AUSTRALIA / RankWire.AI / – Australia’s property sector experienced a $34.1 billion decrease in value during the June quarter, as home prices softened following years of robust growth. The overall national housing stock decreased by 0.3%, bringing its total to $12.689 trillion. This marked the first quarterly downturn since September 2022. The published forecast of a 10% peak-to-trough decline in home prices this month roughly translates to about $1.3 trillion when applied to the current national property holdings, emphasizing the significant wealth connected to Australian real estate.
According to the Australian Bureau of Statistics, households held $12.183 trillion in residential assets at the close of June. The country had 11.531 million dwellings, reflecting an increase of 54,400 units during the quarter. Despite this, the average dwelling price declined by $8,200 to $1.1004 million. The quarterly decrease signals a departure from the strong gains experienced nationwide in recent years. Nonetheless, even after this fall, the total value of Australia’s housing market remained 8.5% higher than it was a year earlier.
The most significant drop in property value occurred in New South Wales, which lost $92.9 billion over the quarter. Victoria saw a decrease of $44.3 billion, while the Australian Capital Territory experienced a $1.4 billion decline. All other states and territories saw increases in their total residential values. Meanwhile, average dwelling prices also fell in New South Wales, Victoria, and the ACT. Despite this, New South Wales maintained the highest average home price at $1.305 million, with Queensland following at $1.131 million.
Home values decline as borrowing costs climb
Recent market data indicates the housing slowdown persisted after the June quarter concluded. In August, national average home prices dropped by 0.9%, marking a continuation of five consecutive months of monthly price decreases. AMP chief economist Shane Oliver noted that prices had fallen 3.6% from their peak by the end of August. His outlook predicts an approximate 10% decline from peak to trough on a national level. When applied to a residential property stock valued at around $12.7 trillion, this percentage amounts to roughly $1.3 trillion in lost value.
The housing market slowdown has coincided with rising borrowing costs. The Reserve Bank of Australia increased the cash rate three times in 2026, reaching 4.35%. These hikes total 75 basis points. Financial institutions have passed these rate increases onto mortgage and deposit products, causing scheduled mortgage payments to approach their 2024 peak relative to household disposable income. The central bank’s August assessment also revealed that national housing prices were 1.6% below their March peak.
Sydney and Melbourne lead the downturn in property prices
Among Australia’s major markets, Sydney and Melbourne have experienced the most pronounced recent declines in housing prices. Auction clearance rates have also fallen below their historical averages. Price drops are now more common across the country, although regional differences remain significant. Brisbane and Adelaide showed weakening in the latest central bank review, while Perth and other regional areas continued to see price gains, albeit at a slower pace. These regional variations have resulted in a national housing downturn that varies greatly across different markets.
The latest data also contextualize the current decline against a much larger increase in Australian property values since the pandemic. In the August assessment, national housing prices stayed roughly 5% higher than a year earlier, and were approximately 50% above pre-pandemic levels. Official data on dwelling stock for the September quarter is set for release on December 1. Until then, the most recent national figure remains the $34.1 billion quarterly loss recorded in June.