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🇸🇬 Singapore /Economy & Trade

Is Australia’s property boom over?

From The Straits Times · () English

Summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Australian property prices have seen a steep drop, raising questions about the end of a long-term boom.
  • Government changes curbing tax breaks for investors, coupled with rising interest rates, are accelerating the downturn.
  • Analysts suggest the factors driving the boom for decades are now shifting, potentially leading to a prolonged period of price declines.

Australia's property market, long characterized by spectacular price surges, is facing a potential turning point. A significant drop in home prices, exacerbated by the federal government's recent move to curb tax breaks for investors, has analysts questioning whether one of the world's most remarkable property booms is finally over.

We have been in a long-term boom which took prices from below trend to above trend and price-income ratios to levels never seen before.

— Shane OliverChief economist at AMP, describing the historical context of Australia's property boom.

Over the past 30 years, Sydney's median home price has surged by over 730 percent, transforming it into one of the world's most expensive property markets. This boom was fueled by a confluence of factors including high migration, falling interest rates, and a persistent shortage of housing supply. However, these tailwinds appear to be turning into headwinds.

Some of those things that have supported the long-term boom are now petering out or going in the opposite direction.

— Shane OliverChief economist at AMP, explaining the shift in market drivers.

Property prices in Sydney and Melbourne have fallen by 4.5 percent since the start of 2026, with recent monthly drops exceeding 1 percent. Auction clearance rates have plummeted to their lowest levels since early 2020. Shane Oliver, chief economist at AMP, believes there's a significant chance the long-term boom has ended, citing the waning impact of factors like the shift to two-income households and financial deregulation.

We are going through a big period of uncertainty.

— Nerida ConisbeeChief economist at Raine & Horne, commenting on the current market conditions.

The downturn has spread to smaller cities like Brisbane and Adelaide, and even Perth, which saw a 23 percent price leap last year, is now showing signs of decline. The federal government's budget decision on May 12 to restrict negative gearing and remove capital gains tax discounts from July 2027 has accelerated the market's softening, which had already begun following interest rate rises earlier in the year. Nerida Conisbee of Raine & Horne noted a significant pullback in investor activity and very low attendance at open homes, indicating a weak market.

Investor activity has pulled back; open home attendances are very low. Things are very weak.

— Nerida ConisbeeChief economist at Raine & Horne, describing the impact of recent changes on the market.
DistantNews Editorial

Originally published by The Straits Times. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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