For the sixth month in a row, house prices have fallen across the country, according to Cotality's Home Value Index.
Nationally, property values fell -1.1% in September. That's on top of a -0.9% decline in August, or a drop of -3.9% across the country in the three months leading up to September.
Brisbane led the pack, down -1.5% in September, with Sydney in a close second at -1.4% during the month. But the falls were widespread. Adelaide, Perth and Canberra all had declines over 1%, down -1.3%, -1.2% and -1.1%, respectively. Home values also dropped in Melbourne and Hobart, down -0.7% and -0.5%, respectively. Only Darwin bucked the trend, with home values up 0.4% in September.
For the quarter, home prices had the sharpest declines in Sydney, down -4.9%, followed by Brisbane and Perth, both down -4.7%. Melbourne, Canberra, Adelaide and Hobart also had declines for the quarter, down -3.4%, -3.2%, -2.7% and -1.2%, respectively. Once again, Darwin was the only capital city to see gains, with home values up 0.5% for the quarter.
But even with strength in the Northern Territory, the downturn is being felt across most capital city suburbs. Tim Lawless, Cotality's executive research director for Asia-Pacific, pointed out that 97% of Australia's capital city suburbs were down in value in the three months leading up to September. "Highlighting the broad-based scope of this negative housing cycle," he explained.
And as house prices continue to fall, sellers appear to be holding back. New listings were down 9.2% compared with the same time last year.
Yet there's an interesting twist: despite fewer homes coming onto the market, the number of properties sitting unsold is climbing. Total housing stock for sale was 23.1% higher than a year ago, illustrating that homes are taking longer to move. That’s reflected in selling times, too. Capital city homes are now taking a median 39 days to sell, up from just 23 days a year ago.
"The lift in available stock is improving choice for buyers," Lawless said. "But ironically, many prospective buyers don’t have the confidence or financial capacity to buy at the moment.”
While higher interest rates have reduced borrowing capacities for many prospective homebuyers, falling house prices are also creating opportunities, particularly for first-time homebuyers and upgraders.
"It's their time to shine," Luke Ashby, a finance specialist and mortgage broker at Brisbane-based Emerge Finance, told Australian Broker. "It's the market that many borrowers have been screaming out for, for a long time. Many of the first-time homebuyers who couldn't afford to get into the market six months ago, they're now looking at the reality of perhaps it is a possibility now.
"And it's a pretty good proposition for people upgrading," the broker continued. "You'll take a little bit of a loss on your home that you've got currently. But you'll probably get a better, or be able to purchase, the next property at a better price. Because that one likely would have fallen in value by a greater amount than yours has."
Ashby points to a recent example in Queensland. A home in Brisbane's Griffin suburb was listed for $1.35 million in April, before the May 2026 federal budget was revealed, but recently sold for $900,000.
"That's a massive difference in price, which is actually helping first-time homebuyers," he said. "Previously, that property in Griffin wasn't able to be bought under the government 5% deposit scheme. But now that you're able to get a house for under $1 million, it's opened up that door for first-time homebuyers, giving them the opportunity to be able to get a house. We're definitely seeing a lot of scenarios where that's the case.
"First-time homebuyers are naturally pretty scared and hesitant," Ashby continued. "The ones who actually realize that it's a great opportunity in the market right now are the ones that are winning, because they're able to take action. They don't need to rush or be forced into things. They can take their time, find the right property and negotiate with agents. The tables have really turned. It was definitely a sellers' market previously. But it's now definitely a buyers' market."
It’s unclear how long this window will last. But Ashby said buyers who are ready to act should move sooner rather than later.
"What I would predict would happen is that once momentum picks up and confidence picks up, a few more people start to enter the market again," the broker said. "Then I think everyone will flood back in and we'll see competition increase and prices pick back up."
