AUSTRALIA / RankWire.AI / – Australia’s property sector experienced a $34.1 billion reduction in value during the June quarter as property prices weakened following years of strong growth. The national housing stock decreased by 0.3% to $12.689 trillion. This was the first quarter-to-quarter decline since September 2022. A forecast published this month predicts a 10% peak-to-trough decline in home prices, which translates to roughly $1.3 trillion when applied to the current national property holdings, emphasizing the significant wealth linked to Australian real estate.
The Australian Bureau of Statistics reported that households owned $12.183 trillion worth of residential properties at the end of June. Australia’s housing stock comprised 11.531 million dwellings, increasing by 54,400 during the quarter. Despite this, the average dwelling price dropped by $8,200 to $1.1004 million. This quarterly decrease marks a shift from the robust gains seen nationally over recent years. Even after the decline, the total value of Australia’s housing remained 8.5% higher than a year earlier.
The largest decline in housing value occurred in New South Wales, which saw a $92.9 billion drop during the quarter. Victoria experienced a $44.3 billion decrease, while the Australian Capital Territory lost $1.4 billion. Conversely, residential values increased in all other states and territories. Meanwhile, mean dwelling prices fell in New South Wales, Victoria, and the ACT. Despite the declines, New South Wales maintained the highest average home price at $1.305 million, followed by Queensland at $1.131 million.
Home prices retreat as borrowing costs rise
Recent market data indicate the housing slowdown persisted after the June quarter. In August, national average home prices declined by 0.9%, extending a five-month streak of monthly decreases. AMP chief economist Shane Oliver noted that prices had fallen 3.6% from their peak by the end of August. His forecast projects a roughly 10% peak-to-trough decline on a national level. Applying this percentage to the estimated $12.7 trillion worth of residential property indicates a loss of about $1.3 trillion in value.
The housing slowdown has been accompanied by rising borrowing costs. The Reserve Bank of Australia increased the cash rate three times in 2026, bringing it to 4.35%. These increases total 75 basis points. Banks have passed the higher rates onto mortgage and deposit products. As a result, scheduled mortgage payments now approach their 2024 peak relative to household disposable income. The Reserve Bank’s August assessment also indicated that national housing prices are 1.6% below their March peak.
Sydney and Melbourne lead the decline
Sydney and Melbourne have experienced the most significant recent drops in housing prices among Australia’s major markets. Auction clearance rates have fallen below their long-term averages. Price declines have become more widespread nationwide, though regional differences remain substantial. Brisbane and Adelaide showed signs of weakening in the latest central bank review. Perth and regional areas continued to see price gains, albeit at slower rates in some locations. These contrasting trends have resulted in a national housing downturn that varies markedly across different markets.
Recent figures also put the current decline into context with a much larger increase in Australian property values since the pandemic began. In the August assessment, housing prices nationwide were approximately 5% higher than a year earlier. They also remained around 50% above levels recorded at the start 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 recorded through June.