House prices have fallen in Brisbane, Adelaide, and Perth as the market downturn spreads across Australia, according to new data from Cotality released on Monday. The national median home price now stands at $928,000, approximately $19,000 below its March peak.
Brisbane's Historic Run Ends
Brisbane's median price has dropped about $8,000 since May, bringing it back to its March level of $1.1 million. This marks the end of an unprecedented 40-month period of consecutive price increases that began in February 2023, with the first decline recorded in June.
Adelaide and Perth have also seen their median home prices fall by approximately $4,000 each from their record highs set in May, now at $944,000 and $1.03 million respectively.
Regional and National Trends
In June, regional Australia's home values declined overall for the first time since January 2023. The downturn has continued into July, with regional home values falling or remaining flat in every state.
The major capitals have been hit hardest. Sydney's median price has fallen $69,000 since February, while Melbourne and Canberra have seen declines of $39,000 and $22,000 respectively. Despite these drops, prices in Sydney and Melbourne remain above their January 2025 levels, and Canberra's prices are still higher than they were in September 2025.
Factors Behind the Decline
The housing market has slowed since February, coinciding with the Reserve Bank of Australia's (RBA) interest rate hikes and the outbreak of the US war on Iran. Additionally, the May federal budget reduced property investors' tax concessions, further dampening demand.
Capital gains tax changes are already impacting wealth inequality, as noted by Greg Jericho in a recent analysis. NAB reported a 15% fall in home loan applications from the first quarter of 2026 to the three months ending June, with Westpac, Equifax, and Loan Market also reporting declining mortgage demand.
RBA Governor Responds
RBA Governor Michele Bullock, speaking at an Anika Foundation lunch on Wednesday, expressed surprise at the slump in house prices and housing demand since May. She noted that interest rates are only "a bit" restrictive, attributing the decline 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."
Market Adjustments and Outlook
Buyers and sellers are already adapting, with auction clearance rates rising from a June low of 47.4% to 53.6% over the weekend, according to Cotality's preliminary data. The number of new listings declined in July as sellers held off entering the market to wait out weak conditions.
Despite the downturn, the RBA has reported that fewer than 1% of borrowers have fallen into negative equity, where home values are less than their loans, and an even smaller share are unable to make repayments. The RBA is not expected to raise interest rates at its next board meeting on 11 August.
