AUSTRALIA / RankWire.AI / – Australia’s property sector experienced a decline of $34.1 billion in value during the June quarter, as the housing market weakens following years of robust appreciation. The total value of the country’s housing stock decreased by 0.3%, bringing it to $12.689 trillion. This marks the first quarterly drop since September 2022. A forecast published this month suggests a 10% peak-to-trough reduction in home prices, which, when applied to the current total property stock, amounts to roughly $1.3 trillion, underscoring the immense wealth tied 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. The nation had 11.531 million dwellings, reflecting an increase of 54,400 during the quarter. Despite this, the average dwelling price fell by $8,200 to $1.1004 million. The quarterly decline indicates a reversal from the strong gains seen in recent years. Nevertheless, even after this downturn, the total value of Australia’s housing remains 8.5% higher than it was a year ago.
The most significant decrease in property values was observed in New South Wales, which saw a drop of $92.9 billion during the quarter. Victoria experienced a $44.3 billion decline, while the Australian Capital Territory lost $1.4 billion. In contrast, residential values increased in all other states and territories. The average dwelling price also decreased in New South Wales, Victoria, and the ACT. Currently, New South Wales maintains the highest mean dwelling price at $1.305 million, followed by Queensland at $1.131 million.
Housing prices retreat as borrowing costs increase
Recent market data indicates the housing market slowdown persisted after the June quarter concluded. In August, national average home prices declined by 0.9%, marking the fifth consecutive month 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 projects an approximate 10% national decline from peak to trough. Applied to the residential property market valued at about $12.7 trillion, this percentage translates to roughly $1.3 trillion in lost value.
Rising borrowing costs have contributed to the cooling housing market. The Reserve Bank of Australia has increased the cash rate three times in 2026, bringing it to 4.35%. These hikes amount to a total of 75 basis points. Financial institutions have transferred these higher rates to mortgage and deposit products, resulting in scheduled mortgage payments nearing 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 high.
Sydney and Melbourne lead the decline in property values
The largest recent drops in housing prices among Australia’s major cities have been recorded in Sydney and Melbourne. Auction clearance rates have also dipped below their long-term averages. While price declines are spreading across the country, regional differences remain significant. Brisbane and Adelaide experienced weakness in the latest central bank evaluation, whereas Perth and other regional markets continued to record price gains, albeit at slower rates. These regional disparities have resulted in a national housing downturn that varies sharply between individual markets.
The latest data also highlight that current declines follow a much larger increase in property values since the start of the pandemic. As of August, national housing prices were approximately 5% higher than a year earlier and roughly 50% above the levels recorded at the beginning of the pandemic. The official dwelling-stock data for the September quarter is scheduled for release on December 1. Until then, the latest national figure remains the $34.1 billion quarterly decline observed through June.