Australia’s property market has recorded its seventh consecutive month of price declines, with Sydney overtaking Melbourne as the capital with the largest fall from its peak and the traditional spring selling season failing to deliver its usual lift in activity.
National home prices fell another 0.3 per cent in October, leaving values 4.3 per cent below their March peak and 1.9 per cent lower than a year ago, according to the latest realestate.com.au Home Price Report, released today.
The national median home value now sits at $871,000, with price declines recorded across every capital city except Hobart, where values remained unchanged.
But perhaps the most significant development for agents is the extent to which the downturn has spread beyond Sydney and Melbourne, with previously strong markets including Brisbane, Perth and Adelaide now experiencing sustained price pressure.
Sydney has overtaken Melbourne as the capital with the deepest correction, with home values now 6.7 per cent below their peak, compared with Melbourne’s 6.1 per cent decline.
realestate.com.au Senior Economist Eleanor Creagh said the speed of the market’s reversal highlighted the impact of higher borrowing costs on buyer confidence and purchasing power.
“Australian home values fell further in October, with Sydney’s decline from its peak now exceeding Melbourne’s. Brisbane and Perth have fallen almost 6% from their highs,” she said.
“The pace of the declines in these previously strong markets highlight how quickly conditions have shifted as higher borrowing costs constrain purchasing power and weigh on buyer demand.”
Spring selling season fails to deliver
The latest figures suggest that an increase in available properties has not translated into stronger buying activity.
Ms Creagh said buyers were approaching transactions more cautiously, with softer auction conditions and longer selling times pointing to a shift in negotiating power.
“Spring has brought more choice for buyers, but not the usual lift in momentum. Softer auction conditions, longer selling times and subdued sales activity suggest buyers are cautious,” she said.
“In this market buyers have more negotiating power, however higher mortgage rates continue to limit what households can borrow and pay.”
The findings point to a more challenging environment for vendors, particularly those whose price expectations remain anchored to the market’s earlier highs.
The changing conditions reinforce the importance of accurate pricing, realistic vendor expectations and understanding the borrowing constraints influencing buyer decisions.
Adelaide records biggest monthly fall
Adelaide led the national declines in October, with home prices falling 0.6 per cent, followed by Sydney and Brisbane, which both recorded 0.4 per cent falls.
Perth prices declined 0.3 per cent, Canberra and Darwin fell 0.2 per cent, and Melbourne recorded a smaller 0.1 per cent reduction.
Hobart was the only capital to avoid a monthly decline, with prices unchanged.
The figures also reveal how quickly conditions have changed in markets that were previously among Australia’s strongest performers.
Brisbane home values are now 5.8 per cent below their peak, while Perth prices have fallen 5.7 per cent.
Despite those corrections, both markets remain ahead of their levels a year ago, with Brisbane recording annual growth of 0.2 per cent and Perth up 2.4 per cent.
Adelaide prices are also 3.1 per cent higher annually, despite recording October’s largest monthly fall.
Melbourne, meanwhile, remains the only capital where home prices are lower than five years ago, with values down 3.5 per cent over that period.
Units holding up better than houses
The report also highlights a growing divide between houses and units, with affordability increasingly influencing which properties buyers can pursue.
National house prices fell 0.3 per cent in October and are now 2.4 per cent lower than a year ago.
Unit prices proved more resilient, declining just 0.1 per cent over the month and 0.2 per cent annually.
The difference is particularly pronounced in Sydney, where house prices have fallen 8 per cent over the past year, compared with a 2.9 per cent decline for units.
Sydney’s median house value now sits at $1.508 million, while the median unit value is $851,000.
Ms Creagh said the performance gap reflected the growing influence of affordability on purchasing decisions.
“The market adjustment remains uneven. Regional markets continue to outperform the capitals, while units have held up better than houses as affordability increasingly shapes demand.”
The report cautioned, however, that unit markets were not immune to the downturn, with some locations experiencing sharper declines than the national figures suggest.
Adelaide unit prices, for example, fell 1 per cent in October, despite remaining 3.7 per cent higher annually.
Regional markets continue to outperform
While capital city prices have fallen 3.7 per cent over the past year, regional markets continue to demonstrate greater resilience.
Regional home values declined just 0.1 per cent in October and remain 3.1 per cent higher than a year earlier.
They are also only 1.4 per cent below their peak, compared with a 5.4 per cent correction across the combined capitals.
Regional South Australia recorded annual growth of 10.2 per cent, followed by regional Western Australia at 8.9 per cent and regional Tasmania at 8.7 per cent.
The figures suggest that relative affordability continues to support demand outside the major capitals, although higher borrowing costs and weaker confidence are beginning to test those markets as well.
Further price falls expected into 2027
Looking ahead, the report offers little indication of an immediate recovery, with the prospect of another interest rate increase threatening to place further pressure on housing demand.
Ms Creagh warned that the cumulative impact of previous rate rises, combined with weaker confidence and deteriorating affordability, was likely to extend the downturn.
“Looking ahead, a further interest rate rise would reinforce the downturn already underway with softer housing market conditions likely to continue into 2027,” she said.
“Further price declines are likely as higher borrowing costs, weaker confidence and the cumulative impact of previous rate increases continue to weigh on demand, particularly where affordability has deteriorated most.”
With the traditional spring uplift failing to materialise, accurate pricing, clear vendor communication and an understanding of changing buyer expectations will become increasingly important as the industry heads towards 2027.