AUSTRALIA / RankWire.AI / – Australia’s property market experienced a $34.1 billion decrease in worth during the June quarter as home prices weakened after years of robust increases. The total value of the nation’s housing stock declined 0.3% to $12.689 trillion, marking the first quarter-to-quarter drop since September 2022. A forecast published this month indicating a 10% peak-to-trough decline in home prices suggests a drop of roughly $1.3 trillion when applied to the current national property valuation, underscoring the significant amount of wealth connected to Australian real estate.
According to the Australian Bureau of Statistics, households held residential properties valued at $12.183 trillion at the end of June. The country’s housing stock comprised 11.531 million dwellings, an increase of 54,400 during the quarter. Nonetheless, the average dwelling price fell by $8,200 to $1.1004 million. This quarterly downturn signals a shift from the strong national gains seen in recent years. Despite the decline, the total value of Australian housing remains 8.5% higher than it was a year earlier.
The largest decrease in housing value was in New South Wales, which lost $92.9 billion during the quarter. Victoria experienced a $44.3 billion fall, while the Australian Capital Territory saw a $1.4 billion decline. Meanwhile, all other states and territories reported increases in total residential values. The average home price also declined in New South Wales, Victoria, and the ACT. Still, New South Wales maintained the highest mean dwelling price at $1.305 million, followed by Queensland at $1.131 million.
Housing prices dip as borrowing costs climb
Recent market data shows that the housing slowdown persisted beyond the June quarter. In August, national average home prices dropped by 0.9%, marking a continuation of a five-month trend of monthly declines. AMP chief economist Shane Oliver stated that prices had fallen 3.6% from their peak by the end of August. His outlook predicts an approximate 10% peak-to-trough decline at the national level. When applied to the residential property stock valued at around $12.7 trillion, this percentage translates to roughly $1.3 trillion in lost value.
This slowdown has been accompanied by rising borrowing costs. The Reserve Bank of Australia increased the cash rate three times in 2026, bringing it up to 4.35%. The total increase amounts to 75 basis points. Financial institutions have passed these higher rates onto mortgage and deposit products, causing scheduled mortgage payments to approach their 2024 peaks in relation to household disposable income. The central bank’s August assessment also revealed that national housing prices were 1.6% below their March peak.
Sydney and Melbourne Lead the Decline in Housing Markets
Among Australia’s major markets, Sydney and Melbourne have reported the most significant recent declines in housing prices. Auction clearance rates have also fallen below their long-term averages. Although price drops have become more widespread across the country, regional differences remain pronounced. Brisbane and Adelaide showed signs of weakening in the latest central bank review. In contrast, Perth and various regional areas continued to record price gains, albeit at a slower pace in some regions. These regional disparities have resulted in a national downturn that varies considerably between individual housing markets.
Furthermore, the latest data highlight that the current decline follows a much larger rise in Australian property values since the pandemic began. As of August, national housing prices were about 5% higher than a year earlier, and roughly 50% above the levels at the pandemic’s onset. Official data on dwelling stocks for the September quarter are scheduled for release on December 1. Until then, the most recent national figure remains the $34.1 billion quarterly decline recorded through June.