Australian dwelling values fell 1.1% in September, the sixth straight month of decline, according to Cotality’s Home Value Index. The national market is now 5.2% below the record highs it set in March 2026.
Every capital city except Darwin recorded a fall over the month, along with 71% of regional sub-markets.
The most striking shift is in Brisbane, which recorded the sharpest monthly decline of any capital in September at -1.5%, edging past Sydney’s -1.4% fall.
Tim Lawless, Cotality’s research director, said the breadth of the downturn was significant.
“97% of capital city suburbs were down in value over the three months to end of September, highlighting the broad-based scope of this negative housing cycle,” Tim said.
Sydney remains the deepest into its correction, with values 8.6% below their February peak.
Melbourne is 7.5% below its March 2022 high, though its monthly pace of decline, at 0.7%, is now milder than every mid-sized capital, which all fell more than 1% in September.
Annually, the national figure is flat at 0.0%, masking a widening split between markets.
Perth (10.1%) and Darwin (11.9%) are still recording strong annual gains carried over from the growth cycle through 2024 and early 2026, while Sydney (-7.0%) and Melbourne (-6.2%) are well into negative territory and Canberra is down a more modest 1.6%.
Regional markets are proving more resilient than the capitals, up 5.6% annually against a 1.8% annual decline across the combined capital cities.
Turnover has slowed alongside values. Estimated home sales over the past three months are tracking 19.1% below year-ago levels nationally, with Brisbane (-27.2%), Sydney (-26.5%) and Perth (-24.2%) all recording annual declines in sales volume of more than 20%.
“The sharp drop in sales has implications for the broader economy, with lower sales likely to hit some retail segments as well as stamp duty revenues for state governments,” Tim said.
Stock on market has built up even as new listings slow. Across the combined capitals, the flow of fresh listings was 9.2% lower than a year ago, but total inventory was tracking 23.1% higher.
“Despite fewer new listings entering the market, inventory levels have risen sharply because the rate of sale has fallen even faster. Capital city homes are now taking a median of 39 days to sell compared with 23 days a year ago, resulting in an accumulation of advertised supply,” Tim said.
“The lift in available stock is improving choice for buyers, but ironically, many prospective buyers don’t have the confidence or financial capacity to buy at the moment.”
Cotality’s outlook points to further softness, citing the Reserve Bank’s decision to lift the cash rate to its highest level in 15 years as a fresh headwind for borrowing capacity.
“With household debt at high levels, borrowers are far more sensitive to interest rates compared with almost fifteen years ago when interest rates were previously this high,” Tim said.
“Borrowers are not only facing higher mortgage costs, but also an extended period of elevated living expenses and negative real income growth. Together, these pressures are narrowing the pool of buyers able to qualify for a mortgage and reducing the amount they can afford to pay.”
