House prices are now falling in four capital cities with the Adelaide market beginning to slide in June, while Sydney values have dropped by $48,000 since the start of the year, according to data from Cotality released on Wednesday.
Sydney and Melbourne see biggest monthly drops since 2022
Sydney and Melbourne recorded their largest one-month decline in values since August 2022, falling 1.2% and 1% respectively. Sydney median home prices have fallen $48,000 since January and are now just $3,000 above where they were in June 2025. Melbourne’s median prices are $7,000 below June 2025 levels.
In Canberra, prices are $8,000 below January levels but still $25,000 above a year earlier. Adelaide home prices had risen for 15 consecutive months, including a 15.4% rise in the last year, but fell in the second half of June after a modest rise, Cotality’s daily data shows.
Interest rate hikes and tax reforms weigh on demand
Interest rates have risen three times since February, and the government’s tax reforms have reduced property investors’ borrowing capacity, weighing down housing demand. The Reserve Bank board left interest rates on hold in June after being caught off-guard by the rapid slowdown, according to minutes of its meeting published on Tuesday.
More than half of homes taken to auction are not selling, with national clearance rates holding below 50% since the end of May. Luke Banitsiotis, Ray White’s chief auctioneer for Victoria and Tasmania, said buyers were still showing up to auctions but many sellers were unwilling to drop their prices. “You are still able to sell,” Banitsiotis said. “It’s probably just at a different price point than you were able to do two months ago.”
Sales volumes drop 16.2% compared to last year
Overall, home sales have slowed. According to Cotality, the total number of sales in capital cities in the three months to June was 16.2% down on the same period last year. Banitsiotis said homebuyers were waiting for the perfect opportunity or for a big discount. “There’s ones that are there and will move if it’s the right property, but … there’s others going, ‘well, if this gets worse, maybe we’ll get it for 5% cheaper than it is now,’” he said.
Banitsiotis noted that homes priced under $1 million were still selling quickly, but selling higher-priced properties had become a “hard slog.”
Perth and Brisbane also see slowdown
Markets were also stalling in Perth – where prices rose nearly 24% in the last year but just 0.7% in June – and in Brisbane, which recorded a 17.4% annual median price rise but just 0.3% for June, Cotality reported. The two cities also saw their estimated prices in May revised down by over $10,000, as more data revealed the depth of the slowdown.
Cotality did not predict a sharp price slump in its report, saying: “The most likely path from here is a further loss of momentum and a gradual drift lower in housing values, rather than a sharp national correction.”
