AUSTRALIA / RankWire.AI / – Australia’s property sector experienced a $34.1 billion decline in value during the June quarter, as property prices softened following years of robust growth. The national dwelling inventory decreased by 0.3%, reaching $12.689 trillion. This marked the first quarter-to-quarter decrease since September 2022. A forecast indicating a 10% peak-to-trough drop in home prices, published this month, equates to roughly $1.3 trillion when applied to the current national housing stock, emphasizing the vast amount of wealth connected to Australian real estate.
According to the Australian Bureau of Statistics, households held $12.183 trillion worth of residential property at the end of June. The country had 11.531 million dwellings, 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 marked a departure from the strong gains observed nationally in recent years. Even with this decrease, the total worth of Australia’s housing assets remained 8.5% higher than a year earlier.
The most significant decrease in dwelling value occurred in New South Wales, which saw a loss of $92.9 billion during the quarter. Victoria experienced a $44.3 billion decline, while the Australian Capital Territory saw a decrease of $1.4 billion. Conversely, total residential values increased in all other states and territories. The mean dwelling price also dropped in New South Wales, Victoria, and the ACT. Nonetheless, New South Wales maintained the highest average home price at $1.305 million, with Queensland following at $1.131 million.
Housing prices retreat amid rising borrowing costs
Recent market data indicates that the housing slowdown persisted beyond 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 projections suggest a roughly 10% peak-to-trough decline nationally, which applied to an estimated residential property stock of about $12.7 trillion, amounts to approximately $1.3 trillion in value loss.
The housing slowdown has coincided with rising borrowing costs. The Reserve Bank of Australia increased the cash rate three times in 2026, reaching 4.35%. These increases total 75 basis points. Banks have passed these higher rates onto mortgage and deposit products. As a result, scheduled mortgage payments have approached their 2024 peak relative to household disposable income. The August assessment by the central bank also revealed that national housing prices were 1.6% below their March peak.
Sydney and Melbourne are the primary markets driving downward pressure
Among the major markets, Sydney and Melbourne have experienced the most significant recent declines in housing prices. Auction clearance rates have also fallen below their long-term averages. Although price declines have become more widespread across the country, regional disparities remain notable. Brisbane and Adelaide showed signs of weakness in the latest central bank report, while Perth and other regional markets continued to record price gains, albeit at a slower pace in some areas. These regional differences have contributed to a national housing downturn that varies sharply between individual markets.
The latest data also highlight that current declines follow a much larger increase in Australian property values since the pandemic. In August, national housing prices remained approximately 5% higher than a year earlier. They were also roughly 50% above the levels recorded at the pandemic’s onset. Official dwelling-stock figures for the September quarter are set for release on December 1. Until then, the most recent national figure remains the $34.1 billion decline reported for the June quarter.