House prices are now falling across four major Australian capital cities, with Sydney experiencing a notable decline of A$48,000 since the beginning of the year. Data released by Cotality on Wednesday revealed that Sydney and Melbourne recorded their steepest monthly value drops since August 2022, falling by 1.2% and 1% respectively in June. This significant shift follows a period of sustained growth in many areas, highlighting the impact of recent economic changes.
Sydney's median home prices are now only A$3,000 above their June 2025 levels, while Melbourne's median prices are A$7,000 below that benchmark. Canberra also saw prices drop by A$8,000 from January, though they remain A$25,000 higher than a year ago. Adelaide, which had enjoyed 15 consecutive months of price increases, including a 15.4% rise over the last year, saw its market begin to slide in the latter half of June, according to Cotality's daily data.
The slowdown is largely attributed to three interest rate rises since February, coupled with government tax reforms that have curtailed property investors' borrowing capacity. These factors have collectively weighed down housing demand across the country. The Reserve Bank board opted to keep interest rates on hold in June, having been reportedly surprised by the rapid pace of the market's deceleration, as indicated by minutes from its recent meeting.
Further evidence of the market cooling is seen in auction clearance rates, which have consistently remained below 50% nationally since the end of May. Luke Banitsiotis, chief auctioneer for Ray White in Victoria and Tasmania, observed that while buyers are still present at auctions, many sellers are reluctant to adjust their price expectations. He noted that properties are still selling, but often at a different price point than just a couple of months prior.
Overall home sales have also slowed considerably. Cotality reported that the total number of sales in capital cities during the three months to June was down 16.2% compared to the same period last year. Buyers appear to be holding out for ideal opportunities or significant discounts, with homes priced under A$1 million still selling quickly, but higher-priced properties proving much more challenging to move. Markets in Perth and Brisbane, despite strong annual growth, also showed signs of stalling in June, with Cotality revising down estimated May prices for both cities by over A$10,000.
Despite these trends, Cotality does not anticipate a sharp national price slump, instead forecasting a continued loss of momentum and a gradual downward drift in housing values, rather than an abrupt correction.