Housing Fever

Australia

March 2026 shows a growing divergence in Australian capital city housing markets. Brisbane, Adelaide, and Perth are leading a steep upswing in prices, with Darwin also showing a sharp acceleration in recent months. Hobart continues to experience steady growth. In contrast, Canberra and Sydney are plateauing, while Melbourne has begun to show slight price declines.

Price-to-rent ratios, which focus on the relationship between prices and rental fundamentals, point to intensifying valuation pressure in Brisbane, Adelaide, Perth, and Darwin. Hobart’s ratio is also continuing its upward trend. Canberra and Sydney remain broadly flat, while Melbourne is now visibly declining, indicating that rental growth is outpacing price growth in that market.

The fever index paints a sharper and more differentiated picture. In addition to rents, the index incorporates interest rates and housing supply, capturing speculative intensity. Viewed through this broader lens, the market splits into three distinct groups:

• Extreme and surging speculative pressure: Adelaide (which has spiked drastically), Brisbane, Perth, and Hobart.
• Moderate pressure: Darwin, Canberra, and the national average (AU).
• Low or declining pressure: Sydney (stable/flat) and Melbourne (declining sharply).

Comparison of these measures highlights an important distinction. While Darwin shows a sharply rising price-to-rent ratio, it exhibits only moderate speculative pressure once financing and housing supply factors are taken into account. Conversely, Adelaide, Brisbane, Perth, and Hobart display aggressively consistent upward signals across both metrics, confirming that price growth in these markets is heavily driven by speculative dynamics rather than fundamentals alone.

Overall, the combined evidence indicates that the nationwide aggregate masks a highly fragmented landscape. Speculative risk is intensely concentrated in a handful of capitals (most notably Adelaide, Brisbane, and Perth). Meanwhile, Sydney remains relatively balanced, and Melbourne is now exhibiting a pronounced cooling trend across all metrics, reflecting a complete departure from the speculative pressures seen elsewhere in the country.

New Zealand

The New Zealand housing market remains stable following the sharp correction in 2022. As in previous quarters, both national and regional price-to-rent ratios remain broadly unchanged through the March 2026 quarter, indicating a continued equilibrium between housing prices and rental income.

In contrast, the fever index, which incorporates interest rates and housing supply conditions in addition to rents, continues to reveal meaningful regional divergence, though with a notable shift this quarter. The sharp upward momentum previously observed in Wellington has abruptly broken, with the index recording a steep drop in Q1 2026, suggesting a sudden easing of speculative pressure. Meanwhile, the long-term decline observed in Otago since 2022 has fully flattened out, with the region’s index now stabilizing at a low baseline. Most other regions remain clustered around or slightly below the national average with only minor fluctuations.

Australia

December 2025 found housing prices rising across all Australian capitals but at markedly different speeds. Brisbane, Adelaide, Perth, and Hobart lead the upswing, while Canberra, Melbourne, and Darwin show more subdued growth.

Price-to-rent ratios, which focus on the relationship between prices and rental fundamentals, point to renewed valuation pressure in Brisbane, Adelaide, Perth, Hobart, and Darwin. Canberra and Sydney show only gradual increases, while Melbourne remains broadly flat, indicating a closer alignment between prices and rents.

The fever index paints a sharper and more differentiated picture. In addition to rents, the index incorporates interest rates and housing supply, capturing speculative intensity. Viewed through this broader lens, three distinct groups emerge:

• Elevated and rising speculative pressure: Adelaide, Brisbane, Perth, and Hobart
• Moderate pressure: Darwin and Canberra
• Low and stable pressure: Sydney and Melbourne

Comparison of these two measures highlights an important distinction. Some cities with rising price-to-rent ratios (notably Darwin) exhibit only moderate speculative pressure once financing and housing supply factors are taken into account. Conversely, Adelaide, Brisbane, Perth, and Hobart display consistent signals across both metrics, suggesting that price growth in these markets is increasingly driven by speculative dynamics rather than fundamentals alone.

Overall, the combined evidence indicates that although prices are increasing nationwide, speculative risk remains highly concentrated, with Sydney and Melbourne continuing to appear relatively balanced once macroeconomic conditions are accounted for.

New Zealand

The New Zealand housing market remains stable following the sharp correction in 2022. As in the previous quarter, both national and regional price-to-rent ratios remain broadly unchanged, indicating a continued equilibrium between housing prices and rental income.

In contrast, the fever index, which incorporates interest rates and housing supply conditions in addition to rents, continues to reveal meaningful regional divergence. Consistent with last quarter, speculative pressure is rising in Wellington while somewhat easing in Otago. In particular, over the December quarter the ongoing decline observed in Otago since 2022 appears to be moderating, whereas the upward momentum observed in Wellington has persisted.

Australia

The Australian housing market maintained upward momentum into mid-2025, though regional patterns diverged. Sydney and Darwin prices have resumed growth after a short period of consolidation, while Perth, Adelaide, and Brisbane continue to accelerate more sharply. Hobart remains below its 2022 peak, showing a gradual recovery, and Melbourne remains largely flat. Overall, national prices have risen steadily since late 2022.

Price-to-rent ratios show moderate increases in Adelaide, Brisbane, and Perth, with milder rises in Darwin and Hobart. In other capitals, ratios are largely unchanged, indicating that rents and prices have been moving broadly in tandem.

The fever index points to persistent overheating pressures in several mid-tier markets. Adelaide, Brisbane, Perth, and Hobart all exhibit clear upward trajectories in speculative intensity, surpassing their 2021-22 levels. In contrast, Sydney and Melbourne remain comparatively subdued, reflecting more balanced underlying fundamentals.

New Zealand

The New Zealand housing market has stabilized following the sharp correction of 2022. Both national and regional price-to-rent ratios have remained steady, suggesting a broad equilibrium between housing prices and rental income.

At the same time, the fever index reveals regional divergence. Wellington’s index has risen notably, signalling mounting speculative pressure, and Otago continues to trend downward. Other regions, including Auckland, Canterbury, and Waikato, show limited movement, which is consistent with a contained market environment in those regions.