Australia Home Prices Post Sharpest Monthly Decline in 3½ Years

Australia’s Cotality Home Value Index fell 0.4% month over month in June 2026, marking the steepest monthly decline in three and a half years. The downturn reflects the fading momentum of the country’s record housing boom as higher borrowing costs weighed on affordability and a tax crackdown on investment properties dampened buyer demand. Among the major capitals, Sydney and Melbourne recorded the largest declines, with home values falling 1.2% and 1.0%, respectively. Growth also lost momentum across the mid-sized capital cities, with Adelaide flat, Brisbane posting a modest 0.3% gain, and Perth rising 0.7%. Despite the monthly setback, Australian home prices remained 7.3% higher than a year earlier in June.

Australia’s Cotality Home Value Index was unchanged in May 2026, after rising 0.3% in the previous month. The latest reading marked the weakest monthly result in a year as the housing cycle continued to lose momentum across most markets. The slowdown had been building for some time and was further reinforced by higher borrowing costs, ongoing geopolitical uncertainty linked to the Middle East conflict, and new tax measures announced in the Federal Budget, all of which have tightened affordability and reduced serviceability for borrowers. Sydney and Melbourne led the downturn, with dwelling values falling 0.9% and 0.8%, respectively, leaving values 2.1% and 2.9% below their cyclical highs reached in November 2025. Elsewhere, home prices continued to rise, albeit at a slower pace. Perth and Darwin recorded the strongest monthly gains at 1.5%, followed by Brisbane and Hobart at 0.9%, while Adelaide advanced 0.5%.

Australia’s CoreLogic Home Value Index rose by 0.3% in April 2026, slowing from a 0.6% increase in March and marking the weakest growth in nearly a year. Higher borrowing costs and the Middle East conflict pushed Sydney and Melbourne into outright declines, with both cities seeing a 0.6% drop as more properties entered the market. The Reserve Bank of Australia has raised interest rates twice this year, in February and March, to 4.1%, reversing two of last year’s three cuts to curb inflation. Other capital cities saw slower but steady growth: Perth prices rose 2.1%, while Brisbane and Adelaide gained 1.1% and 1.2%, respectively, supported by low inventory levels. Demand from first-home buyers continued to drive growth in lower-priced market segments.