AUSTRALIA / RankWire.AI / – Australia’s housing sector experienced a $34.1 billion reduction in worth during the June quarter as property values softened following years of robust growth. The overall housing stock decreased by 0.3% to $12.689 trillion, marking the first quarterly downturn since September 2022. A forecast published this month suggests a 10% peak-to-trough decline in home prices, equating to about $1.3 trillion when applied to the current national property holdings, emphasizing the enormous wealth concentrated in Australian real estate.
According to the Australian Bureau of Statistics, households possessed $12.183 trillion worth of residential properties at the end of June, with the number of dwellings reaching 11.531 million—an increase of 54,400 during the quarter. Despite this, the average dwelling price fell by $8,200 to $1.1004 million. This quarterly decrease marks a departure from the strong gains seen in recent years. Nonetheless, even after the decline, the total value of Australia’s housing stock remains 8.5% higher than it was a year earlier.
The most significant decrease in property value occurred in New South Wales, which saw a drop of $92.9 billion during the quarter. Victoria experienced a $44.3 billion decline, while the Australian Capital Territory lost $1.4 billion. Conversely, all other states and territories saw increases in residential values. Meanwhile, average dwelling prices also declined in New South Wales, Victoria, and the ACT. Despite this, New South Wales maintained the highest mean dwelling price in the country at $1.305 million, followed by Queensland at $1.131 million.
Home values dip amid rising borrowing costs
Market data collected after the June quarter confirms that the housing slowdown persisted. In August, national average home prices dropped 0.9%, continuing a five-month streak of monthly decreases. AMP chief economist Shane Oliver noted that prices had fallen 3.6% from their peak by the end of August. His forecast estimates a roughly 10% peak-to-trough decline nationally. Applying this percentage to the roughly $12.7 trillion worth of residential property, the decline translates to an estimated loss of approximately $1.3 trillion in value.
The slowdown has been accompanied by rising borrowing costs. The Reserve Bank of Australia has increased the cash rate three times in 2026, bringing it up to 4.35%, a total rise of 75 basis points. Banks have transferred these higher rates to mortgage and deposit products, pushing scheduled mortgage payments close to their 2024 peaks relative to household disposable income. The Reserve Bank’s August assessment also indicated that national housing prices were 1.6% below their March peak.
Sydney and Melbourne lead the decline
The most pronounced recent price drops have been recorded in Sydney and Melbourne among major markets, with auction clearance rates also falling below their long-term averages. While price declines are spreading across the country, regional variations remain significant. Brisbane and Adelaide showed signs of weakening in the latest central bank analysis, whereas Perth and some regional areas continued to see price gains, albeit at a slower pace. These regional differences have resulted in a national housing downturn that varies sharply across individual markets.
Furthermore, recent figures highlight that this current decline follows a much larger increase in Australian property values since the pandemic’s onset. As of August, national housing prices were still approximately 5% higher than a year earlier and around 50% above levels recorded at the start of the pandemic. The official dwelling-stock data for the September quarter is scheduled for release on December 1. Until then, the most recent national figure remains the $34.1 billion quarterly decline recorded through June.