Australian residential property prices have slipped for a seventh straight month, marking the steepest fall in four decades as mortgage costs rise and buyer confidence wanes.
National price decline accelerates
The Cotality Home Value Index released on November 2 recorded a 1.2 per cent drop in national dwelling values for October, extending the slide to seven months.
Since their March peak, median home values are down 6.7 per cent, an estimated loss of $63,400 per dwelling.
Across the eight capital cities, the combined index fell 8.1 per cent over the same period, edging toward the previous record of 8.2 per cent set in the 2017-19 correction.
Gerard Burg, Cotality’s head of research, warned that the market is undergoing an unusually sharp reversal, with further falls likely if interest rates stay high.
Regional variations emerge
In October, Brisbane posted the steepest monthly slide at 2 per cent, followed by Perth at 1.7 per cent and Sydney at 1.6 per cent.
Both Brisbane and Perth had enjoyed strong price gains during the prior boom, yet current figures remain above those from a year earlier, suggesting the growth phase is ending.
Sydney has seen a 4.7 per cent decline over the past three months, while Melbourne values sit 7.3 per cent below their level five years ago.
These shifts indicate that the correction is no longer confined to the traditionally expensive markets, but is spreading nationwide.
Read Also: South-East Governors Back Tinubu’s Re-election Bid
For prospective purchasers, falling prices may eventually create opportunities. For existing homeowners, particularly those who bought recently or borrowed heavily, the adjustment could prove painful.
Demand squeezes under higher rates
Four interest-rate hikes this year have trimmed borrowing capacity and lifted mortgage repayments, tightening household budgets.
Tim Lawless, Cotality’s research director, said affordability pressures were already building before the rate increases, and recent budget measures have added to the strain.
Home-sale activity over the last three months is estimated to be 23 per cent lower than a year ago and 18 per cent beneath the five-year average.
Auction clearance rates in the capitals have consistently fallen below 50 per cent, with the median time on market rising to 39 days and vendor discounts hitting their highest level since May 2019.
Although new listings remain about 18 per cent below average, the total advertised stock has climbed to its highest seasonal level since 2019, giving buyers more options but many remain hesitant.
Outlook remains uncertain
Cotality projects subdued market conditions through the remainder of 2026 and into 2027, with the depth of any further decline tied to interest rates, employment trends, and consumer confidence.
The nation’s chronic housing shortage offers some floor-support for values, yet limited supply cannot fully counteract the erosion of purchasing power.
With the previous record correction now within reach, the coming months will reveal whether Australia’s housing market experiences its most pronounced decline in forty years.
Leave a Reply