Market Commentary March 2026
The Australian economy is in a delicate transitional phase, with growth picking up, but inflationary pressures dictating a cautious monetary policy approach.
Australian Economic Overview
| 2.6% |
Economic GrowthAs of December 2025, Annual economic growth was 2.6%, reflecting an increase in government expenditure (0.9%) and house hold consumption (0.3%). |
⬆ |
| 4.1% |
Labour MarketLabour market conditions remain tight, with the unemployment rate holding steady at 4.1% in January. Despite rising slightly to 5.9%, the underemployment rate was still lower than a year ago. |
➡ |
| 3.8% |
Inflation & WagesInflation picked up in late 2025, with headline CPI at 3.8% and underlying inflation at 3.4%, leading the RBA to tighten in March 2026. |
⬆ |
| 4.1% |
Cash RateSpending was 4.6% year on year as of January 2026, boosting GPD, however expected to ease off with the increased cash rate now at 4.10%. |
⬆ |
| Increase |
Housing FinanceThe number of new loan commitments for dwellings rose 5.1% from the September quarter to the December quarter. Reflecting the impact of the 5% Deposit Scheme for first-home buyers. |
⬆ |
| Stable |
Labour ProductivityLabour market conditions remain tight, with the unemployment rate holding steady at 4.1% in January. Despite rising slightly to 5.9%, the underemployment rate was still lower than a year ago. |
➡ |
Source: API, March 2026 Update
Cash Rate
In the March 2026 meeting, the Board judged that inflation is likely to remain above target for some time and that the risks have tilted further to the upside, including to inflation expectations. It was therefore appropriate to increase the cash rate target.
Market Drivers & Challenges
Economic Drivers
- Consumption
- Investment
- Exports
Growth Sectors
- Renewable Energy
- Healthcare
- Technology
- Construction
- Tourism
- Education
Declining Sectors
- Coal and Traditional Fossil Fuel Mining
Challenges
- Inflationary Pressures and Housing
- Rising Unemployment
- Global Trade Uncertainty
National Trends
Commercial
According to Real Capital Analytics (MSCI), Australia’s broader deal volume surged by close to 75% YOY in the third quarter. Deal activity increased across major property types except for office, where the recovery has stalled. Recovery can also be attributed to the return of cross-border capital. Net capital inflows by overseas investors were flat for the majority of 2023-24 before soaring to over circa $5b year to date, courtesy of some major portfolio acquisitions across industrial, living and data centre sectors.
Brisbane was Australia's top-performing commercial market in late 2025, with transaction volumes. As of February 2026, Industrial demand continues to outstrip supply in most precincts. Retail activity increases in the 2nd Half of 2025. The office market is demonstrating increased rentals during a “flight to quality” with a performance gap between prime and secondary assets. However, it is also noted that a lack of future projects is expected to impact demand in 2026.
Superannuaction Changes
A Bill for proposed Tax Legislation was passed in Parliament in March 2026 and is now set to be implemented as Legislation effective as of 1 July 2026. This Treasury Laws Amendment (Building a Stronger and Fairer Super System) Bill 2026 proposes a new tax on superannuation balances exceeding $3 million to reduce concessions for high-balance individuals. It also aligns the Low-Income Superannuation Tax Offset (LISTO) with income tax thresholds and introduces consequential amendments across nine different Acts. Source: https://www.aph.gov.au
Due to the change of tax rates associated with the Amendment, these changes are expected to directly impace Self-Managed Super Investors with qualifying balances, resulting in potential changes to ownership structures and investmen feasibilities.
Residential
The Australian residential market entered 2026 with a "two-speed" dynamic, as national values rose 0.8% in January to an annual growth rate of 10.2%. While the RBA’s February hike to 3.85% is expected to moderate demand, chronic supply shortages—with listings 25% below the five-year average—continue to provide a firm floor for prices. Growth is increasingly concentrated in the affordable unit segment and smaller capitals, as Sydney and Melbourne soften under higher borrowing costs. Brisbane and SEQ remain the national frontrunners, driven by Australia's highest interstate migration and an acute supply deficit. Brisbane house prices are forecast to grow by 10.9% in 2026, supported by a massive $116.8 billion infrastructure pipeline. With vacancy rates remaining near record lows and the market projected to fall 262,000 homes short of national targets, the outlook remains skewed toward sustained capital appreciation and rental growth throughout the year. This continues to influence demand for professional property valuations.
Make informed property decisions in a changing market.
Speak with our team for a professional property valuation or strategic advice.
For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute legal, financial, or professional advice. While we strive for accuracy, we make no guarantees regarding the completeness or timeliness of the content. Always seek independent advice before making any financial or real estate decisions. We are not liable for any loss or damages arising from your reliance on the information provided.
Liability Limited by a Scheme approved under Professional Standards Legislation