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Australian home prices fall for sixth straight month as downturn deepens

Australian home prices fall for sixth straight month as downturn deepens

Money Moves

Values sit 5.2% below March's peak, sales are down 19%, and economists see the deepest slump since 1980

3 days ago: September prices fall 1.1%, sixth straight drop

Overview

Updated 2 hours ago

Australian home values fell 1.1% in September, the sixth straight monthly drop. Prices now sit 5.2% below March's peak, and sales volumes over the past three months are down 19% from a year ago.

The Reserve Bank of Australia raised its cash rate to 4.6% on Tuesday, a 15-year high, as it keeps fighting inflation. Economists expect a peak-to-trough price fall near 10%, which would be the deepest downturn since records began in 1980.

Why it matters

A 10% price slide would erase household wealth and deliver Australia's deepest housing downturn since records began in 1980.

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Key Indicators

6
Consecutive months of national price declines
The slide began after the RBA started raising rates in February 2026.
5.2%
Cumulative price decline from March peak
National values are now flat against a year ago.
1.1%
September monthly price change
August's fall was revised to 1.2%, the steepest of the cycle so far.
19%
Year-over-year drop in three-month sales volume
Volume fell most sharply in Brisbane (-27.2%), Sydney (-26.5%) and Perth (-24.2%).
4.6%
RBA cash rate, a 15-year high
The fourth hike of 2026; the RBA warned it may raise again.
39
Median days to sell a home nationally
Up from 23 days a year ago, as buyers hold back despite more choice.
97%
Share of capital-city suburbs with value declines over three months
The downturn is broad-based; Darwin was the only capital to avoid a September fall.
10%
Consensus forecast peak-to-trough price fall
UBS, AMP and most economists see this; HSBC forecasts 13% if rates rise once more.

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People Involved

Tim Lawless
Tim Lawless
Research director at Cotality
Quoted on the breadth and cause of the downturn
SO
Shane Oliver
Chief economist at AMP
Forecasts a 10-15% price fall this cycle
 George Tharenou
George Tharenou
Chief economist at UBS Australia
Forecasts a peak-to-trough fall near 10%

Organizations Involved

Reserve Bank of Australia
Reserve Bank of Australia
Central bank
Raised the cash rate to 4.6%, a 15-year high

Australia's central bank, which sets the cash rate that drives mortgage costs.
Cotality
Cotality
Property data and analytics firm
Publisher of the Home Value Index behind the September data

The property data firm (formerly CoreLogic) that compiles the national Home Value Index used to track the downturn.
AMP
AMP
Financial services firm
Source of a widely cited 10-15% price-fall forecast

Australian financial services firm whose chief economist, Shane Oliver, is a leading voice on the housing outlook.
UBS
UBS
Global investment bank
Forecasts a peak-to-trough fall near 10%

Global bank whose Australian economics team expects prices to fall for at least another year.

Timeline

February 2026 September 2026

6 events Latest: 3 days ago
Tap a bar to jump to that date

  1. September prices fall 1.1%, sixth straight drop

    Latest Data

    Values sit 5.2% below the March peak; sales volumes are down 19% year over year.

  2. RBA raises cash rate to 4.6%

    Policy

    The fourth hike of 2026 takes the cash rate to a 15-year high; the RBA warns it may raise again.

  3. August prices fall 1.2%

    Data

    The August reading, later revised down, is the steepest monthly fall of the cycle so far.

  4. Federal budget tightens investor tax rules

    Policy

    The government announces less-favorable negative gearing and capital gains tax arrangements, cooling investor demand.

  5. National home values peak

    Data

    Cotality data shows values reached their high point in March, the peak the current downturn is measured against.

  6. RBA delivers first rate hike of the cycle

    Policy

    The Reserve Bank of Australia begins raising the cash rate, ending a period of low borrowing costs.

Scenarios

1

Australian house prices fall 10% from peak before mid-2027

Likely Resolves by Q2 2027

Discussed by: UBS, AMP, HSBC and most economists surveyed

UBS's George Tharenou expects dwelling prices to keep falling for at least a year with a peak-to-trough drop near 10%. AMP's Shane Oliver sees 10-15%, and HSBC forecasts 13% if the RBA hikes once more. The slowdown continues as higher rates, reduced borrowing capacity and the investor tax changes keep demand weak, without a global shock.

2

RBA hikes again, deepening the downturn toward 15%

Possible Resolves by End of 2026

Discussed by: HSBC, AMP

HSBC sees a 13% drop if rates rise one more time. Shane Oliver warns that if the Iran war drags on and oil reaches $150 a barrel, job losses and higher costs could push the fall to 20%. Trigger: inflation stays stubborn and the RBA raises the cash rate above 4.6%.

3

RBA pivots to cuts and the housing market stabilizes

Uncertain Resolves by Q2 2027

Discussed by: William Buck

William Buck analysts favor no further hikes and do not expect a meaningful rebound until 2027. If inflation cools enough, the RBA holds then cuts, and price falls slow. Trigger: softer inflation data and an easing signal from the central bank.

Historical Context

One moment from history that rhymes with this story — and how it unfolded.

2022-2023

Australia's 2022-2023 housing downturn

The Reserve Bank of Australia raised interest rates by 425 basis points after the COVID-era stimulus to tame inflation. National home prices fell 8.9%, the worst slump on record before the current cycle.

Then

The drop erased much of the pandemic-era price growth and sharply cooled the market.

Now

It set the comparison benchmark for today's downturn; the current cycle is forecast to exceed it.

Why this matters now

Economists expect this downturn to top that 8.9% record, with a peak-to-trough fall near 10% — and more if rates rise again.

Sources

(10)
+4
Investing.com MarketScreener (Reuters) Yahoo Finance (Reuters) ABC News Property Update realestate.com.au SBS News William Buck realestate.com.au Property Update (PropTrack)