest lender still sees Queensland's capital on the growing side of the ledger, and it expects that growth to keep slowing through the second half of the year.