(Aidan Devine’s Post from the REALESTATE.COM.AU on 09 October 2026.)
Australian
house values fall in 82 per cent of suburbs as downturn spreads: A “perfect
storm” of interest rate hikes, war abroad and controversial federal tax reforms
has broadened previous weakness in Australia’s housing market into a wider
downturn that is now touching nearly every suburb.
New
data shows what began as a slump confined to Sydney and Melbourne’s blue-chip
enclaves has morphed into a bigger correction, ripping through working-class
suburbs and coastal hubs alike.
The
analysis of exclusive realestate.com.au figures revealed a staggering 82.2 per
cent of suburbs nationwide recorded average drops in house values over the past
three months. It marks the first full quarter of suburb-by-suburb market data
since sweeping federal budget reforms hit the property sector in May, including
caps on negative gearing.
Just 10.6 per cent of suburbs eked out growth in house values, while 7.1 per cent recorded no change. The past three month represent the first full quarter of sales results since the Labor government’s sweeping tax reforms in the May federal budget.
The pain isn’t limited to stand-alone houses. The unit market has been hammered just as hard, with valuations plummeting in 79.7 per cent of suburbs with available data. About 14 per cent of unit markets nationwide recorded price gains, while 6.3 per cent flatlined. Industry
insiders say the downturn wiped tens of thousands of dollars off backyard
equity in a matter of weeks. Kent Lardner, research director at analytics group
FoundIt, said the causes of the downturn could not be neatly packaged as simply
due to interest rates, or government policy. “It’s a perfect storm,” he said.
The
impact has differed widely across states:
QUEENSLAND
Queensland
homeowners lost up to $244,000 in equity across the suburbs hardest hit by the
downturn. The realestate.com.au data showed nine out of 10 suburbs across the
state recorded home value falls in the September quarter.
“The
impact on prices can be connected to the budget,” said Ray White economist Atom
Go Tian. The unattended consequence we are seeing is first-home buyers and
owner occupiers also pulling back from the market.”
Dwelling
values across Greater Brisbane as a whole fell 0.2 per cent over the month of
September alone, the sixth straight month of falls. Many of the suburbs with
the biggest falls were in Brisbane’s middle-ring areas and there were also
falls across parts of the Logan area, among others.
MELBOURNE
Home
values fell or flatlined in almost every Melbourne suburb and the city downturn
is now widespread. More affordable suburbs appeared to be taking a hit
from rate hikes earlier in the year and often had some of the largest value
drops. Melbourne housing markets are expected to bottom out first.
There
were just 34 out of 400-odd suburbs where house values grew, and many were
top-end suburbs, leading some to speculating a bottom could be in site for the
higher-end of the Melbourne market.
Only
28 suburbs recorded average unit value gains out of more than 280 with
available data — just under one in 10. The handful of suburbs defying the odds
were topped by bayside havens in Melbourne’s southeast.
The
remainder of the top performing areas for houses were heavily skewed towards
outer fringe areas known for their larger allotments and lifestyle locations. REA
Group economist Luc Redman said while declines continued, the numbers behind
the scenes in Melbourne for the past few months could indicate a
“stabilisation”.
“Melbourne
is most likely to see the market bottom out sooner than other areas, as the
ability to service loans in Victoria are a bit better than other parts of the
country,” Mr Redman said.
SYDNEY
Home
value falls were the most widespread across Sydney, which remains the most
interest rate sensitive market in the country. Realestate.com.au data showed
house prices fell across nearly 97 per cent of Sydney suburbs over the past
three months, with only six suburbs recording growth in values.
An
average of more than $90,000 was wiped off home values over the period in close
to 125 areas, or about in five Sydney suburbs. Recent falls were also
widespread across Sydney’s apartment market, which had previously been less
impacted by the slump.
Unit
values dropped in 81 per cent of suburbs with available sales data over the
quarter. Suburbs with some of the largest recent falls in unit prices, ranging
from 8-18 per cent over the quarter, included a range of outer- and middle-ring
areas.
HOBART
Hobart
house prices shrunk in the majority of areas over the three month period, with
suburb falls ranging from 0.1 to 2.2 per cent. The rare areas with increasing
medians were led by city suburbs Lenah Valley and Mount Stuart, according to
the realestate.com.au figures.
ADELAIDE
Less
than 4 per cent of the 462 suburbs across metro Adelaide with house and unit
data recorded value growth over the past quarter. Industry figures like Tom
Panos have said uncertainty over budget changes was affecting demand across all
buyer types. Picture: Richard Dobson
Just
18 of these (3.89 per cent) saw an uptick in value over the quarter, with
another 24 recording no change from July’s report. In what will come as a major
concern to homeowners, but likely presents opportunity to those trying to get
into the market, values decreased in the remaining 420 (90.9 per cent) of
suburbs realestate.com.au had house or unit data for.
