House prices fell in every Australian capital city for the first time in 15 years, according to Domain's September Quarter 2026 House Price report, the second such fall on record. Sydney's prices dropped 4.7% in the quarter to $1.66m, a two-year low. Melbourne fell 3.3% for a third straight quarter to a median of $1.014m, while Perth recorded a record 4.7% drop and Brisbane and Adelaide also logged their steepest falls on record. Domain's Nicola Powell cited higher interest rates, cost-of-living pressures and changes to housing investment tax policy, with buyer confidence weak and homes taking longer to sell. Morgan Stanley economists expect the market to bottom in the second half of 2027, with the downturn potentially reaching 15% from peak to trough.
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Related tickers and likely impact
AUD/USD
▼ Likely negativeRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/21/2026 | 0.70288 |
| Change that session | +0.35% |
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Related news
- House prices down in all Australian capitals in 15 - year first - Xinhua
Domain's report shows house prices fell in all eight Australian state and territory capitals in the third quarter of 2026, the first time in 15 years. The combined capital city median house price dropped 4.7% over the quarter, the largest quarterly decline on record, while unit prices fell 3.5%, marking the second straight quarter of falls. Annual price growth turned negative for the first time in over three years, with Perth recording the steepest declines at 7.4% for houses and 6.5% for units. Domain attributed the downturn to weaker buyer confidence from interest rate rises, cost-of-living pressures and the government's move to wind back investor tax concessions. The Reserve Bank raised the cash rate to a 15-year high of 4.60% at the end of September and will next meet in early November.
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House prices fell across every Australian capital city in the September quarter of 2026, according to Domain, the first such decline in 15 years and only the second time on record. National house prices dropped a record 4.7 per cent, with Perth falling the most at 7.4 per cent, while Sydney's median fell 4.7 per cent to $1.66 million, a two-year low. Housing Minister Clare O'Neill described the fall as part of the market's cycle, while economists mostly attributed it to the Reserve Bank lifting the cash rate to its highest level in 15 years, since Labor's tax changes do not take effect until July 2027. Domain chief residential economist Nicola Powell said prices could keep falling for many months, as confidence will not recover until interest rates are cut, which she expects in the latter part of next year.
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Morgan Stanley now expects national house prices to fall 10–15% from their peak, with a trough in the second half of 2027, which would be Australia's largest nominal housing downturn in over 40 years. Cotality data show prices have already dropped 5.2% since the March peak, meaning the slide could be only one-third complete. The Reserve Bank's four rate rises in 2026 have exceeded expectations, and markets expect at least one more hike. Budget changes to negative gearing and the capital gains tax discount account for only about five per cent of the expected fall. Because construction accounts for about nine per cent of employment, unemployment could rise to 5.1%, while Australia is about 124,000 homes behind its goal of 1.2 million new homes in five years.
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