AUSTRALIA / RankWire.AI / – Australia’s property sector saw a decrease of $34.1 billion in value during the June quarter, as property prices waned following years of significant growth. The total value of the nation’s dwelling stock shrank by 0.3%, bringing it to $12.689 trillion. This marks the first quarter-on-quarter dip since September 2022. The forecast of a 10% peak-to-trough decline in home prices, published this month, equates to roughly $1.3 trillion when applied to the current national property portfolio, underscoring the vast amount of wealth associated with Australian real estate.
According to the Australian Bureau of Statistics, Australian households held $12.183 trillion worth of residential property at the end of June. The country’s housing stock comprised 11.531 million dwellings, reflecting an increase of 54,400 during the quarter. Nonetheless, the average dwelling price dropped by $8,200, now standing at $1.1004 million. This quarterly decline marks a shift from the strong national gains observed in recent years. Despite the reduction, the total value of Australia’s housing market remained 8.5% higher than it was a year earlier.
The most significant decrease in housing values occurred in New South Wales, which lost $92.9 billion during the quarter. Victoria experienced a $44.3 billion decline, while the Australian Capital Territory saw a decrease of $1.4 billion. Conversely, all other states and territories experienced growth in residential values. The average dwelling price also fell in New South Wales, Victoria, and the ACT. Despite this, New South Wales maintained the highest average dwelling price in the country at $1.305 million, followed by Queensland at $1.131 million.
Rising borrowing costs drive retreat in home prices
Recent market data indicates the housing slowdown persisted beyond the June quarter. In August, national average home prices declined by 0.9%, extending 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 outlook suggests a roughly 10% peak-to-trough decline nationwide. Applying this percentage to the estimated $12.7 trillion worth of residential property results in an approximate loss of $1.3 trillion in total value.
The housing market’s slowdown has been accompanied by higher 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. Financial institutions have passed these rate increases to mortgage and deposit products. As a result, scheduled mortgage repayments have approached their 2024 peaks 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 in housing prices
Among the major markets, Sydney and Melbourne have experienced the most substantial recent drops in housing prices. Auction clearance rates have also dipped below their historical averages. Price decreases are now more widespread across the country, although regional variations remain significant. Brisbane and Adelaide saw weakening in the latest central bank assessment, while Perth and some regional markets continued to record price increases, albeit at slower rates. These regional disparities have resulted in a national downturn that varies considerably between individual housing markets.
The latest data also highlight that the current decline follows a much larger surge in Australian property values since the pandemic began. As of August, national housing prices were roughly 5% higher than a year earlier. They were also approximately 50% above levels recorded at the pandemic’s start. Official dwelling-stock figures for the September quarter are scheduled to be released on December 1. Until then, the most recent national data show a $34.1 billion decrease in value during the June quarter, reflecting ongoing market adjustments.