AUSTRALIA / RankWire.AI / – Australia’s housing sector experienced a decline of $34.1 billion in value during the June quarter as property prices eased after several years of substantial growth. The total value of the national dwelling stock decreased by 0.3%, now standing at $12.689 trillion. This marks the first decline in quarterly terms since September 2022. A forecast released this month suggests a potential 10% peak-to-trough decrease in home prices, which would translate to approximately $1.3 trillion when applied to the current national property holdings. This figure underscores the vast amount of wealth tied to Australian real estate.
According to the Australian Bureau of Statistics, households owned residential properties valued at $12.183 trillion at the end of June. The country had a total of 11.531 million dwellings, an increase of 54,400 during the quarter. Despite this, the average dwelling price dropped by $8,200, now totaling $1.1004 million. The quarterly decrease signals a shift from the strong gains seen in recent years. Nonetheless, even after the decline, the total value of Australia’s housing remains 8.5% higher than it was a year earlier.
The most significant decline was observed in New South Wales, which saw a loss of $92.9 billion in dwelling value over the quarter. Victoria experienced a $44.3 billion decrease, while the Australian Capital Territory’s loss was $1.4 billion. Other states and territories reported increases in residential values. The average dwelling prices also fell in New South Wales, Victoria, and the ACT. Despite this, New South Wales maintained the highest mean dwelling price in the country at $1.305 million, followed by Queensland at $1.131 million.
Rising Borrowing Costs Contribute to Falling Home Prices
Recent market data indicates that the housing market slowdown persisted beyond the June quarter. In August, national average home prices dropped by 0.9%, continuing a five-month streak 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 projects a roughly 10% decline from peak to trough across the country. When applied to a residential property stock valued at around $12.7 trillion, this percentage results in an estimated $1.3 trillion loss in value.
The slowdown has been accompanied by increasing borrowing costs. The Reserve Bank of Australia has raised the cash rate three times in 2026, bringing it up to 4.35%. These increases total 75 basis points. Banks have passed these higher rates onto mortgage and deposit products. As a result, scheduled mortgage payments are now close to their 2024 peaks relative to household disposable income. The August assessment from the central bank also indicated that national housing prices are 1.6% below their March peak.
Sydney and Melbourne Experience Largest Price Declines, While Other Regions Show Mixed Trends
Among Australia’s major markets, Sydney and Melbourne have seen the most significant recent decreases in housing prices. Auction clearance rates have also fallen below their long-term averages. Price declines are becoming more widespread across the country, although regional differences remain prominent. Brisbane and Adelaide showed signs of weakening in the latest central bank review. Meanwhile, Perth and some regional markets continued to see price gains, albeit at a slower pace in certain areas. These regional disparities have resulted in a national downturn that varies sharply between individual housing markets.
The latest data also highlight that the current decline follows a much larger increase in Australian property values since the pandemic began. As of August, national housing prices were still approximately 5% higher than a year earlier. They were also around 50% above levels from the start of the pandemic. The official dwelling-stock data for the September quarter will be released on December 1. Until then, the latest national figure remains the $34.1 billion decline recorded in the June quarter.