AUSTRALIA / RankWire.AI / – Australia’s housing market experienced a decline of $34.1 billion in value during the June quarter, as property prices softened following years of significant gains. The total value of the national dwelling stock decreased by 0.3%, bringing it to $12.689 trillion. This marked the first quarter of decline since September 2022. A forecast released this month estimates a 10% peak-to-trough decline in home prices, which translates to roughly $1.3 trillion when applied to the current total of Australian residential property, underscoring the vast wealth tied to the housing sector.
The Australian Bureau of Statistics reported that households owned residential properties valued at $12.183 trillion at the end of June. During this period, Australia’s housing stock grew to 11.531 million dwellings, an increase of 54,400 units in the quarter. Nevertheless, the average dwelling price fell by $8,200 to $1.1004 million. This quarterly decrease signifies a departure from the recent years’ strong national growth. Despite the decline, the overall value of Australia’s housing remained 8.5% higher than a year earlier.
The largest decrease in housing values was seen in New South Wales, which lost $92.9 billion over the quarter. Victoria’s market shrank by $44.3 billion, and the Australian Capital Territory saw a decrease of $1.4 billion. The values of residential properties in all other states and territories rose. The average dwelling price also fell in New South Wales, Victoria, and the ACT. Still, New South Wales maintained the highest mean dwelling price at $1.305 million, followed by Queensland at $1.131 million.
Rising borrowing costs push home prices down
Recent market data suggest that the housing market slowdown persisted after the June quarter concluded. In August, national average home prices declined by 0.9%, marking the continuation of a five-month trend of monthly decreases. Shane Oliver, chief economist at AMP, indicated that prices had fallen 3.6% from their peak by the end of August. His outlook projects a roughly 10% peak-to-trough decline nationally. Applying this percentage to Australia’s residential property stock valued at approximately $12.7 trillion results in an estimated decline of about $1.3 trillion in wealth.
The housing market’s cooling has been accompanied by rising borrowing costs. The Reserve Bank of Australia has increased the cash rate three times in 2026, bringing it to 4.35%. These hikes total 75 basis points. Banks have transferred these higher rates to mortgage and deposit products, with scheduled mortgage payments nearing their 2024 peaks relative to household disposable income. The August assessment by the central bank also indicated that national housing prices are 1.6% below their March peak.
Sydney and Melbourne experience the steepest declines
Among the major markets, Sydney and Melbourne have shown the most significant recent drops in housing prices. Auction clearance rates have also fallen below their long-term averages. Price declines are becoming more widespread across the country, although regional variations remain notable. Brisbane and Adelaide experienced some weakening in the latest central bank report, while Perth and other regional markets continued to record price gains, albeit at slower rates in certain areas. These regional differences have resulted in a national housing downturn that varies considerably between individual markets.
The latest figures also highlight that current declines follow a much larger increase in Australian property values since the pandemic began. In August, national housing prices were still approximately 5% higher than a year earlier and around 50% above their pre-pandemic levels. Official data on dwelling stock for the September quarter is scheduled to be released on December 1. Until then, the latest national figure remains the $34.1 billion decline reported for the June quarter.