Australia's housing downturn intensified in September, with national values retreating to about last year's levels as buyers pulled back. Among major cities, Brisbane posted the steepest monthly fall at 1.5%, just ahead of Sydney at 1.4%, while the combined capitals index slid 1.2%.
Cotality's Home Value Index shows Sydney prices are now almost 9% below their February high, and the median price in the nation's largest city sits at roughly A$1.2 million ($840,000). The providers noted the figures could be revised.
Higher borrowing costs and investor-focused tax tweaks in the May budget have squeezed demand. After pausing for two meetings, the Reserve Bank restarted hikes this week and, over 2026, has taken the benchmark rate up by a total of 1 percentage point to a 15-year high.
"97% of capital city suburbs were down in value over the three months to end of September, highlighting the broadbased scope of this negative housing cycle," Tim Lawless, research director at Cotality, said. "The lift in available stock is improving choice for buyers, but ironically, many prospective buyers don't have the confidence or financial capacity to buy at the moment."
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Homes across the capitals now take a median 39 days to sell versus 23 days a year ago, which is causing listings to pile up. Cotality expects values to keep drifting lower into 2027 as higher rates bite, though tight housing supply and a still-resilient labor market should help prevent a severe crash.
"Borrowers are not only facing higher mortgage costs, but also an extended period of elevated living expenses and negative real income growth," Lawless said. "Together, these pressures are narrowing the pool of buyers able to qualify for a mortgage and reducing the amount they can afford to pay."
For renters, there's a small silver lining: the national vacancy rate ticked up to 2% in September, the highest since January 2025.
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