In brief
Cotality data shows a 1.2% drop in the national median house price in October, marking the seventh straight month of downward pressure. Brisbane experienced a 2.0% fall, overtaking Sydney as the fastest declining capital. The Reserve Bank of Australia’s rate hikes and other policy moves are cited as key contributors to the slump.
Australian house prices fell 1.2% in October, extending a trend now in its seventh consecutive month, according to new data released by property research firm Cotality (Cotality, 2026-11-02). The decline represents the fastest pace in forty years for national home values, with a 6.7% drop from its March peak.
One of the largest single capital cities, Brisbane, recorded a 2.0% decline in median house prices in October, surpassing Sydney for the first time since the data series began. Sydney’s median price fell 1.4% in October, an acceleration from the 1.2% fall recorded in September.
Across all Australian capitals, the quarterly median price fell 4.5% as shown by Cotality’s latest quarterly analysis.
Cotality’s research director Tim Lawless attributed the downturn to a combination of economic and policy pressures. He cited higher interest rates, persistently low confidence, cost‑of‑living pressures, and a federal government move to reduce tax concessions for property investors as the main headwinds.
Key to the current environment is the Reserve Bank of Australia's Monetary Policy Board decision at the end of September to lift the cash rate target by 0.25 percentage points to a 15‑year high of 4.6%. The board is scheduled to reconvene to discuss the policy rate on Monday and Tuesday, with the four major banks forecasting a potential fifth rise to an 18‑year high of 4.85%.
In the July data from the Australian Bureau of Statistics, the median house price for the nation was 8.09 million Australian dollars. In October, the median fell to 7.99 million, taking the median property off the value of 60,410 Australian dollars from its March peak.
Although the decline is steady, some analysts see this as a stabilization period. Investor sentiment remains subdued, reflecting the high cash rates and expected tightening cycle of monetary policy.
Economic commentators point out that the decline is more pronounced in high‑growth markets such as Brisbane, where the median price drop of 2% is the most significant among capital cities reported this year. The slowdown in Brisbane’s market reflects a broader shift toward more cautious buyer behavior amid rising borrowing costs.
Urban studies suggest that the property market is sensitive to technical changes in mortgage rates; a 0.25 percentage point rise in the cash rate can increase mortgage costs by up to 2% for residential borrowing, which dampens demand.
The Australian Retail Housing Market remains a major component of the national economy, contributing to employment, consumer spending and construction activity. A prolonged decline can influence sectors that rely on real estate activity.
Some government officials have responded with measures to maintain affordability, including targeted tax relief for first‑time buyers. However, these measures are limited compared with the larger tax concession framework currently in place for investors.
Experts in urban economics have long warned that constant rate hikes can quickly erode affordability in cities driven by demand, especially when households already face high living costs due to wage stagnation and pandemic‑era supply chain disruptions.
As the Reserve Bank of Australia faces a difficult balancing act – curbing inflation while preserving growth – the housing market will stay under close scrutiny from both policymakers and investors.
Meanwhile, the National Housing Finance Group continues to monitor home price trends, producing monthly analyses that seek to give a clearer picture of housing affordability over time.
Domestic finance institutions have indicated that household borrowing has slowed, in part due to the tightened credit environment. The percentage of households taking new mortgages fell from 3.8% last month to 3.4% in October, according to the latest credit bureau data.
