Australian home prices see biggest fall since 2022 as market declines nationally

Australia's housing market is now "fully in decline," registering the biggest monthly drop in home values in more than three years, according to property data firm Cotality. In June, dwelling values fell by 0.4 percent nationally, signaling a significant slowdown that has spread from Sydney and Melbourne to other parts of the country.

Sydney saw the steepest decline, with values dropping 1.2 percent, followed closely by Melbourne, which fell 1 percent. While markets in Brisbane and Perth are still experiencing growth, the pace has considerably slowed. Adelaide remained flat, indicating a waning momentum across most capital cities. Cotality's research head, Gerard Burg, described the June figures as an "important turning point" after months of decelerating growth.

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The key change we've seen in our June data is that the national market is now fully in decline.

Burg attributed the downturn to a "perfect storm" of factors impacting demand. "Even prior to the Reserve Bank lifting rates, we saw affordability being a considerable constraint in the market," he noted. The situation was exacerbated by three interest rate hikes, the impact of the Middle East conflict on energy costs, deteriorating consumer sentiment, and recent tax changes, all combining to drive the current downturn.

Revised data suggests the national housing market peaked in March, with home values falling 0.7 percent over the June quarter. Alternative data from PropTrack also reported a 0.3 percent national price decline in June, marking the third consecutive monthly decrease. Sydney and Perth recorded the largest falls in this index, both down 0.5 percent. While regional markets remained steady, the overall trend points to weakening house prices nationwide.

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Even prior to the Reserve Bank lifting rates, we saw affordability being a considerable constraint in the market.