Australia’s housing downturn may have further to run, with new research from Money.com.au identifying a lending pattern that has preceded every national property price downturn since 2008.
The analysis, based on Australian Bureau of Statistics (ABS) lending data, found that new owner-occupier home loans have fallen for three consecutive quarters, a pattern that has historically been followed by a sustained decline in dwelling prices.
According to Money.com.au, the latest figures suggest national dwelling prices peaked in the March quarter of 2026, with the market potentially reaching its low point between June 2027 and June 2028.
Lending slowdown points to further price falls
New owner-occupier loans fell 5.3 per cent in the September quarter to 76,578, following revised declines of 4.2 per cent in March and 4.0 per cent in June.
Money.com.au found that the same pattern of three consecutive quarterly declines had occurred ahead of each of the four national property price downturns identified since 2008.
In each case, national dwelling prices peaked within six months of the lending signal.
This time, the ABS mean dwelling price reached $1,108,600 in the March quarter before declining in June, placing the peak six months ahead of the September lending signal.
“The downturn isn’t coming, it’s already here,” said Sarah Walwyn, General Manager, Home Loans at Money.com.au.
“Prices topped out in March, and buyers have been pulling back all year.”
Based on the size of previous downturns, Money.com.au estimates that comparable falls could reduce the March quarter mean dwelling price by between $48,000 and $96,000.
However, those figures are historical scenarios rather than a forecast of the precise decline expected in the current cycle.
When could the market reach its low?
Money.com.au’s analysis found that previous market troughs occurred between nine and 21 months after the lending signal, with approximately 12 months the typical interval.
Applying that pattern to the September quarter 2026 signal suggests the market could bottom between the June quarter 2027 and the June quarter 2028, with September 2027 identified as the most likely period based on historical experience.
The research also found that the signal had not produced a false alarm across the 23 years of data examined.
“The peak is behind us, so now we can start looking for the low,” Ms Walwyn said.
“On past form, that’s about 12 months away.”
While the historical relationship provides a guide to potential market timing, it does not guarantee that prices will follow the same trajectory this cycle.
Australia’s largest housing markets show the same pattern
The slowdown in lending is not confined to one state, with all four of Australia’s largest states by loan numbers recording three consecutive quarterly declines in new owner-occupier loans.
Queensland has experienced the largest reduction, with lending down 19 per cent since the December quarter of 2025, followed by Victoria at 15.5 per cent and NSW at 13.9 per cent.
Western Australia has recorded a smaller, but still significant, decline of 9.8 per cent over the same period.
Money.com.au identified several factors contributing to the slowdown, including five Reserve Bank interest rate increases this year, taking the cash rate to 4.85 per cent.
The research also pointed to APRA’s restrictions on high debt-to-income lending, introduced in February, and changes to investor taxation announced in the Federal Budget.
Together, these factors have added pressure to borrowing capacity and housing demand.
The weaker lending activity could translate into a smaller pool of qualified buyers and longer selling periods, particularly in markets where affordability is already stretched.
However, the research also suggests the current downturn may be approaching a more identifiable stage in the property cycle, giving buyers, sellers and agents a historical reference point when planning their next move.
“Falling values and rising repayments squeeze equity at the same time,” Ms Walwyn said.
“Households have a window before the low to get their finances in order, and the ones who use it will be better placed once prices turn.”