AUSTRALIA / RankWire.AI / – During the June quarter, Australia’s housing market experienced a decline in value totaling $34.1 billion, as property prices eased following years of substantial growth. The national housing stock decreased by 0.3%, bringing the total to $12.689 trillion. This marks the first quarterly drop since September 2022. A forecast published this month predicts a 10% peak-to-trough decline in home prices, which, when applied to the current property stock, equates to roughly $1.3 trillion in wealth loss, underscoring the considerable assets tied up in Australian real estate.
The Australian Bureau of Statistics reported that households held $12.183 trillion worth of residential property at the end of June. There were 11.531 million dwellings across Australia, an increase of 54,400 during the quarter. Despite this, the average dwelling price decreased by $8,200 to $1.1004 million. The quarterly decline indicates a shift from the strong national gains seen in recent years. Nonetheless, even after this fall, the total value of Australia’s housing remains 8.5% higher than the same period last year.
The largest decline in property values was in New South Wales, which saw a loss of $92.9 billion during the quarter. Victoria experienced a $44.3 billion decrease, while the Australian Capital Territory saw a drop of $1.4 billion. In contrast, all other states and territories saw an increase in residential values. Mean dwelling prices also fell in New South Wales, Victoria, and the ACT. Despite this, New South Wales maintained the highest average dwelling price at $1.305 million, with Queensland following at $1.131 million.
Home values retreat amid rising borrowing costs
Market data released after June indicate that the housing slowdown persisted into August. National average home prices declined by 0.9% in August, marking a continuation of five months of monthly decreases. According to AMP chief economist Shane Oliver, prices had fallen 3.6% from their peak by the end of August. His outlook estimates a roughly 10% peak-to-trough decline in national prices. Applying this percentage to Australia’s residential property stock, valued at approximately $12.7 trillion, suggests a loss of around $1.3 trillion in value.
The slowdown has been accompanied by higher borrowing costs. The Reserve Bank of Australia increased the cash rate three times in 2026, reaching 4.35%, a total increase of 75 basis points. Banks have responded by passing these higher rates onto mortgage and deposit products. As a result, scheduled mortgage payments are nearing their 2024 peak relative to household disposable income. The Reserve Bank’s August assessment also revealed that national housing prices are 1.6% below their March peak.
Sydney and Melbourne Lead the Decline
Among the major markets, Sydney and Melbourne have experienced the most significant recent declines in housing prices. Auction clearance rates have also dipped below their long-term averages. While price drops are increasingly common across the country, regional differences remain substantial. Brisbane and Adelaide showed signs of weakening in the latest central bank report. Meanwhile, Perth and some regional markets continued to see price gains, albeit at a slower pace. These regional disparities have resulted in a national downturn that varies sharply between different housing markets.
The latest figures also highlight that the current decline follows a much larger rise in Australian property values since the start of the pandemic. In the August assessment, national housing prices were roughly 5% higher than the previous year and approximately 50% above pre-pandemic levels. Official dwelling-stock data for the September quarter are scheduled for release on December 1. Until then, the latest national figure remains the $34.1 billion quarterly decline recorded through June.