Australia’s housing downturn deepened in October, with national home prices falling for a seventh consecutive month and capital-city values declining at their fastest pace in four decades.
Figures released on Monday by property data firm Cotality showed national home prices fell 1.2% in October from September, when they dropped by a downwardly revised 1.3%. Values are now 6.7% below their peak and 2.8% lower than a year ago.
Capital-city home values have fallen 8.1% in just seven months, Cotality said, a steeper decline over the same period than the 7% drop recorded in 2022-2023, when the central bank raised interest rates sharply to bring inflation under control after the COVID-19 pandemic.
Mid-sized capitals led the October declines. Brisbane home values fell 2.0% and Perth dropped 1.7%, unwinding some of the gains of roughly 50% racked up over the past five years. Sydney prices fell 1.6% in the month, leaving values 1.5% below where they were five years ago.
Cotality research director Tim Lawless said buyers now had far more stock to choose from and greater leverage, with less urgency than a year ago when prices were rising rapidly. But despite the buyer’s market, he said, buyers were noticeably absent, reflecting low confidence and ongoing difficulties affording mortgages.
Property sales have slumped, falling 23% from a year earlier and standing 18% below the five-year average. The drop has been most pronounced in Sydney, where transaction volumes are down 30% from a year ago.
More weakness may lie ahead. The Reserve Bank of Australia is widely expected to raise interest rates for a fifth time next Tuesday, to 4.85%, an 18-year high, in its fight against inflation. Markets imply nearly a 90% probability of a hike, with a 20% chance that rates could reach 5.1%.
Policymakers have flagged the housing market as a downside risk to the economy, but have been sanguine about financial stability risks from the downturn. The Reserve Bank has said most Australian mortgage holders would still be in positive equity even if house prices dived 20%.
Note: the featured image is a file photo of houses in Flemington, Victoria, taken in 2010, not a photograph of the current housing market.
Sources: Reuters, “Australian home prices fall for seventh month, looming rate hike adds to pain”, 2 November 2026, https://www.reuters.com/world/asia-pacific/australian-home-prices-fall-seventh-month-looming-rate-hike-adds-pain-2026-11-01/
