AUSTRALIA / RankWire.AI / – Australia’s housing sector experienced a $34.1 billion decrease in value during the June quarter, reflecting a slowdown after years of robust growth. The total value of the country’s residential stock declined by 0.3% to $12.689 trillion. This marked the first quarterly downturn since September 2022. A forecast published this month predicts a 10% peak-to-trough drop in home prices, which equates to approximately $1.3 trillion when applied to the current national property holdings, emphasizing the significant wealth connected 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. The nation’s housing stock comprised 11.531 million dwellings, an increase of 54,400 units during the quarter. Nonetheless, the average dwelling price decreased by $8,200 to $1.1004 million. This quarterly decline signifies a departure from the strong gains recorded in recent years. Despite the drop, the total value of Australia’s housing remains 8.5% higher than it was a year earlier.
The most significant reduction in housing value occurred in New South Wales, which saw a loss of $92.9 billion during the quarter. Victoria experienced a $44.3 billion decrease, while the Australian Capital Territory saw a decline of $1.4 billion. Conversely, all other states and territories recorded growth in total residential values. Additionally, median dwelling prices fell in New South Wales, Victoria, and the ACT. Still, New South Wales maintained the highest median home price at $1.305 million, followed by Queensland at $1.131 million.
Rising borrowing costs contribute to retreat in home prices
Recent market data indicates the housing slowdown persisted after the June quarter. In August, average national home prices dropped by 0.9%, extending a five-month trend of monthly decreases. AMP chief economist Shane Oliver noted that prices had fallen by 3.6% from their peak by the end of August. His outlook estimates a roughly 10% peak-to-trough decline on a national level. When applied to Australia’s residential property value of around $12.7 trillion, this percentage translates to roughly $1.3 trillion in lost wealth.
The housing market’s cooling has been accompanied by increased borrowing costs. The Reserve Bank of Australia has raised the cash rate three times in 2026, pushing it to 4.35%. These hikes total 75 basis points. Financial institutions have passed these higher rates onto mortgage and deposit products. As a result, scheduled mortgage repayments are approaching their 2024 peaks relative to household disposable income. Furthermore, the Reserve Bank’s August assessment showed that national housing prices are 1.6% below their March peak.
Sydney and Melbourne experience the most pronounced price declines
Among the largest markets, Sydney and Melbourne have recorded the most significant recent declines in housing prices. Auction clearance rates have also fallen below their historic averages. Although price decreases are now more widespread across Australia, regional differences remain substantial. Brisbane and Adelaide showed signs of weakening in the latest central bank analysis, whereas Perth and other regional markets continued to record price gains, albeit at a slower pace in some areas. These regional variations have resulted in a national downturn that varies sharply between individual housing markets.
Furthermore, the latest data highlight that current declines follow a much larger increase in Australian property values since the start of the pandemic. As of August, national housing prices remained about 5% higher than a year earlier. They are also approximately 50% above the levels recorded at the onset of the pandemic. Official data for the September quarter’s dwelling stock are scheduled for release on December 1. Until then, the latest national figure remains the $34.1 billion quarterly decline reported through June.