A new capital city is emerging as the most expensive place in the country for units as Sydney’s strongly held prices begin to slip. 

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Brisbane median unit values are forecast to rise by up to nine per cent to $893,000 in 2027, Domain predictions for for the 2026/27 financial year show. 

It would mean the city finally eclipses Sydney, where the median price is expected to be no higher than $855,000. 

“This is just an example of the shift in the affordability hierarchy across our capital cities,” Domain chief economist Nicola  Powell said. 

Dwelling prices across capital cities are predicted to rise by just 0.1 per cent in 2026/27. (Susie Dodds/AAP PHOTOS)

The Queensland capital has strong investor activity and population growth, which in January pushed entry-level homes into being some of the most expensive in the country. 

A tight rental market has created good conditions for high yield – something investors will be looking for if they are to continue snapping up properties as negative gearing and capital gains tax changes are enacted. 

Units almost always have higher yields than standalone dwellings, given they have a better supply pipeline and are expected to outperform houses in every market.

But yields vary in each city.  

“Brisbane provides more of an opportunity to find something that is positively geared,” Dr Powell said, noting strong capital growth was predicted for the city. 

“If you are going to invest in housing now, you are going to have to chase high-yielding markets.” 

First-timers may welcome limited price growth but Domain’s Nicola Powell says it has its own risk. (PR IMAGE PHOTO)

Combined dwellings prices across capital cities are predicted to rise by just 0.1 per cent in 2026/27, given changes to the nation’s tax settings.

The federal government used the budget in May to announce it would scrap negative gearing on most property purchases from then onwards, though it can still be used for new builds. 

A flat 50 per cent discount on the capital gains tax paid on properties held for more than 12 months is also set to be removed. It will be replaced with an inflation-aligned discount.

The changes will make investing a less attractive option for Australians.

The growth is bolstered by just three markets. Brisbane prices are forecast to rise by 5.5 per cent, Adelaide by 6.0 per cent and Perth by 7.4 per cent. 

Melbourne prices could fall over four per cent, followed by Sydney with over three per cent. (Christopher Hopkins/AAP PHOTOS)

In Sydney, values will likely fall by 3.3 per cent. Melbourne could suffer a 4.4 per cent downturn. 

But the limited growth may not be the welcome reprieve for first home buyers that the government has suggested. 

“That’s challenging for a first home buyer because you don’t want to be buying with the prospect of further price falls, and then be pushing yourself into negative equity,” Dr Powell said. 

Lower investor activity might knock out competition for first home buyers, though affordability was unlikely to shift drastically enough to benefit them in real terms. 

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