Login
Property values take a $34bn hit
Australia’s housing market has shed $34.1 billion in three months, with sharp falls in NSW and Victoria creating new opportunities for investors as the broader downturn deepened.
Australia’s residential property market shed $34.1 billion over the June quarter, marking its first decline in four years as falling values weighed on the broader economy.
New Australian Bureau of Statistics (ABS) data showed the total value of the residential housing market fell to $12.68 trillion over the three months to June.
According to ABS head of finance statistics Dr Mish Tan, it was the first time the market’s total value had fallen since 2022.
“The quarterly fall was driven by lower property prices, with the mean dwelling price falling by 0.7 per cent to $1.1 million. This is consistent with recent softening in housing market conditions,” Tan said.
NSW recorded the steepest decline, with dwelling values falling 2.4 per cent and wiping around $32,700 from the state’s median price.
Victoria followed with a 2.1 per cent drop, equivalent to around $19,600, while the ACT recorded a 1.3 per cent decline, reducing its median dwelling value by about $13,300.
In the remaining states and territories, ABS data showed the mean price of dwellings rose across the board.
Despite the quarterly decline, Australia’s dwelling stock remained 8.5 per cent more valuable than a year earlier.
PRD chief economist Dr Diaswati Mardiasmo said the decline in residential dwelling values warranted caution, with the falls concentrated in NSW and Victoria, particularly their capital cities.
“What this means for agents and investors – it creates a snapshot opportunity to enter the market, especially if located in NSW and Victoria, while prices are slightly more affordable,” Mardiasmo told SPI.
Mardiasmo said that with the remaining states seeing growth between December 2025 and June 2026, the property market could rebound.
“The potential for a rebound is high, especially if current interest rates are put on hold for the rest of 2026, due to a structural undersupply issue. What is changing here is the level of demand, not the supply. We are already seeing a rebound in the time to buy a dwelling index.”
Broader Commonwealth Bank (CBA) housing forecasts showed that the property market downturn is expected to bring prices down by 10 per cent before stabilising.
Free investor loan check
Better property decisions start with smarter lending.
A free 15-minute finance check for property investors.
What are your lending goals?
Choose a goal to request a callback.
Ready to talk?
Book a 15-minute call →Finni Pty Ltd · Australian Credit Licence 384324 · Privacy
CBA senior economist Trent Saunders said that housing conditions had weakened more than expected, price falls had spread to more capital cities and interest rates were expected to remain higher.
He said that CBA now expected Sydney’s dwelling prices to fall by 11 per cent over 2026, with a peak-to-trough decline of around 13 per cent.
“This would mark one of the quickest and deepest downturns in the Sydney housing market in at least the last 20 years,” Saunders said.
According to Property Council chief executive Mike Zorbas, the data highlighted a decline in confidence, investment and the pipeline of future housing supply.
He said that falling established home prices, weaker buyer and investor confidence, higher interest rates and rising construction costs were threatening new housing projects and could worsen the rental supply shortage.
"Housing shortages start when investors decide the next project isn't worth the risk,” Zorbas said.
“Context matters for market confidence. The government is continuing to hike housing taxes at a time of raising capital, labour and materials costs.”
“This is stopping enquiries becoming sales and in turn stopping feasibilities stacking to support new home supply.”
To improve housing supply, the Property Council is calling on governments to boost infrastructure funding, fast-track approvals and defer developer charges.
It also wants temporary stamp duty exemptions for new homes in struggling markets and no further property taxes.
“At some point population and household formation growth will put a floor under prices, but in the meantime, we are harmfully shrinking new supply with Federal tax change after change.”
Want to see more stories from trusted news sources?
Make Smart Property Investment a preferred news source on Google.
Click here to add Smart Property Investment as a preferred news source.
