AUSTRALIA / RankWire.AI / – Australia’s property sector saw a $34.1 billion reduction in market worth during the June quarter as housing prices began to slip after years of robust growth. The national residential stock decreased by 0.3% to $12.689 trillion. This marks the first quarterly decrease since September 2022. A forecast published this month suggests a 10% peak-to-trough decline in home prices, which translates to roughly $1.3 trillion when applied to the current total property holdings, underscoring the significant amount of wealth tied up in Australian real estate.
The Australian Bureau of Statistics reported that households held $12.183 trillion worth of residential properties at the end of June. The country’s housing stock reached 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 marks a departure from the strong gains seen in recent years. Nonetheless, even after this decrease, the total value of Australia’s housing remains 8.5% higher than it was a year earlier.
In the latest figures, New South Wales experienced the largest drop, losing $92.9 billion in value over the quarter. Victoria saw a decline of $44.3 billion, while the Australian Capital Territory decreased by $1.4 billion. Meanwhile, all other states and territories recorded increases in residential values. The average dwelling price in New South Wales was still the highest in the country at $1.305 million, with Queensland close behind at $1.131 million.
Home values retreat as borrowing costs climb
Recent data indicates that the housing market slowdown persisted beyond the June quarter. In August, national average home prices fell by 0.9%, marking the continuation of a five-month trend of monthly declines. Shane Oliver, AMP’s chief economist, noted that prices had dropped 3.6% from their peak by the end of August. His forecast projects an approximate 10% decline from peak to trough across the country. Applying this percentage to the estimated $12.7 trillion worth of residential properties results in a potential loss of about $1.3 trillion in market value.
This slowdown has been accompanied by rising borrowing costs. The Reserve Bank of Australia increased the cash rate three times in 2026, reaching 4.35%. These hikes amount to a total of 75 basis points. Lending institutions have passed these higher rates onto mortgage and deposit products. As a result, scheduled mortgage payments are nearing their 2024 peaks relative to household disposable income. Additionally, the Reserve Bank’s August review indicated that national housing prices are currently 1.6% below their March peak.
Sydney and Melbourne Lead the Decline in Housing Prices
Among the major markets, Sydney and Melbourne have experienced the most significant recent drops in housing prices. Auction clearance rates have also fallen below their historical averages. The decline in prices has become more widespread across Australia, although regional variations remain substantial. Brisbane and Adelaide have shown some weakening in the latest central bank assessment, while Perth and other regional areas continue to record price gains, albeit at slower rates in certain regions. These disparities have resulted in a national downturn that varies considerably between individual housing markets.
Furthermore, the latest figures highlight that this decline follows a much larger increase in Australian property values since the pandemic began. As of August, national housing prices remained roughly 5% higher than a year earlier, and approximately 50% above levels seen at the start of the pandemic. Official data for the September quarter will be released on December 1. Until then, the most recent national figure remains the $34.1 billion drop in value recorded through June.