Australian home prices have fallen for the third straight month as the ongoing real estate downturn deepens across the country, including in cities where prices had, until recently, grown strongly.
Figures from PropTrack’s Home Price Index released Tuesday showed national prices dropped 0.3 per cent over June, the largest monthly fall in the year to date.
Sydney and Perth led the declines, with median dwelling prices in both cities dropping by an average of 0.5 per cent.
There were also average price falls of 0.2 per cent in Brisbane, Adelaide and Hobart and a 0.4 per cent average drop in Melbourne and Canberra.
Experts said price falls accelerated after Treasurer Jim Chalmers announced landmark tax reforms in the May federal budget. Picture: Hilary Wardhaugh
REA Group economist Anne Flaherty said these price movements showed the market downturn had broadened from what had started as a slump relegated to Sydney and Melbourne.
Weakness in the two biggest cities was initially sparked by interest rate hikes but became more widespread when negative gearing and capital gains tax reforms were announced in the May federal budget, Ms Flaherty said.
“Investor demand has dropped and that’s led to softer prices,” she said. “There are now consistent declines across all the major capitals.”
Ms Flaherty added the government reforms had contributed to a climate of uncertainty among all buyer types, not just investors.
This was manifesting as increased hesitation at auctions and a tendency for would-be buyers to sit on their hands while they wait to see what impact the reforms will have on prices.
“There is also an expectation among home buyers that prices will continue to drop and that’s made a lot of them hesitant to buy,” she said.
REA Group economist Anne Flaherty said the downturn was becoming more widespread.
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It should be noted that national home prices remain an average of 5.8 per cent higher than they were at this time last year, despite the drops in value over recent months.
Ray White chief economist Nerida Conisbee said a common fear among buyers was that a falling market raised the risk of “overpaying” for their properties.
“No one wants to be caught in a downward cycle,” she said, adding that buyers were wary that any home bought today could be cheaper in a few months.
SQM Research director Louis Christopher said it was likely the current downturn would extend into the next year – unless there was an unexpected interest rate cut.
He pointed to the ongoing Iran War, falling consumer confidence, cost of living pressures and government changes as likely headwinds for the market going forward.
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Auction clearance rates have tumbled in recent weeks, a trend that normally coincides with price falls.
Sydney would likely record the sharpest falls among the major capitals because the higher prices were more sensitive to interest rates, Mr Christopher said.
PropTrack showed a varying impact in growth trends across cities:
BRISBANE
See the latest home price changes in Brisbane and Queensland
Home prices in Brisbane dropped for the first time in three and a half years.
The PropTrack Home Price Index revealed Brisbane’s median price is $1.073m, down 0.2 per cent from May.
Ms Flaherty said the changes signalled a shift in Brisbane’s property market.
“It’s absolutely been a seller’s market for quite a long time in Brisbane,” she said. “We’re starting to see the tables turn.”
MELBOURNE
See the latest market update for Melbourne and Victoria
Melbourne house values are now worth less than they were a year ago after losing almost $5000 in the fourth straight month of tumbling prices in June.
It follows the city’s clearance rate plunging to just 46.6 per cent on the weekend in one of the worst figures seen since 2021.
Ray White Group chief economist Nerida Conisbee said Melbourne has been a weak market for some time.
The latest home value data showed Melbourne’s typical $984,000 house price is now below the same time in 2025, with PropTrack data showing it is the nation’s worst performing capital.
Prices dropped 1.8 per cent in the span of 12 months. It equates to an $18,000 hit to the city’s typical home price.
SYDNEY
See the latest home price changes in Sydney and its city regions
Sydney’s real estate slump worsened over the past month. And it’s led to warnings that first-home buyers who accessed government’s low deposit scheme could soon be left owing the bank more than their properties are worth.
Figures released Tuesday revealed property owners have lost an average of $31,000 in real estate wealth since the first rate hike in February, with price falls deepening over June.
Bidder registrations remain down on last year. Picture: Mike Dugdale
Sydney home values fell 0.5 per cent over the month, a rise from the 0.2 per cent fall in May, and are now an average of 2.5 per cent lower than in February.
ADELAIDE
Adelaide homes prices dropped for the first time in almost four years, with house and unit prices declining 0.2 per cent respectively over the past month.
Adelaide’s median house price now sits at $1.019m, while its median unit price is $704,000.
Despite the slight drops over the past month, house prices were 11.5 per cent higher than a year ago, while units were up 13.9 per cent annually.
PERTH
Perth’s run as the country’s hottest real estate market appears to have finally ended, with the city recording a 0.5 per cent drop in prices over June – a fall tied with Sydney as the biggest among capitals.
Ms Conisbee said Perth values had been surging for years off the back of the biggest housing supply crunch in the country and may have hit their affordability ceiling.
Prime Minister Anthony Albanese has come under fire because the tax reforms in the budget were not taken to the last election. Picture: Dan Peled
“Investors had been driving a lot of that growth and a drawback in investors will have contributed to the (drop),” she said. “But it has also been a very strong market for a very long time and it may have overheated.”
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