Australian house prices fall as downturn spreads; Brisbane drops after 40-month streak
House prices have declined across most of Australia since May, with Brisbane ending a historic 40-month run, according to Cotality data, as higher interest rates, the US-Iran conflict and tax changes cool demand.
Fresh Cotality figures released on Monday show home prices have fallen across most of Australia since May, with Brisbane, Adelaide and Perth all sliding. Brisbane’s median price has dropped by about A$8,000 since May, returning to its March level of A$1.1m after a historic 40 consecutive months of increases that began in February 2023.
Adelaide and Perth median prices have each fallen roughly A$4,000 from record highs set in May, to A$944,000 and A$1.03m respectively. In June, home values across regional Australia fell overall for the first time since January 2023, and in July they either fell or stayed flat in every state.
Nationally, the median home price now stands at A$928,000, about A$19,000 below its March peak. Sydney, Melbourne and Canberra have seen median prices drop by A$69,000, A$39,000 and A$22,000 respectively since February. Even so, prices in Sydney and Melbourne remain above their January 2025 levels, and Canberra’s are higher than in September 2025.
The Reserve Bank of Australia has reported that fewer than 1% of borrowers have fallen into negative equity, where the home is worth less than the loan, and an even smaller share are unable to keep up repayments. The slowdown began in February, when the RBA started raising interest rates and the US war on Iran broke out. Housing demand weakened further after the May federal budget cut tax concessions for property investors. NAB said on Thursday that home loan applications fell 15% from the first quarter of 2026 to the three months to June, while Westpac, Equifax and Loan Market separately reported lower mortgage demand.
RBA governor Michele Bullock, speaking at an Anika Foundation lunch on Wednesday, said she was surprised by the slump in prices and demand since May. She described interest rates as only “a bit” restrictive and attributed the slide to falling buyer demand. “I expect that things will settle down,” Bullock said. “People will get used to the new rules. Hopefully the conflict overseas will die down, and they’ll get a bit more confidence. Prices might lower a bit. People might feel more confident to come back into the market.”
Early signs of adjustment are emerging. Auction clearance rates edged up from a June low of 47.4% to 53.6% over the weekend, according to Cotality’s preliminary data. The company also said new listings declined in July as sellers held off. The RBA is not expected to raise rates at its board meeting on 11 August.
