Australia’s property market contraction extended into a fifth consecutive month in August, driven by a broadening slowdown across major capital cities as high interest rates and stretched borrowing capacities continue to sideline buyers.
National home prices fell 0.2 per cent over August, pulling median property values down to $886,000 and leaving prices nationwide 2.7 per cent below their March peak, according to the latest realestate.com.au Home Price Report.
While the pace of national price falls eased slightly in August, the downturn is broadening into previously resilient strongholds, creating a starkly uneven housing market. Combined capital city prices fell 0.3 per cent over the month, bringing annual growth across the capitals to a near-standstill at just 0.2 per cent.
In contrast, regional property markets held flat over the month and remain 6.6 per cent higher than a year ago, reflecting a widening gap between capital and regional performance as buyers seek out affordability.
The loss of momentum was felt across almost every major Australian city in August. Adelaide recorded the largest fall among the capitals, dropping 0.9 per cent over the month. Canberra followed with a 0.4 per cent decline, while both Sydney and Brisbane recorded 0.3 per cent price falls.
Melbourne prices fell 0.2 per cent over the month. Darwin stood out as the sole capital city to record price growth, ticking up 0.1 per cent.
The weakness in the capital city housing sector is increasingly evident on an annual scale. Melbourne leads the annual price declines among the capitals, sitting 4.3 per cent lower than a year ago with a median value of $823,000.
Sydney prices are down 3.6 per cent annually to a median of $1,194,000, while Canberra has recorded an annual fall of 2.1 per cent to sit at $849,000. While Perth, Adelaide, Brisbane, and Darwin maintain positive year-on-year growth, their short-term monthly momentum has slowed markedly.
Affordability pressures are also shifting buyer preference toward lower-cost property types. Nationally, house prices dropped 0.3 per cent in August, whereas unit prices slipped by a milder 0.1 per cent.
Over the past 12 months, units have outperformed houses across the country, rising 3.0 per cent compared with 1.5 per cent for detached houses.
Realestate.com.au Senior Economist and report author Eleanor Creagh pointed to interest rate pressures and buyer hesitation as key drivers of the soft market conditions.
“National home prices fell for a fifth consecutive month in August, as higher interest rates continue to constrain borrowing capacities and weigh on housing demand,” Eleanor said.
“While the pace of national price falls eased slightly in August, prices continued to decline across most capital cities. Momentum has slowed in markets that have been among the strongest performers over the past year, with Adelaide recording the largest fall in August.”
Eleanor highlighted that the ongoing affordability squeeze is redirecting buyer activity across regions and dwelling types.
“At the same time, the divergence between capital city and regional markets has widened,” she said. “As affordability pressures are pushing demand toward cheaper markets and dwelling types, both regional and unit markets are proving considerably more resilient.”
Looking ahead, she said market conditions are expected to stay soft in the near term.
“Further price falls are likely to be seen over the coming months, particularly across the capital cities,” Eleanor said. “Uncertainty around tax changes, the outlook for interest rates, and ongoing price falls, continue to weigh on confidence, keeping some buyers on the sidelines.”
| Region | Monthly Change | Annual Change | Change from Peak | Median Value |
| Sydney | -0.3% | -3.6% | -4.9% | $1,194,000 |
| Melbourne | -0.2% | -4.3% | -5.3% | $823,000 |
| Brisbane | -0.3% | +7.5% | -2.8% | $1,046,000 |
| Adelaide | -0.9% | +8.0% | -1.6% | $928,000 |
| Perth | -0.2% | +10.4% | -3.2% | $980,000 |
| Hobart | -0.2% | +6.7% | -0.5% | $729,000 |
| Darwin | +0.1% | +14.1% | 0.0% | $639,000 |
| Canberra | -0.4% | -2.1% | -3.5% | $849,000 |
| Combined Capitals | -0.3% | +0.2% | -3.6% | $981,000 |
| Regional Australia | 0.0% | +6.6% | -0.5% | $719,000 |
| National Total | -0.2% | +1.8% | -2.7% | $886,000 |