AUSTRALIA / RankWire.AI / – Australia’s property market experienced a significant decrease of $34.1 billion in its total value during the June quarter, marking a period of weakening prices following years of substantial growth. The overall value of the country’s dwelling stock declined by 0.3% to reach $12.689 trillion. This decline was the first quarterly downturn since September 2022. A forecast published this month suggests a potential peak-to-trough home-price decrease of 10%, which, when applied to the current national property value, equates to approximately $1.3 trillion, illustrating the vast amount of wealth linked to Australian real estate.
According to the Australian Bureau of Statistics, households held $12.183 trillion worth of residential properties at the end of June. During this period, the nation’s housing stock increased by 54,400 dwellings to a total of 11.531 million. Despite the rise in total dwellings, the average home price fell by $8,200, bringing the mean dwelling value down to $1.1004 million. This quarterly decline marked a departure from the recent years’ trend of consistent gains. Nonetheless, the overall value of Australia’s housing remains 8.5% higher compared to the same period last year.
The largest reduction in property values occurred in New South Wales, which saw a loss of $92.9 billion in dwelling worth during the quarter. Victoria experienced a $44.3 billion decrease, while the Australian Capital Territory’s market shrank by $1.4 billion. Conversely, all other states and territories saw increases in their residential values. Home prices in New South Wales, Victoria, and the ACT also declined, but the state still held the highest average home price at $1.305 million, with Queensland close behind at $1.131 million.
Housing prices retreat amid rising borrowing costs
Recent market data indicates that the slowdown persisted after the June quarter ended. In August, national average home prices fell by 0.9%, continuing a trend of monthly decreases that has lasted five months. Shane Oliver, chief economist at AMP, noted that prices had declined by 3.6% from their peak by the end of August. His projections suggest a roughly 10% peak-to-trough drop in national housing prices. Applying that percentage to the approximately $12.7 trillion worth of residential property in Australia suggests a loss of about $1.3 trillion in value.
This cooling in the housing market has coincided with an increase in borrowing costs. The Reserve Bank of Australia has raised the cash rate three times in 2026, bringing it to 4.35%. These increases amount to a total of 75 basis points. Financial institutions have responded by passing on higher rates to mortgage and deposit products. As a result, scheduled mortgage payments have risen close to their peaks seen in 2024 relative to household disposable income. The central bank’s August assessment also revealed that national housing prices are currently 1.6% below their peak recorded in March.
Sydney and Melbourne Lead the Decline in Property Values
Among the major markets, Sydney and Melbourne have experienced the most significant recent declines in housing prices. Auction clearance rates in these cities have also dropped below their long-term averages. Price reductions are becoming more widespread across Australia, although regional variations remain substantial. The latest assessment shows Brisbane and Adelaide’s markets have weakened, while Perth and other regional areas continue to record price gains—albeit at slower growth rates in some locations. These disparities have resulted in a national housing downturn that varies markedly from one market to another.
The most recent figures also put this decline into perspective, highlighting the much larger increase in Australian property values since the start of the pandemic. As of the August report, national home prices are still roughly 5% higher than a year earlier. They are also approximately 50% above pre-pandemic levels. Official dwelling-stock figures for the September quarter are set to be released on December 1. Until then, the latest comprehensive national data continues to show a $34.1 billion decline in value during the June quarter.