Home values down 6.7% from peak, on track for worst fall in 40 years

National home values fell 1.2% in October and are now 6.7% below their March peak, according to Cotality’s Home Value Index, reported by ABC News on 2 November. Cotality says the country is on track for its largest downturn in 40 years.

Why it matters

The fall equals about $63,400 off the value of the median Australian dwelling since March, Cotality’s figures show, with the median national house price now $884,855. Capital city values are down 8.1% over seven months. The previous record fall, in 2017-19, was 8.2% across the combined capitals, and this decline is moving faster.

Cotality head of research Gerard Burg said, “This is really a demand-led downturn.” He pointed to higher rates cutting borrowing capacity and lifting repayments, pushing many buyers to the sidelines. The ABC also reported waning investor demand following the federal budget’s changes to property tax breaks.

Burg said buyers would likely hold back until the Reserve Bank signals a change of direction on rates, which he expects not before the latter half of 2027. Domain chief economist Nicola Powell said a 10% fall in the median house price was possible.

For a Brisbane developer, builder or agent, the signal is a finance-constrained buyer pool rather than an oversupplied market. Pre-sale campaigns and settlement timing are where that pressure is likely to show first.

The numbers

Cotality puts home sales over the past three months 23% lower than a year ago and 18% below the previous five-year average. Auction clearance rates across the combined capitals are consistently tracking below 50%.

The median time on market has risen to 39 days, the highest since August 2020. Vendor discounting has widened to 4.7%, the largest since May 2019.

What’s next

The ABC report gives no Brisbane index figure, but notes that virtually every suburb across Brisbane, Perth and Adelaide recorded a fall in values over the past three months. Brisbane Harcourts agent Sam Devlin told the ABC that enquiries at some of his open homes had dropped sharply since the May budget, an anecdotal account rather than data. Brisbane posted the sharpest fall of any capital in September, as we reported.

The Australian Developer will watch Cotality’s November index for whether capital city falls pass the 2017-19 record, and for listing volumes and vendor discounting in Brisbane.