Unit prices held broadly flat nationally in September and remain 1.8 per cent higher than a year ago, while house prices fell 0.3 per cent over the month and are now 0.4 per cent lower annually, according to the latest realestate.com.au Home Price Report.
The difference is particularly pronounced in Sydney and Melbourne, where unit prices held broadly unchanged during September even as house prices continued to fall.
Sydney house prices fell 0.5 per cent in September and are now 6.9 per cent below their peak and 6.5 per cent lower than a year ago.
Sydney unit prices were broadly unchanged over the month and sit 2.9 per cent below their peak.
In Melbourne, house prices fell 0.2 per cent in September and have now declined for 11 consecutive months. They sit 6.6 per cent below their peak and 6.2 per cent lower year-on-year, compared with a 2.7 per cent decline from peak for units.
The report said the divergence between houses and units provided another indication of how reduced borrowing capacity was reshaping buyer behaviour, with some buyers who may previously have purchased a house adjusting their expectations around property type, location or size.
Realestate.com.au Senior Economist and report author Eleanor Creagh said higher borrowing costs were continuing to weigh on the market.
“Higher interest rates are weighing on borrowing capacity and buyer demand,” she said.
“Sydney and Melbourne remain the deepest corrections, but downward momentum has strengthened in Adelaide, Brisbane and Perth, where conditions had previously been more resilient.
“The spring selling season has not delivered the usual lift in momentum. Auction clearance rates remain soft, homes are taking longer to sell, and sales volumes remain below last year’s levels.
“Together, these indicators point to weaker buyer demand and a widening gap between buyer and seller price expectations.”
The house-unit divide comes as national home prices fell another 0.2 per cent in September, marking a sixth consecutive monthly decline and leaving prices 3.3 per cent below their March 2026 peak.
Annual national growth has slowed to just 0.1 per cent, with the median home price sitting at $881,000.
Across the combined capitals, prices fell 0.3 per cent during September and are now 4.3 per cent below their peak and 1.6 per cent lower than a year ago.
Adelaide recorded the largest capital-city fall in September, declining 0.6 per cent, followed by Sydney and Perth, both down 0.3 per cent. Brisbane and Melbourne each fell 0.2 per cent.
Darwin and Canberra were the only capitals to record growth during the month, both rising 0.1 per cent, with Darwin reaching a fresh peak.
Sydney and Melbourne remain the deepest capital city corrections, with overall home prices sitting 5.5 per cent and 5.7 per cent below their respective peaks.
But the report found the pace of deterioration had strengthened in markets that had previously been among the country’s strongest.
Over the latest three months, Adelaide’s price decline equates to an annualised rate of about 8.6 per cent, compared with 7.9 per cent in Brisbane and 7.4 per cent in Perth.
The report cautioned that those figures do not mean prices will continue falling at those annualised rates, but instead illustrate the recent shift in momentum.
Regional markets are also proving more resilient
Regional home prices were unchanged in September, remain just 0.7 per cent below their peak and are still 5.1 per cent higher than a year ago, compared with the 1.6 per cent annual decline across the combined capitals.
The report said relative affordability was likely to be an important contributor to that resilience, with higher interest rates forcing buyers to make greater trade-offs around location, dwelling type and size.
The September figures point to a spring market in which the gap between vendor expectations and buyer capacity is becoming increasingly important.
Ms Creagh said further weakness was likely as higher borrowing costs continued to flow through the market.
“Further price falls are likely over the coming months as this week’s interest rate rise, tax changes and the cumulative impact of higher borrowing costs weigh on demand,” she said.
“However, resilient employment, limited forced selling and homeowner equity buffers should contain the severity of the adjustment.
“Reduced buyer purchasing power remains the dominant pressure on prices, rather than large numbers of owners being forced to sell.”