Major Investment Bank Reveals What’s Coming for Australian Property
By: Niro Thambipillay
May 12, 2026
Barrenjoey, one of Australia’s major investment banks, has just predicted that housing turnover will fall 17% this year — meaning significantly fewer properties will change hands. But the real story isn’t about falling sales volumes. It’s about what happens to supply in a market that’s already short roughly 200,000 homes. In this video, I break down Barrenjoey’s prediction, whether the data backs it up, and why rising interest rates are likely to make the supply crisis even worse — not better.
TL;DR
The Australian property market is heading for a supply crunch, not a crash. Barrenjoey predicts housing turnover will fall 17% this year as sellers withdraw and buyers hesitate, but in supply-constrained cities like Perth, Brisbane, and Adelaide, this means fewer properties to buy, not lower prices. Australia already has a nationwide shortage of approximately 200,000 homes, and construction is running 13.5% below the government’s target of 240,000 dwellings per year. Rising interest rates are making both problems worse: sellers are delaying, and builders are going broke. Below: full breakdown, city-by-city data, and FAQ.
Key Takeaways
- Turnover falling: Barrenjoey predicts a 17% drop in housing transactions this year as uncertainty causes sellers and buyers to pull back.
- Listings in freefall: Perth listings have collapsed over 50% from their 2018–19 peak; Brisbane and Adelaide have roughly halved.
- Price growth where supply is tightest: Perth +26%, Brisbane +19.7%, Adelaide +12.2% over the last 12 months.
- 200,000-home shortage: Australia’s structural deficit is growing, not shrinking, with population growth outpacing construction.
- Construction falling behind: Dwelling approvals at 17,300/month vs. the 20,000/month needed, 13.5% below target, worsening with each rate rise.
- Rates at 4.35%: The RBA signals rates could reach 4.7% by year-end, squeezing both sellers and builders further.
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How Many Properties Are Actually for Sale Right Now?
Data from SQM Research shows total properties listed for sale across Australia going back to 2010. The long-term trend is a clear decline. We peaked at over 350,000 listings in the early 2010s, saw a sharp drop post-COVID in 2021, and now sit at around 220,000 to 230,000. That’s roughly a 30–35% decrease in available stock nationally.
So when Barrenjoey predicts turnover will fall further, it’s not as if we’re starting from a position of abundance. We already have a housing crisis because there aren’t enough properties for everyone who wants one. And the situation is about to get tighter.
City-by-City: Where the Supply Crunch Is Worst
The picture varies dramatically depending on which city you look at.
Melbourne and Sydney: Flat Supply, Flat Prices
In Melbourne and Sydney, listings have been relatively flat over recent years, and price growth has reflected that, with little movement and choppy results. Because supply levels have stayed relatively consistent, these cities are the most exposed when rates rise. Buyers pull back, but so do sellers, and the supply-demand gap shrinks rather than widens.
Perth, Brisbane, and Adelaide: Supply Has Collapsed
The story is completely different in Perth, Brisbane, and Adelaide. Perth peaked at around 28,000 properties for sale in 2018–2019. Today, it sits at roughly 13,000, a decline of more than 50%. Brisbane has gone from around 30,000 listings to about 13,000–14,000. Adelaide has dropped from 18,000 to about 8,000.
These are also the three capital cities running the hottest right now. Perth is up 26% over the last 12 months, Brisbane up 19.7%, Adelaide up 12.2%. That’s not a coincidence. Prices are rising because there are fewer and fewer properties for sale while populations continue to grow. Simple supply and demand.
“But If People Can’t Afford Property, Prices Have to Fall” — Why This Logic Is Wrong
This is one of the most common arguments for a property crash, and it misunderstands how supply-constrained markets actually work.
According to AMP, Australia currently has a nationwide shortage of approximately 200,000 homes, because population growth has been running well ahead of new construction for years. That shortage is getting bigger almost every month.
Here’s a simple way to think about it: imagine 10 people looking to buy a property in a particular area, but only six properties are available. It doesn’t matter that all 10 can’t afford the price, six of them can. Those six get the properties, the other four miss out. That’s the reality of a supply collapse. What matters isn’t whether the average person can afford to buy. What matters is whether enough buyers exist who can afford the prices being asked. In the cities where supply is tightest, there are more than enough.
