KPMG outlook points to a slower, uneven housing market

KPMG’s latest residential property market outlook points to a housing market that is likely to remain uneven rather than move in a straight line. The broad message is one of caution: affordability pressures, supply constraints and borrowing conditions continue to shape the market, but the balance of those forces can differ sharply between locations and property types.

For Australian buyers, sellers and renters, that means the next phase of the market may be less about a single national trend and more about local conditions. KPMG’s outlook, published in August 2025, sits within a wider debate about how long housing stress can persist and how quickly supply can respond.

A market shaped by competing pressures

The KPMG outlook highlights the interaction between demand, supply and financing conditions as central to the residential market. That combination has made the outlook harder to read than in periods when one factor clearly dominated.

Affordability remains a key constraint, while available stock and the pace of new supply continue to influence how much competition buyers face. In some markets, those pressures can support prices; in others, they can slow activity if households are stretched by borrowing costs or higher living expenses.

Why affordability remains central

Housing affordability is still one of the strongest themes in Australian property reporting, and KPMG’s outlook places it near the centre of the discussion. When prices, rents and borrowing costs all sit under pressure, households have fewer options and are often forced to adjust expectations about location, dwelling type or timing.

That does not produce the same result everywhere. Inner-city markets, family suburbs and regional centres can each respond differently depending on local incomes, stock levels and the mix of buyers and renters competing for homes.

Supply is still a critical question

One of the clearest takeaways from the outlook is that supply remains a major issue. Even when demand softens, a shortage of suitable homes can keep conditions tight. Where supply is limited, buyers may still face competition and renters may continue to encounter low vacancy.

At the same time, the outlook suggests the market is not simply moving in one direction. New supply, if it arrives in the right places and at the right price points, can ease pressure in some segments while leaving others tight. That makes the timing and location of new housing especially important.

Borrowing conditions continue to matter

Mortgage conditions remain part of the broader picture. Even without a single dominant national trend, the cost and availability of finance can influence how many buyers are active at any given time. That affects auction depth, private treaty negotiations and the pace at which homes change hands.

KPMG’s outlook does not suggest a simple answer to whether borrowing conditions will help or hinder the market overall. Instead, it reinforces the idea that finance settings interact with supply and affordability in ways that can differ from one market to another.

What this means for buyers, sellers and renters

For buyers, the outlook suggests caution and selectivity may remain important, particularly in markets where affordability is stretched. For sellers, conditions may still be favourable in tightly supplied areas, but results are likely to vary by suburb, price bracket and property type.

For renters, the broader message is that tight supply can continue to support pressure in some markets, although the degree of strain may not be uniform across the country. These are broad market implications only, and individual outcomes will depend on local conditions.

Regional and city markets may diverge

One of the most important features of the current housing conversation is the possibility of divergence between capital cities and regional markets. The KPMG outlook does not reduce the market to a single national story, and that is significant because housing conditions often move differently across states and regions.

Some areas may continue to see stronger competition because of limited stock or relative affordability compared with larger capitals. Others may cool if buyers become more cautious or if supply improves. The result is a market where headlines can look mixed, even when the underlying pressures are similar.

Uncertainty remains part of the outlook

There is still uncertainty around how quickly the housing market can rebalance. The supplied source does not set out a single forecast for every segment, and that matters because the market is being pulled in different directions at once. Affordability can suppress demand, while supply shortages can keep conditions tight.

That tension helps explain why property commentary often appears contradictory. One report may point to easing momentum, while another highlights persistent shortages or strong competition. Both can be true in different parts of the market at the same time.

For now, KPMG’s residential property outlook reinforces a familiar but important message: Australia’s housing market is still being shaped by affordability, supply and finance, and the effects are likely to remain uneven across the country.