Housing prices

Monday, August 3, 2026, at 12:01 am

Property prices fell across the country in July.

In short:

The national housing market downturn is no longer limited to Sydney and Melbourne, with Brisbane and Adelaide also seeing price declines in July.

Analysts say interest rate hikes and tax changes have caused the market weakness.

What's next?

Economists believe property prices will depend on interest rates and their effect on mortgage borrowing and unemployment.

Australia's housing downturn is spreading, with previously strong markets now experiencing declines.

National property prices fell 0.7% in July, the largest monthly decline since December 2022.

The downturn is no longer confined to Sydney and Melbourne, with Brisbane and Adelaide prices falling 0.6% and 0.2%, respectively.

There's been a rapid deterioration in Brisbane's market, which is surprising.

The total stock available for sale in Brisbane has increased, giving buyers more options.

In other words, Brisbane's housing supply has grown, benefiting buyers.

Perth saw a 0.1% increase, while Darwin recorded a 0.8% increase.

The weakening market is good news for first-home buyers, with more confident bidders in Melbourne.

Buyers are returning to the market, but they are limited.

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Vendors may pull back from the market as they hesitate to sell at a loss.

When vendors look at the market, they see challenging conditions and may wait for a better time to sell.

Sellers could withdraw from the market to secure a higher price later.

Are there more declines ahead?

Changes to negative gearing and interest rate hikes have contributed to the market softening.

These policy changes take time to process, and their effects are ongoing.

Interest rate increases have reduced borrowing capacity, even in declining markets.

These changes happen over several months.

Gerard Burg expects property values to continue declining in the short term.

Alan Oster believes the market weakness is mainly due to higher interest rates.

There's uncertainty about whether the Reserve Bank will raise rates further.

A weakening economy could lead to higher unemployment and more falls in property prices.

If the unemployment rate reaches 5%, it could signal a recession.

Brisbane's property prices have declined after strong growth.

In a recession scenario, Mr. Oster expects a property market correction of 10% or more.

If that happens, the Reserve Bank would likely cut rates.

Despite the market's loss of momentum, Mr. Burg sees factors supporting the market.

Unemployment remains low, and population growth continues, supporting the market.

New construction is difficult, and feasibility issues arise as prices fall.

Low unemployment and limited forced sales could limit supply-side pressure and prevent steep price declines.

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