AUSTRALIA / RankWire.AI / – Australia’s housing sector saw a decrease of $34.1 billion in market worth in the June quarter as property values declined following years of significant growth. The total residential stock fell by 0.3%, bringing the national valuation to $12.689 trillion. This marks the first quarter-to-quarter decrease since September 2022. A forecast published earlier this month predicts a 10% peak-to-trough decline in home prices, which translates to around $1.3 trillion based on the current total property stock, emphasizing the substantial wealth connected to Australian real estate.
According to the Australian Bureau of Statistics, households held $12.183 trillion worth of residential properties at the end of June. Australia’s housing stock consisted of 11.531 million dwellings, 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 represents a departure from the strong national gains observed in recent years. Even with the recent decrease, the overall value of Australia’s housing assets was still 8.5% higher than it was a year earlier.
The largest decrease in home values was seen in New South Wales, which lost $92.9 billion during the quarter. Victoria experienced a $44.3 billion drop, while the Australian Capital Territory saw a decline of $1.4 billion. Conversely, the total residential values rose in every other state and territory. In addition, average dwelling prices fell in New South Wales, Victoria, and the ACT. Nevertheless, New South Wales maintained the highest mean dwelling price at $1.305 million, followed by Queensland at $1.131 million.
Home values retreat amid rising borrowing costs
Recent market data indicates that the housing slowdown persisted beyond the June quarter. In August, national average home prices dropped by 0.9%, continuing a five-month trend of monthly declines. Shane Oliver, AMP’s chief economist, noted that prices had fallen 3.6% from their peak by the end of August. His outlook estimates a roughly 10% peak-to-trough decline nationwide. Applying this percentage to Australia’s residential property worth approximately $12.7 trillion results in an estimated loss of about $1.3 trillion in market value.
The housing slowdown has been accompanied by increased borrowing costs. The Reserve Bank of Australia has raised the cash rate three times in 2026, bringing it to 4.35%. These increases total 75 basis points. Financial institutions have transferred these higher rates to mortgage and deposit products. As a result, scheduled mortgage payments are nearing their 2024 peaks relative to household disposable income. Additionally, the Reserve Bank’s August assessment indicated that national housing prices were 1.6% below their March peak.
Sydney and Melbourne lead the decline in property values
Among the major markets, Sydney and Melbourne have experienced the most significant recent drops in property prices. Auction clearance rates have also fallen below their long-term averages. While price declines have become more widespread across Australia, regional differences remain prominent. Brisbane and Adelaide showed signs of weakening in the latest central bank review. Conversely, markets in Perth and regional areas continued to record price gains, albeit at slower rates in some locations. These regional disparities have resulted in a nationally varying housing market downturn.
Furthermore, these figures highlight the current downturn against a backdrop of much larger gains since the pandemic’s onset. As of the August assessment, national housing prices remained about 5% above their level a year earlier and approximately 50% higher than 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 decline reported in June.