House prices in two major cities to surge by over $50,000 this year, say Canstar

House prices in two major cities are set to balloon this year, as cash rate hikes also eat away at people’s mortage borrowing power.

Median house prices in Perth and Brisbane are set to climb by more than $50,000 by the end of the year according to Canstar as the two major cities defy the 2026 rate hikes.

They are predicted to deliver the strongest gains, jumping by 12.3 per cent in Perth and 9.7 per cent in Brisbane.

For Perth this means the current median price would rise from $51,569 to $1.11 million, with Brisbane property prices jumping from $54,919 to $1.26 million.

“Both of these markets are hurtling towards prices that are fast becoming unaffordable for people looking for four walls and a patch of grass,” data insights director at Canstar Sally Tindall said.

Elsewhere, in Sydney and Melbourne, the country’s two largest capital cities, the property market are projected drop.

Sydney’s median house price is expected to fall by $2,139, with Melbourne stumbling by $7,829.

For Sydney this is a 0.6 per cent drop from the start of the year for houses, according to Canstar.

While the drop in thousands may seem like good news for those wanting to get into the property market, recent and expected cash rate hikes this year have dramatically affected Aussies borrowing power.

According to Canstar analysis, a single Australian earning the average full-time wage could potentally have their borrowing power by cut $25,000 after the February and March rate hikes.

However, with three more 0.25 cash rate hikes predicted this year by Westpac, this could drop to $58,700.

Ms Tindall added: “The danger is, people will borrow to the limit, banking on prices continuing to climb. If circumstances change – whether that’s interest rates, job security or the economy – it could leave some households overexposed.”