How Rising Interest Rates Make the Supply Crisis Worse, Not Better
With the cash rate at 4.35% after three consecutive rises this year, back to the same levels as 2023 before cuts began, and the RBA signalling rates could reach 4.7% by year-end, the impact on supply runs in two directions. Both of them make the situation worse.
Existing Supply: Sellers Pull Back
Higher rates spook sellers. Real estate agents are already reporting that sellers are delaying their decision to list. As rates rise further, more sellers think: “I’ll just wait for a better time.” That means fewer listings, fewer transactions, exactly what Barrenjoey predicted. Rising rates are the trigger that makes it happen.
New Construction: The Pipeline Is Falling Behind
The latest ABS data shows Australia approved 17,300 dwellings in March. To hit the federal government’s target of 1.2 million homes over five years, we need 20,000 approvals per month, or 240,000 per year. We’re currently running 13.5% below that target, and that was before the latest rate rise.
When rates go up, the cost of borrowing to fund construction projects rises, and buyers’ ability to pay for finished properties falls. Projects that were barely viable at lower rates suddenly don’t stack up. We’re already seeing the consequences: builders going broke, construction companies calling in administrators, and new projects stalling. Higher rates only accelerate this trend.
Putting It All Together: What This Means for Property Investors
When you stack up all the data, it points in one direction:
- Existing properties for sale are already in decline nationally
- Barrenjoey predicts that decline gets worse as rates stay high
- New construction is running 13.5% below the government’s own target
- After the latest rate rise, construction is likely to fall further behind
- Australia already has a shortage of approximately 200,000 homes
All of these forces are compounding at the same time. The supply situation is not going to improve, the data says it’s going to get worse. That doesn’t mean you should panic buy. But it does mean that waiting for the situation to improve is waiting for something the data says isn’t coming.
Summary
- Barrenjoey predicts Australian housing turnover will fall 17% this year as uncertainty causes sellers and buyers to pull back
- National property listings have declined roughly 30–35% from their early-2010s peak, with Perth, Brisbane, and Adelaide seeing declines of 50% or more
- Perth (+26%), Brisbane (+19.7%), and Adelaide (+12.2%) are the fastest-growing capitals, driven by collapsing supply, not speculation
- Sydney and Melbourne, with relatively flat supply levels, are more exposed to rate-driven slowdowns
- Australia has a structural shortage of approximately 200,000 homes that is growing, not shrinking
- New dwelling approvals are running 13.5% below the government’s 240,000/year target, and rising rates will push that further behind
- The affordability argument misunderstands supply-constrained markets: enough buyers exist in tight markets to absorb available stock at current prices
Frequently Asked Questions
The data suggests the supply situation is getting worse, not better. Australia’s 200,000 home shortage is growing, construction is falling behind targets, and listings continue to decline. While timing any market perfectly is impossible, waiting for conditions to improve is waiting for something the current data does not support. Location selection is critical — the market is performing very differently across regions.
Perth, Brisbane, and Adelaide have the most constrained supply. Perth’s listings have fallen more than 50% from their 2018–2019 peak. Brisbane has roughly halved from 30,000 to about 13,000–14,000 listings, and Adelaide has dropped from 18,000 to around 8,000. These cities are also seeing the strongest price growth nationally.
Rising rates impact property markets in two ways. First, they cause existing sellers to delay listing, reducing the number of properties available to buy. Second, they increase construction costs and reduce buyer purchasing power, causing new development projects to stall or become unviable. Both effects reduce supply, which in supply-constrained markets can actually support prices rather than push them down.
Barrenjoey, a major Australian investment bank, predicted that housing turnover will fall 17% this year. Their economists also noted that mid-size capitals like Perth, Brisbane, and Adelaide are unlikely to see significant price declines due to extremely tight supply conditions.
Based on current data, a broad property crash is unlikely. Australia has a structural shortage of approximately 200,000 homes, listings are declining, and new construction is running well below targets. While Sydney and Melbourne may see flat or choppy price movement, the supply-constrained cities of Perth, Brisbane, and Adelaide are expected to continue growing.
About the Author
Niro Thambipillay
Niro is the founder of Investment Rise, one of Australia’s most trusted property buyers agencies. He has helped hundreds of first-time investors build property portfolios and was voted one of the most trusted Real Estate entrepreneurs in the Asia Pacific region (APAC 2022). Niro is also the author of “How to Build a Property Portfolio That Pays You an Income Every Month.”
