Australian home values fall for sixth straight month as housing downturn deepens
Australian home values fell for a sixth consecutive month in September as higher interest rates, weaker buyer demand and affordability pressures continued to weigh on the property market.
Cotality’s national Home Value Index declined 1.1% in September, taking dwelling values 5.2% below their March 2026 peak.
The downturn has become increasingly broad-based, with every capital city except Darwin recording a fall over the month and 97% of capital city suburbs declining in value over the three months to the end of September.
Brisbane records steepest monthly fall
Brisbane recorded the sharpest monthly decline among the capitals, with home values falling 1.5% in September.
Sydney was close behind with a 1.4% fall, while Melbourne declined 0.7%.
Sydney remains the weakest major market overall, with values now 8.6% below their February peak, slightly worse than the equivalent stage of the city’s 2022-23 downturn.
Melbourne values are 7.2% below their most recent cyclical high and 7.5% below the record level reached in March 2022.
Darwin was the only capital to buck the trend, recording a 0.4% increase in September.
Higher rates hit borrowing capacity
The housing downturn has deepened as the Reserve Bank of Australia continues to tighten monetary policy.
This week’s decision to lift the cash rate to 4.60%, its highest level in around 15 years, is expected to place further pressure on borrowing capacity and buyer confidence.
Higher mortgage rates have already reduced the amount households can borrow, while elevated living costs are limiting the ability of prospective buyers to stretch their budgets.
The effect is increasingly visible in both prices and transaction volumes.
Home sales over the past three months were estimated to be 19.1% lower than a year earlier nationallyand 13.3% below the previous five-year average.
Brisbane recorded the largest fall in sales volumes, down 27.2% from a year ago, followed by Sydney at 26.5% and Perth at 24.2%.
More homes sit on the market
The slowdown in demand has caused available housing stock to accumulate even though fewer owners are listing their properties.
Across the combined capital cities, new listings were 9.2% lower than a year ago, but total advertised inventory was 23.1% higher.
Homes are also taking substantially longer to sell.
The median selling time across the capitals has risen to 39 days from 23 days a year earlier, giving buyers more choice and negotiating power.
Regional markets have remained comparatively resilient, with dwelling values still 5.6% higher over the year, compared with a 1.8% annual decline across the combined capital cities.
National home values are now unchanged from a year ago, but the latest figures show the housing correction is continuing to broaden.
With the RBA tightening again and unemployment edging higher, the September figures suggest Australia’s housing downturn is entering a more difficult phase heading into the final quarter of 2026.
