Why SEQ Stands Tall (and Why We’re Not in Recession Territory - Yet)

Two questions I’m getting more than ever right now:

“What’s the property market going to do next year?”

“Are we heading into a recession?”

Let’s tackle both — because they’re more linked than most realise.

Recession? Technically, no. But the warning lights are on.

A recession, by definition, means two consecutive quarters of negative GDP. As it stands, that’s not the base case. Treasury, the RBA, and most major institutions see modest growth of 1.8% to 2.3% through fiscal 2026. Not spectacular, but not backwards either.

Unemployment? Likely to hover around 4.5% — not ideal, but still within the “full employment” range. I’ve got my doubts about the accuracy of ABS employment figures, but the broader outlook shows limited change in job numbers over the next 12 months.

So no, we’re not in a recession. But that doesn’t mean we’re in the clear.

So what could tip us into recession?

It wouldn’t take much. A sharp global event. Rising fiscal drag. A financial system wobble. Or a housing crash (unlikely, but not impossible). More on that below — but the key message? We’re walking a narrow path. Fiscal 2026 will likely hold steady, but there’s more risk building into 2027 and beyond.

Housing market? Still moving — just not roaring.

Here’s the short version for property in 2025/26:

Slow growth, patchy performance, but generally upward — especially in SEQ.

National dwelling prices are tipped to rise 3% to 6%. But attached dwellings — think townhouses, terraces, duplexes — could do better, growing at 5% to 7% in many areas. Why? They’re more affordable and better located than detached homes. And people are compromising on space for location and price.

SEQ: The star with a split personality

Let’s get local.

South East Queensland — including the Gold Coast, Brisbane, Sunshine Coast, Toowoomba and surrounds — remains one of the most resilient and in-demand regions nationally. But the market here isn’t one-size-fits-all.

Detached suburban homes: Expect 3% to 5% growth.

Well-located attached dwellings: Could hit 7% to 9%, especially along transport corridors or in areas seeing more density and walkability.

Population growth is strong, infrastructure spend continues, and SEQ is still the destination of choice for interstate migrants. Add in affordability (compared to Sydney and Melbourne), and you’ve got a sturdy foundation.

What’s driving this market?

Let’s keep it simple. The market is being held up — not lifted — by a few key forces:

• Interest rates are easing.
  The RBA is expected to cut another 75–125bps over the next year. By mid-2026, the cash rate may sit around 2.6%–3.1%. This helps buyers re-enter, particularly first-timers and upgraders.
• We’re undersupplied.
  We need to build 250,000 homes per year. We’re doing about 180,000. That’s a growing shortfall, and it’s structural — labour shortages, approval delays, rising costs, the lot.
• Migration is booming.
  Net migration won’t drop below 350,000 annually anytime soon — and more likely sits around 400,000–450,000 for the foreseeable future. That’s a lot of extra bums needing roofs.
• Policy support exists — barely.
  Government initiatives like Help to Buy and the Housing Australia Future Fund will help a bit — but they’re token gestures at best. In reality, they often distort things more than they help.
• Affordability and credit access are still a mess.
  Banks remain cautious. APRA continues to penalise alternative tenures (like land lease) which could relieve pressure on affordability. And households are stretched to the max on mortgage repayments and rent.

Could it all unravel? Maybe. But not yet.

I won’t sugarcoat it. The risk of recession grows by the year. Not now — but we’re inching closer. If the government doesn’t get serious on productivity, debt, and regulatory reform, we’ll hit a wall. Fast.

We need:

• Fewer vanity projects.
• More infrastructure that unlocks land.
• Serious tax reform.
• Better planning systems.
• And for the love of all things practical — sensible housing policy.

Final take: It’s no boom, but it’s not bust either.

SEQ will remain a standout performer in 2026, especially in the attached dwelling space. Interest rate cuts will provide a tailwind. Population growth will support demand. And undersupply will keep a floor under prices.

But this isn’t 2021. It’s a mature market phase.

The highs are behind us — but so are the worst fears.

Growth ahead. Steady. Predictable. And — for mine — still worth backing.