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Brisbane and Perth plunge as 40-year downturn record looms
Brisbane and Perth are bearing the brunt of Australia’s property downturn, as surging listings and weakening investor demand drive prices lower while combined capital city values close in on their worst 40-year fall.
Brisbane and Perth have emerged as the weakest markets in Australia’s latest property downturn, with a surge in listings and a pullback in demand threatening returns in the two cities that had delivered strong growth in recent years.
New data showed Brisbane and Perth have taken the lead in the national downturn, while the combined capitals met a 40-year price fall record.
According to Cotality’s latest Home Value Index, Brisbane’s values fell 2 per cent in October to $1,018,401, while Perth’s declined 1.7 per cent to a median of $942,018.
Both cities fell faster than Sydney, which previously led the downturn, but recorded a lower monthly decline of 1.6 per cent.
Meanwhile, capital city values fell 8.1 per cent in seven months, the fastest decline in the past 40 years.
Cotality’s head of research, Gerard Burg, said the record for price declines across all downturns in the past 40 years, from peak to trough, was 8.2 per cent.
“So we would expect next month to see the largest downturn on record,” he told SPI.
Conditions across mid-sized capitals deteriorate
Burg said that as interest rates rose and affordability pressures worsened, Brisbane and Perth’s growth in past years had likely priced buyers out of the market, triggering a decline in values.
“Both of those cities have really seen this rapid transition through the course of 2026 from a very tight market to a very loose market, and that’s led to this deterioration in values that we’ve seen,” he said.
Following the federal tax changes, investor sentiment has also been drastically impacting Brisbane demand.
The PIPA Annual Investor Sentiment Survey for 2026 found 23.7 per cent of respondents had sold at least one investment property in Brisbane over the previous year, up from 19.7 per cent the year before.
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With listings up 25 per cent above the five-year average, Burg said Brisbane’s market showed the clearest evidence of weakening buyer demand of all the capitals.
“When you compare where things were back at the start of the year, we were close to 45 to 50 per cent below average, so a lot of stock has come onto the market,” Burg said.
Similarly to Brisbane, Perth has also recorded significant price declines, with Domain’s latest data showing the city fell by 7.4 per cent, from $88,664 to $1.115 million over the September quarter.
Despite Perth’s listings being only six per cent above the five-year average, Burg said conditions had changed drastically since mid-January, when available stock was 55 per cent below average.
“Listings have been this enormous movement higher, and it’s really just taken the wind out of the sails,” he said.
Buyers Edge Property director, Jason Titus, said that, similarly to Brisbane, an investor exodus had contributed to the surge in available dwellings on the Perth market.
“Stock levels in Perth in the last three months have skyrocketed because established property investors are moving their money out of Perth and into the affordable market in Victoria,” he said.
Despite the plunge in values, Brisbane and Perth properties were reasonably profitable in the three months to July, according to the PropTrack-Terri Scheer Investor Report 2026.
The data showed that, among the capitals, Brisbane led in profitable resales and median profit, with 99 per cent of properties returning $520,000, and Perth achieving a similar result.
Fastest downturn in 40 years
In the three months to October, national sales fell 23 per cent year-on-year, while slower absorption has pushed capital city listings to their highest level for this time of year since 2019.
Cotality said buyers had much more stock to choose from, giving them more leverage during negotiations and decreasing the urgency to buy.
New listings have especially risen in Adelaide over the spring season, with Burg suggesting the city could soon join Brisbane and Perth if the trend continued.
In October, values in South Australia’s capital were down 1.2 per cent, reaching a median of $916,860.
Despite being overtaken in the pace of price falls, Burg said Sydney still saw significant declines over the past month, plummeting 1.6 per cent.
According to Cotality, sales activity in Sydney was down by 30 per cent compared to last year.
In sharp contrast, Canberra and Melbourne recorded more modest declines, with Canberra down 0.7 per cent, Melbourne down 0.8 per cent over October.
“Compared to Brisbane and Perth, Melbourne has seen fewer new listings for an extended period of time, and the total stock available is now sitting around about three per cent below the five-year average,” Burg said.
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