21 hotspot suburbs to watch in 2026

It's been another big year for Australia's property market. According to Cotality, housing values have been gaining momentum since the first rate cut back in February. National dwelling values jumped 1.1% in October - the strongest monthly rise since June 2023 - taking annual growth to 6.1%. Cotality notes that the rapid value gains have already offset the boost to borrowing power that earlier rate cuts gave median-income households.

Affordability remains one of the biggest issues facing the housing market, but McGrath Estate Agents CEO and founder John McGrath says supply and construction viability also pose major challenges. Still, he believes there are reasons to be optimistic.

"Housing demand is moderating and expected to stabilise at about 175,000 households annually from 2026. Construction cost growth is slowing. State governments are implementing meaningful planning reforms, and build-to-rent models are expanding supply options," McGrath explains in the 2026 McGrath Report.

In the report, McGrath also reveals his top suburb picks across the country, with a focus on the eastern seaboard. Here's a look at what he has to say about the 21 locations that made the cut.

Sydney and surrounds

Ashbury

This wonderful pocket of the inner west bordering Dulwich Hill is starting to edge up in value, but you can still bag a good buy if you're quick. Decent land allotments. Period homes. Great cafes emerging. It's avoided the radar of the emerging wealthy until now. If you've been priced out of Concord, try this little hybrid suburb on for size. You'll wonder how you missed it until now!

Tennyson Point

"Where the hell is that?" most inner city and north shore buyers shout when I suggest it. Exactly my point ... and the locals like it that way! This little waterfront piece of paradise nestled quietly next to her uber wealthy neighbour Hunters Hill, with little or no fanfare. Take a short drive to check out one of Sydney's more charming waterfront enclaves.

Newport Beach

In California, it's renowned as one of the best addresses in the country. But this surfing village in Sydney is flanked by rolling surf on one side, peaceful Pittwater on the other, and a vibrant retail village in between. Whether you're after a beachside mansion or a cute 1970s two bedder for $800,000, you'll be thanking me in a few years when it's doubled its price.

Sans Souci

Its French translation means "carefree" and that's how you'll feel when you buy in this spot that feels like you're on vacation every day when you get home from work. Part of the great southern suburbs of Sydney, on the water, and only 12 minutes to the airport on a good run, what more could you want? Trust me, you don't have to speak French to be thrilled to call this wonderful little suburb home. Bonnes vacances!

Haberfield

One of our proudest heritage suburbs with its mix of Federation homes, leafy streets and a dash of multicultural village vibe, Haberfield has been one of the inner west's most tightly held pockets for decades and definitely one to watch. Just minutes to the CBD, families are drawn to the 'garden suburb' peppered with traditional Italian eateries and cafes. With so few homes trading hands, demand will always be its strong card.

Norah Head (Central Coast)

Remember when you used to head to the Central Coast for the school holidays? Well, it's now home to the most astute buyers of residential real estate. Some areas have already outpaced most of us, but not this beachside charmer which is still offering great value. Do you swim, surf, fish, bird watch, whale watch? You can do them all from here and still secure your little beachside shack for around a million dollars. And you're only an hour's drive from Sydney's northern suburbs. Can't be true? Well, it is. For a short while anyway until it's on the radar and prices jump to more sensible levels.

Melbourne and surrounds

Northcote

In 2024, Time Out magazine named Northcote's High Street as the world's coolest street. This honour confirmed what locals already knew - that Northcote is an urban delight blessed with cosy bars, great restaurants and abundant public and active transport connections. These features, along with a variety of housing options from apartments to Californian bungalows, are making Northcote increasingly attractive to professionals, creatives, families and investors alike.

Essendon West

Located just 9km from the Melbourne CBD, and with just under a third of its area set aside as open space, Essendon West is a family-friendly suburb on the rise. Known for its strong community, spacious homes and parkland, top schools and excellent transport links, it's becoming more popular with those looking for a calm and convenient lifestyle. And the bonus - it's recorded both strong recent capital growth and its $1.46 million dwelling price sits well below that of neighbouring Essendon.

West Melbourne

Situated just to the north-west of the CBD, with a range of housing options including period terraces alongside modern warehouse conversions, West Melbourne has the right fundamentals for growth. The Metro Tunnel, due to open in late 2025, will place a new rail station just north of the suburb boundary and the West Gate Tunnel will take heavy traffic off local streets. With its ideal location alongside the Victoria Market, and within walking distance of the big smoke, expect big things from this small suburb popular with investors, young professionals and couples.

