Australian home values fell for a seventh consecutive month in October, but the country’s two main property indices disagree on how deep the downturn now runs.
Cotality’s October Home Value Index results recorded a 1.2% national fall, leaving values 6.7% below their March peak. The realestate.com.au Home Price Report, powered by PropTrack, showed a smaller 0.3% decline and a 4.3% drop from the same peak.
The two agree on direction and point to the same pressure: higher mortgage rates are eroding borrowing capacity and keeping buyers cautious. PropTrack expects further price falls, noting that expectations of another rate rise have strengthened ahead of the Reserve Bank of Australia’s (RBA) 3 November meeting.
By Cotality’s measure, the combined capitals have dropped 8.1% in seven months. That is the fastest pace of decline in 40 years, ahead of the 7.0% recorded over the same stretch of the 2022–23 downturn. Brisbane (-2.0%) and Perth (-1.7%) led Cotality’s October falls, followed by Sydney (-1.6%).
PropTrack ranks the month differently, with Adelaide’s 0.6% fall the largest. It puts Brisbane and Perth close to 6% below their peaks, and finds Sydney has overtaken Melbourne with the deepest fall from peak among the capitals, at 6.7% against 6.1%.
“The mid-sized capitals, where home values recorded extreme growth conditions over the past six years, are now well and truly in a correction,” Cotality research director Tim Lawless (pictured left) said.
Cotality noted that most owners in those cities likely retain large equity buffers after the upswing. Its figures show Melbourne values, by contrast, are 7.3% lower than five years ago. That gap matters as softer valuations leave some borrowers unable to refinance.
Cotality estimates home sales over the past three months were 23% lower than a year earlier. The median time on market has stretched to 39 days, the longest since August 2020, and vendor discounts have widened to 4.7%. The slowdown is consistent with Equifax data showing mortgage demand fell 19.2% year on year in September 2026 and with new mortgage lodgements remaining well below January levels.
“In this market buyers have more negotiating power, however higher mortgage rates continue to limit what households can borrow and pay,” realestate.com.au senior economist Eleanor Creagh (pictured right) said.
PropTrack found regional prices slipped just 0.1% in October and remain 3.1% higher than a year ago. They sit 1.4% below their peak, against 5.4% across the capitals. Units have also outperformed houses nationally, falling 0.2% over the year compared with 2.4% for houses.
For first-home buyers and property investors, more choice of stock and stronger bargaining power are being offset by tighter borrowing capacity. Both indices expect subdued conditions to continue into 2027.
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