The traditional spring selling season has delivered a difficult combination for Australian real estate agents: fewer buyers committing to purchases, properties spending longer on the market and a growing backlog of unsold homes, despite fewer owners putting their properties up for sale.
Cotality’s October Housing Chart Pack, released today, reveals an estimated 39,747 homes changed hands nationally in September, a 20.9 per cent decline on the same month last year.
The national median time on market has climbed to 41 days, compared with just 26 days a year earlier, while the four-week average auction clearance rate has fallen to 48.3 per cent, down from 64.4 per cent in late February.
Perhaps the most telling figure for agents is the growing imbalance between new listings and existing stock.
New listings were 7.9 per cent lower than a year earlier and 11.9 per cent below the five-year average, yet the total number of properties advertised for sale increased 19.1 per cent to 145,573.
It suggests the slowdown is being driven by weakening buyer demand rather than a flood of new properties entering the market, leaving agents with more unsold stock and vendors facing longer campaigns.
Cotality research director Tim Lawless said the disappointing start to spring could not simply be attributed to seasonal interruptions.
“School holidays and football finals can disrupt the market during September, but they don’t explain the extent of the slowdown we’re seeing in sales activity or why homes are taking so much longer to sell,” Mr Lawless said.
“The bigger issue is that buyers are finding it harder to commit. Higher interest rates have reduced borrowing capacity, household budgets are under pressure and confidence is weak. Even people who are in a position to buy may be reluctant to make a decision while values are falling.”
He said the usual spring uplift had failed to materialise.
“Spring normally brings more activity, but we’re seeing fewer new listings and a growing number of properties sitting on the market. That’s not an encouraging combination for sellers.”
The figures underline how quickly the balance of power has shifted towards buyers, with capital city vendors now discounting their asking prices by an average of 4.4 per cent, the highest level in five years.
Across the combined capitals, properties are taking a median of 39 days to sell, compared with 23 days a year earlier, also the longest selling period recorded in the five-year series.
For agents, the figures point to a market in which realistic pricing, vendor expectations and the ability to convert inspections into offers are becoming increasingly important.
Borrowing power takes another hit
The slowdown follows the Reserve Bank’s fourth interest rate increase of 2026, with the cumulative rises since February reducing the estimated borrowing capacity of a median-income household by around $90,000, or 9 per cent, according to Cotality.
That reduction is occurring alongside falling property values, creating a difficult environment in which buyers may have less money to spend but are also reluctant to purchase before prices stabilise.
“Buyers aren’t just dealing with reduced borrowing power. They’re also weighing up higher repayments and the prospect of further price falls, which is making some reluctant to commit even if they can afford to buy,” Mr Lawless said.
National dwelling values fell 3.7 per cent over the September quarter, with the combined capitals recording a sharper 4.3 per cent decline.
On an annual basis, national dwelling values were unchanged, masking substantial differences between individual markets.
Brisbane and Perth lose their advantage
Some of the most dramatic changes are occurring in Brisbane and Perth, where years of strong price growth and limited housing supply had previously given sellers considerable negotiating power.
Total advertised stock has increased 60.4 per cent in Brisbane and 64.7 per cent in Perth over the past year, while selling times have more than doubled in both cities.
In Brisbane, the median time on market has increased from 17 to 38 days. In Perth, it has risen from just 11 days to 26.
Both markets recorded a 4.7 per cent decline in dwelling values over the September quarter, although annual growth remains positive at 5.9 per cent in Brisbane and 10.1 per cent in Perth.
The figures suggest the strength of these markets earlier in the year is increasingly at odds with current selling conditions.
“Brisbane and Perth have gone from markets where buyers had very little choice and properties were selling quickly, to conditions where listings are rising and with less competition, buyers have more time to make a decision,” Mr Lawless said.
For agents accustomed to rapid sales and strong competition, the shift means recent comparable sales and vendor price expectations may need closer scrutiny as market conditions change.
Sydney recorded the largest quarterly decline among the capitals, with dwelling values falling 4.9 per cent over the three months to September.
Values in Australia’s most expensive housing market are now 8.6 per cent below their February 2026 peak.
Melbourne values fell 3.4 per cent over the quarter and remain 7.5 per cent below their March 2022 peak.
Darwin was the only capital to record quarterly growth, with values rising 0.5 per cent.
Regional markets prove more resilient
While the capital cities are bearing the brunt of the downturn, regional markets have held up comparatively well, both in property values and transaction volumes.
Regional dwelling values declined 1.9 per cent over the September quarter, less than half the 4.3 per cent fall across the combined capitals.
Over the year, regional values remained 5.6 per cent higher, compared with a 1.8 per cent decline across the capitals.
The difference is also evident in sales activity, with regional transaction volumes falling 1.6 per cent over the year, compared with a 9.1 per cent decline in capital city sales.
“Property values are typically lower across regional Australia, which gives buyers more options within their budgets. That doesn’t make regional markets immune to higher interest rates, but it helps explain why sales activity and values have held up better than in the capitals,” Mr Lawless said.
The rental market is also showing signs of moderation, with national rents increasing 0.5 per cent over the September quarter, the slowest quarterly growth since December 2024.
Annual rental growth has eased to 5.5 per cent, while national gross rental yields have increased to 3.85 per cent, their highest level since August 2019.
All eyes on November
The next major test for the housing market will come with upcoming inflation figures and the Reserve Bank’s November interest rate decision.
With four rate increases already delivered this year, another rise would place additional pressure on borrowing capacity and household confidence at a time when buyers are already showing considerable hesitation.
For real estate agents, the challenge heading into the final months of 2026 is whether the traditional spring increase in buyer activity will eventually emerge or whether longer selling campaigns and more difficult negotiations will become entrenched.
Mr Lawless warned that a meaningful recovery in buyer demand could remain elusive until households have greater certainty about interest rates.
“We’d normally expect housing activity to pick up through October and November, but with four interest rate rises already this year and the possibility of more to come, there are likely to be substantial headwinds for the market through to the end of the year,” he said.
“Lower property prices will eventually help improve affordability, but that benefit is being offset by higher borrowing costs. Until households have more certainty about interest rates and their financial position, it’s difficult to see a sustained recovery in buyer demand.”