Box Hill

Around 14km east of the CBD, Box Hill is a cosmopolitan, family-friendly suburb with easy access to schools, parks, shops and a local hospital and TAFE. With a new underground train station to be built by 2035 as part of the Suburban Rail Loop, the suburb is set for a shake-up as it becomes a major housing and transport hub. Expect greater housing demand from students, who will be able to reach Monash University in just 12 minutes.

Carisbrook (Regional Victoria)

It seems it's still possible to strike it rich in Victoria's historic Central Goldfields region. This heritage and tourism hotspot provides a laidback country lifestyle and small-town charm, along with easy access to the major centre of Maryborough, just 7km to the west. And the good news is that the median home is still relatively affordable at $560,000, for those who get in quick.

Brisbane and surrounds

Coorparoo

With its vibrant village atmosphere, excellent connectivity and location close to the Brisbane CBD, Coorparoo continues to show strong potential for capital growth. A blend of classic charm and modern sophistication, its mix of character-filled Queenslanders and sleek architectural homes attracts both families and professionals. The area is well supported by quality schools and a buzzing café scene, all set against leafy, tree-lined streets. Commuters benefit from direct access to major motorways, making travel north or south seamless.

Redcliffe

Located in Brisbane's highly sought-after Moreton Bay region, Redcliffe offers strong investment potential driven by its coastal lifestyle appeal, ongoing infrastructure upgrades, and proximity to Brisbane CBD. Buyers are drawn to its coastal lifestyle, upgraded infrastructure and affordability relative to inner-city suburbs, driving sustained demand and capital growth.

Clear Island Waters (Gold Coast)

This exclusive locale near Mermaid Waters offers premium lakeside living with strong capital growth potential, proximity to elite schools, golf courses and beaches. Tightly held with expansive homes and a FY25 median dwelling value of $1.87 million, Clear Island Waters attracts high-income families seeking lifestyle, privacy and long-term investment security.

Peregian Beach (Sunshine Coast)

Known for its natural beauty, pristine beaches and café culture, it's no wonder Peregian Beach continues to attract strong interest from families and lifestyle lovers. These buyers are drawn to the suburb's laid back coastal character and tight-knit community. Less than half an hour's drive from Noosa with minimal new development, Peregian Beach is well positioned for long term capital growth.

Mackay (North Queensland)

Known as the sugar capital of Australia, Mackay delivers a relaxed coastal lifestyle backed by a robust economy driven by mining, agriculture and tourism. When you add the $9 billion Bruce Highway upgrade and a major project to revitalise Mackay's waterfront, it's easy to see why there is increased demand for property in the region. A modern regional city with a strong sense of community, Mackay boasts a buzzing arts and culture scene, pristine beaches and world-class recreational fishing, making it increasingly attractive to both home buyers and investors.

Tasmania

Battery Point (Hobart)

Despite its heritage charm and waterfront lifestyle, this prestigious suburb is now trading at a discount. Over the year to June 2025, Battery Point's median house price fell 1.4% to $1.38 million amid a rising number of homes coming onto the market. Opportunity abounds in this iconic locality just footsteps from the Salamanca Market and Hobart CBD.

Midway Point (Hobart)

With the $47 million Hobart Airport Interchange complete and the $187 million causeway duplication progressing, Midway Point is becoming one of Hobart's most connected suburbs. What's more, a relatively affordable $615,000 median dwelling price means Midway Point offers strong growth prospects as infrastructure catches up with demand.

West Launceston (Launceston)

Here you'll find exceptional value for those seeking period homes, hillside views and direct access to Cataract Gorge. The suburb has a similar character to East Launceston, yet its $630,000 median home price is $270,000 cheaper than its more high-profile neighbour. Only 2km from the CBD, West Launceston is becoming increasingly popular among buyers wanting a premium lifestyle without the premium price tag.

Miandetta (Devonport)

Miandetta's prospects are set to rise due to its proximity to the newly approved $50 million Stony Rise Village. This development, when completed by Christmas 2026, will have retail, medical and dining facilities. That's not the only thing to like - the Mersey River suburb is also just a 3km commute to Devonport's CBD and bustling waterfront.

Acton (Regional Tasmania)

With a median rental yield of 5.4% and median home prices up 94.9% in five years, Acton is emerging as a standout in Tasmania's property market. Just 3km from Burnie's city centre and busy port, the suburb is drawing investor interest amid strong rental demand fuelled by infrastructure upgrades and clean energy investment. And the clincher? A median house price of just $385,000.