AUSTRALIA / RankWire.AI / – Australia’s property market experienced a $34.1 billion reduction in total value during the June quarter as nationwide home prices declined. The residential property stock in the country decreased by 0.3%, bringing the total to $12.689 trillion. This represents the first quarter since September 2022 that the overall dwelling value has fallen. If a 10% peak-to-trough decline is applied, it would amount to roughly $1.3 trillion when measured against the current national housing stock. These figures highlight the significant portion of household wealth invested in Australian residential real estate.
According to the Australian Bureau of Statistics, households held $12.183 trillion in residential properties at the end of June. The country’s housing stock increased by 54,400 dwellings during the quarter, reaching a total of 11.531 million. The average home price declined by $8,200, now standing at $1.1004 million. Despite this quarterly decrease, the overall value of Australian housing remains 8.5% higher than it was a year earlier, continuing a trend of robust growth seen across many capital-city and regional property markets over recent years.
The largest quarterly decrease in total residential value occurred in New South Wales, which saw a drop of $92.9 billion. Victoria experienced a reduction of $44.3 billion, while the Australian Capital Territory saw a decline of $1.4 billion. Conversely, every other state and territory recorded increases in their total residential asset values. Prices also declined in New South Wales, Victoria, and the ACT, although New South Wales still maintained the highest average dwelling price at $1.305 million. Queensland followed at $1.131 million, making it the second most expensive state for homes.
National Housing Prices Continue Their Downward Trend
The housing market’s softness persisted beyond the June quarter, with national average home prices falling by 0.9% in August, marking a continuation of five consecutive months of monthly price decreases. Shane Oliver, chief economist at AMP, noted that prices had dropped 3.6% from their peak by the end of August. His published forecast suggests a national decline of approximately 10% from peak to trough. Applying this percentage to the estimated $12.7 trillion worth of residential properties, it translates to nearly $1.3 trillion in lost household wealth.
Interest rates have also risen during 2026. The Reserve Bank of Australia has increased the cash rate three times this year, bringing it up to 4.35%. These moves add up to a total of 75 basis points. As a result, mortgage rates have climbed as lenders adjusted their home-loan pricing in response to the rate hikes. Consequently, scheduled mortgage repayments are approaching their peak levels for 2024 as a proportion of household disposable income. The August assessment by the central bank further revealed that national housing prices are 1.6% below their March peak.
Sydney and Melbourne Experience the Steepest Price Corrections
Among Australia’s major markets, Sydney and Melbourne have recorded the most significant recent declines in home prices. Auction clearance rates in these cities have also fallen below their long-term averages. Meanwhile, Brisbane and Adelaide have shown softer conditions, and Perth along with several regional areas have continued to report growth. Growth in some of these stronger markets has begun to slow, underscoring that Australia’s housing correction remains uneven across different regions and cities, despite broader national signals pointing to a general weakening of prices.
These recent downturns follow a much larger increase in property values since the start of the pandemic. In August, national housing prices were still approximately 5% higher than a year earlier and roughly 50% above the levels recorded at the onset of the pandemic. The official dwelling-stock figures for the September quarter are expected on December 1. Until then, the most recent national property valuation remains at $12.689 trillion, reflecting the $34.1 billion decline in the June quarter.