KPMG Just Downgraded Its Own Forecast. Here's What Actually Changed.

KPMG has revised its own residential outlook, and the direction of the revision matters more than the headline number. National house values are now forecast to fall 1.1 per cent across 2026, a downgrade from the firm's earlier call, while unit prices are still expected to rise 2.2 per cent.

The unit and house numbers moving in opposite directions is the more interesting story here. It points to a market where affordability pressure is doing more to shape outcomes than any single interest rate decision. Buyers priced out of houses are landing in units rather than leaving the market altogether, which is a very different signal to broad based buyer withdrawal.

KPMG's own 2027 forecast has both segments turning positive again, houses up 3.4 per cent, units up 3.7 per cent, which frames 2026 as a correction agents need to manage through rather than a structural reset to plan around long term. For principals fielding vendor questions about timing, that distinction, correction versus reset, is worth having ready before the conversation starts, not during it.

A downgrade is not a crash. Vendors asking which one this is deserve a straight answer, not a sales pitch.