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Australian Property Market – Prices, Trends, Forecast [September 2026]

A fifth consecutive monthly decline has pulled Australia’s housing market into a broad correction, making the slowdown more consequential than weakness limited to selected capitals. The national shift affects the pricing environment across the housing system, even though conditions still vary sharply by place and property type.

That breadth matters because lower values are colliding with constrained borrowing capacity, tight rental availability and insufficient new construction. Softer demand may temper competition, but persistent housing scarcity continues to shape both the correction and its wider economic significance.

Key Takeaways

Values are retreating, with the national Home Value Index down 0.9% in August for its fifth consecutive monthly fall and 3.6% below the March 2026 peak.
Houses weakened faster, falling 1.1% in August compared with a 0.5% decline for units.
Sales demand contracted, with the quarterly estimate 15.5% below a year earlier and 11.5% under the five-year average.
Rental pressure persists, as rents rose 5.7% annually while the national vacancy rate reached 1.9% in August.
Downward pressure is likely, although insufficient new supply, relatively low unemployment and first-home buyer support should limit the correction.

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Month

Quarter

Annual

Total Return

Median Value

Cotality Home Value Index, Released on 1st September 2026

Table of Contents

Sydney

Market performance: Sydney recorded the sharpest capital-city decline over the month and winter quarter, with houses weakening more than units and annual performance moving firmly into negative territory across the broader market.
Key Insights: Elevated advertised supply, slower selling conditions and reduced transaction activity shifted negotiating power toward buyers, while outer western and south-western districts showed greater resilience.

Melbourne

Market Performance: Across Melbourne, dwelling values continued to retreat over the month and winter quarter, extending the city’s longer-running weakness as houses underperformed units across monthly and annual measures.
Key Insights: Relative strength was concentrated in selected north-western and western districts, while several other areas remained softer; unit rental yields also compared favourably with those in other large capitals.

Brisbane

Market Performance: Although Brisbane values declined through the month and winter quarter, annual growth remained strong, with units outperforming houses over the year after matching their monthly movement across the market.
Key Insights: A pronounced slowdown in sales activity tempered conditions, yet the strongest local gains remained concentrated across western, Logan, Ipswich and Moreton Bay districts, highlighting persistent geographic variation overall.

Adelaide

Market Performance: Values in Adelaide eased over the month and quarter but retained solid annual growth, with house and unit performance remaining closely aligned across the main reporting periods overall.
Key Insights: A notably tight rental market supported continuing rent growth, while comparatively modest value declines and broad gains across northern, southern and central districts showed a relatively balanced market.

Perth

Market Performance: After leading annual growth among the capitals, Perth shifted into decline over the month and winter quarter, although both houses and units remained substantially stronger than a year earlier.
Key Insights: Investor appeal remained supported by comparatively strong rental growth and yields, while slowing transaction activity contrasted with continued resilience across outer southern, eastern and north-western districts during the latest period.

Canberra

Market Performance: Renewed weakness placed Canberra among the softer capitals over the month and winter quarter, with annual values slightly lower and houses declining faster than units across the broader market.
Key Insights: Weston Creek and Tuggeranong were comparatively resilient as northern and southern districts weakened, while subdued unit rent growth contrasted with relatively attractive rental yields overall.

Hobart

Market performance: Hobart’s market was broadly stable through winter despite a small monthly decline, with annual growth remaining positive and units outperforming houses over the latest quarter across the broader market.
Key insights: A clear divide persisted beneath the headline result: northern districts recorded stronger annual gains than the inner city, while relatively healthy rental yields added support for investors overall.

Darwin

Market performance: Standing apart from the broader downturn, Darwin values rose over both the month and winter quarter, remained at a record high and retained strong annual momentum across dwellings.
Key insights: Rental conditions reinforced that relative strength, with leading rent growth and the highest capital-city yields, while gains were shared across the city, suburbs and Palmerston over the same period.

Australian Property Market Trends

Australian dwelling values fell for a fifth consecutive month in August, with the national index declining 0.9% as the downturn spread across 93% of capital-city suburbs. Weakness remained more pronounced in the capitals, while regional markets recorded smaller declines and retained stronger annual growth.

Monthly dwelling-value change	Quarterly dwelling-value change	Annual dwelling-value change	National median dwelling value
-0.9%	-3.1%	2.7%	$912,885

Combined-capital values fell 1.1% during August, compared with a smaller 0.4% decline across combined regional markets.

Buyer and Seller Conditions

As demand has weakened, advertised stock has accumulated, homes are taking longer to sell and auction clearance rates remain below 50%. Buyers therefore have greater choice and negotiating scope, while vendors face pressure to price realistically and allow longer selling periods.

Long-Term Home Value Performance

Here are the key takeaways from the latest value trends across capitals and regions, showing long-term growth, recent momentum, and where each market sits in the cycle

National dwelling values were 3.6% below their March 2026 peak, confirming that the recent downturn has unwound only part of earlier growth.
Sydney was furthest below its peak at 7.1%, followed by Melbourne at 6.8% and Canberra at 5.2%.
Perth was the strongest five-year capital-city market, rising 79.7%, while Melbourne was the weakest and the only capital below its five-year level, down 3.9%.
Brisbane led capital-city growth over ten years at 111.8%, while Melbourne recorded the weakest result at 26.6%.
Combined regionals outperformed combined capitals over five and ten years and remained considerably closer to their recent peak.
Regional WA led five-year regional growth at 85.4%, while Regional Tasmania was strongest over ten years at 120.8%; Regional Victoria was weakest over both periods.
Darwin and Regional SA were the only markets identified as being at record highs.

Region	From peak	Peak date	Past 5 years	Past 10 years
Sydney	-7.1%	Feb-26	5.6%	44.4%
Melbourne	-6.8%	Mar-22	-3.9%	26.6%
Brisbane	-2.7%	May-26	64.1%	111.8%
Adelaide	-1.6%	May-26	64.0%	107.1%
Perth	-3.2%	Apr-26	79.7%	102.6%
Hobart	-1.1%	Mar-22	11.5%	93.5%
Darwin	<at peak>		30.6%	34.0%
Canberra	-5.2%	May-22	6.3%	58.8%

Regional NSW	-1.8%	Apr-26	24.5%	92.6%
Regional Vic	-1.4%	May-26	13.2%	79.0%
Regional Qld	-1.3%	May-26	58.1%	112.4%
Regional SA	<at peak>		76.0%	106.2%
Regional WA	-0.2%	May-26	85.4%	112.2%
Regional Tas	-0.2%	Jun-26	32.4%	120.8%

Combined capitals	-4.6%	Mar-26	19.5%	57.7%
Combined regionals	-1.2%	May-26	38.6%	99.4%
National	-3.6%	Mar-26	23.9%	66.5%

Cotality Home Value Index, Released on 1st September 2026

Rental Market Conditions

National rents rose 0.4% in August and 5.7% over the year. The monthly increase matched July and remained broadly in line with the average pace of the previous two years, indicating stable rather than accelerating growth. Although the vacancy rate increased, rental availability remained historically tight and continued to support rent increases. Rising rents and falling dwelling values lifted the national gross yield to 3.79%, improving income returns for investors while renters faced sustained affordability pressure. Yields across the larger capitals remained below levels generally required to offset elevated holding costs.

Annual national rental growth: 5.7%
National vacancy rate: 1.9%, compared with the pre-COVID decade average of 3.3%
Gross rental yields: National 3.8%; combined capitals 3.6%; combined regionals 4.3%

Darwin recorded the strongest annual rental growth for houses at 12.0% and units at 10.5%. Canberra recorded the weakest results at 4.0% and 1.4%, respectively.

Australian Property Clock Update

Each month, independent property valuation firm Herron Todd White (HTW) publishes a residential property report that assesses the performance of Australia’s 50 largest markets. HTW’s Property Clock grades each market based on current and predicted performance to determine whether it’s rising, falling, peaking or bottoming out.

HTW August 2026 Houses Property Clock

Where House Markets Sit in the Cycle

Rising markets remain geographically broad: Darwin and Hobart sit in the rising phase alongside Albany, Gold Coast, Newcastle and several resource-linked regional centres.
Late-cycle conditions are prominent: Adelaide and Canberra are approaching peak, Perth is at peak, with Sunshine Coast and Townsville approaching peak and Toowoomba at peak.
Capital-city weakness is concentrated: Brisbane is starting to decline, while Melbourne and Sydney are declining; Alice Springs, Illawarra and Launceston are also starting to decline.
Lower-cycle positions remain mixed: Port Macquarie is approaching bottom, Ballina/Byron Bay and Southern Highlands are at bottom, while Bathurst, Central Coast and Geelong are starting recovery.

HTW August 2026 Units Property Clock

Where Unit Markets Sit in the Cycle

Rising conditions remain broad: Darwin and Hobart sit in the rising phase alongside Gold Coast, Mackay, Townsville, Esperance and Karratha.
Late-cycle positions are prominent: Adelaide and Perth are approaching peak, while Albury, Bundaberg, Burnie/Devonport and Toowoomba sit at peak.
Early declines are concentrated: Brisbane and Sydney are starting to decline alongside Alice Springs, Illawarra and Launceston; no market is listed as declining.
Lower-cycle positions are mixed: Canberra and Melbourne are starting recovery, Port Macquarie approaches bottom, while Ballina/Byron Bay and Southern Highlands sit at bottom.

Australian Property Market Forecast

Looking ahead, the bias remains towards further national value declines over coming months. Higher-rate risk, negative real wage growth, pessimistic sentiment, normalised population growth and a gradually loosening labour market are expected to soften demand.

Against that drag, new housing supply remains insufficient relative to underlying demand as construction costs, capacity limits and feasibility challenges restrict delivery. Low unemployment should also reduce the likelihood of widespread distressed selling.

Targeted first-home buyer support may assist activity at the more affordable end. These offsets should limit the magnitude of the correction rather than reverse its near-term direction.

The Australian banks forecast (Reviewed September 2026):

ANZ expects capital-city prices to decline in both 2026 and 2027. ANZ forecast coverage
CBA expects further national price declines before a modest recovery during 2027. CBA housing outlook
NAB forecasts lower prices across the eight capital cities in 2026. NAB Housing Monitor
Westpac’s June forecast anticipates flat prices in 2026 and growth in 2027, although its September update warns of further downside. June Housing Pulse, September housing update

Bank	Overall price forecast	City forecasts
ANZ	Capital cities: −4.3% in 2026, −3.4% in 2027; −10.6% peak to trough	Peak to trough: Sydney −14.5%; Melbourne −12.8%; Brisbane −7.9%; Adelaide −9.8%; Perth −5.2%.
CBA	National: approximately −9% peak to trough; +2% in 2027, partly dependent on expected rate cuts	Peak to trough: Sydney approximately −13%; Melbourne −12%; Brisbane, Perth and Adelaide −8% each.
NAB	Eight capitals: −5% in 2026	Sydney and Melbourne approximately −10% each; mid-sized capitals −2% to −4%.*
Westpac	Five major capitals: 0% in 2026, +3% in 2027	2026: Sydney −3%; Melbourne −4%; Brisbane +9%; Adelaide +7%; Perth +13%; Hobart +1%. 2027: Sydney +2%; Melbourne +5%; Brisbane +3%; Adelaide +4%; Perth +5%; Hobart +3%.

NAB’s city forecasts are referenced for both 2026 and peak-to-trough periods.

For the remainder of 2026 and into 2027, this means:

A softer near-term outlook: The bank updates point to continued pressure on property prices, replacing the earlier expectation of broadly rising values. NAB.
Different conditions between cities: Sydney and Melbourne face the largest forecast declines in CBA’s outlook, although weakness has also spread to Brisbane, Perth and Adelaide. CBA.
Borrowing costs remain important: The timing and strength of any recovery depend partly on interest rates. CBA’s forecast for modest growth in 2027 assumes rate cuts during that year. CBA.
More negotiating room for buyers: Westpac reports rising listings and expects buyers to have greater bargaining power in many markets heading into spring. This is an interpretation of market conditions, not a guarantee for individual properties. Westpac.

Conclusion

Australia’s broader market is moving through a reset that exposes the limits of affordability and household borrowing capacity. Tight rental conditions add pressure even as dwelling values ease.

Insufficient construction and relatively low unemployment should constrain the downturn’s depth. The near-term direction is softer, but persistent housing scarcity will continue to shape the national property market.

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