Home values post their biggest monthly fall since 2022 — and the market has split in two

Australia's housing downturn has deepened. National home values fell 0.4% in June — the largest monthly decline since December 2022 — taking the quarterly fall to 0.7%, according to property data group Cotality (formerly CoreLogic). The national index is now confirmed to have peaked in March 2026, and the mid-July data shows the softening carrying into winter, with vendor discounting widening and clearance rates stuck around the 50% mark.

But the national number hides the real story: Australia is running two housing markets at once. The big south-eastern capitals are falling — Sydney is down 3.2% for the quarter and 3.7% from its January peak — while Perth, Brisbane, Darwin and Hobart are still rising. Here is the city-by-city picture, and what it means whether you are buying, selling or holding.

The June numbers, city by city

City	June	Quarter	Annual	Median value
Sydney	−1.2%	−3.2%	+0.3%	$1,265,608
Melbourne	−1.0%	−2.6%	−0.9%	$808,486
Brisbane	+0.3%	+1.3%	+17.4%	$1,118,306
Adelaide	0.0%	+1.3%	+11.6%	$945,868
Perth	+0.7%	+2.0%	+23.9%	$1,046,551
Hobart	+0.6%	+1.4%	+9.3%	$752,760
Darwin	+1.4%	+5.0%	+19.8%	$638,187
Canberra	−0.6%	−1.3%	+2.9%	$885,254

Source: Cotality Home Value Index, June 2026. National median $937,722; national annual growth +7.3%.

The gap is stark. Perth has now risen almost 24% in a year and Brisbane more than 17%, while Melbourne's annual growth has turned negative and Sydney's has all but flattened. Darwin — the smallest capital market — was June's strongest performer at +1.4% for the month and +5.0% for the quarter. Even the direction of revisions tells the story: Cotality revised its May figures down most sharply in the very cities that had been running hottest, which its research director Tim Lawless described as the mark of "a market that is changing rapidly."

Why demand is thinning

Three forces are pressing on prices at once. Interest rates have risen three times this year, taking the cash rate to 4.35% and cutting what buyers can borrow. Affordability was already stretched before those hikes. And the federal budget's investor tax changes — now law — have added a new note of caution to the investor segment. As Lawless put it: "Even before interest rates rose by seventy-five basis points, we were seeing affordability hurdles weighing on buyer demand. Higher cost-of-living pressures, deeply pessimistic sentiment and a further dampening of demand via property taxation changes announced in the federal budget are all contributing."

The demand slowdown is visible in volumes, not just prices. Capital-city home sales over the three months to June were about 16% lower than a year earlier and 14.5% below the five-year average. Meanwhile the supply side has loosened: total capital-city listings are about 7.7% higher than a year ago, the median vendor discount has widened to 3.6%, and auctions' share of new listings has fallen from roughly 45% late last year to just over 30% as vendors switch to private treaty. Fewer buyers, more stock, deeper discounts: that is what a buyer's market looks like on paper.

What it means for buyers

Buyer leverage is the strongest it has been in years, especially in Sydney, Melbourne and Canberra where values are actually falling. Negotiating room is real: with a 3.6% median discount, the asking price is a starting point, not a floor. Pre-auction offers are being entertained, and passed-in properties frequently return as negotiable private sales.

The discipline is knowing your suburb, because citywide averages are doing a lot of lying right now. A falling Sydney still contains rising pockets, and a booming Perth contains cooling ones. Check the verified median, growth and days-on-market for any suburb you are watching on our suburb profiles, and read the city-level trend on the capital city market pages. Then set your ceiling with the borrowing power calculator before you negotiate, not after.

What it means for sellers

If you are selling in a falling market, the evidence is blunt: overpricing costs more than it used to. Stale listings attract discounts, and the first fortnight of a campaign — when buyer attention peaks — is too valuable to waste testing a hopeful number. Price to the most recent comparable sales, present the property properly, and choose an agent who can show you their negotiation results in this exact market. Start with a free appraisal to ground your expectations, and our selling guide covers the rest — including whether auction or private treaty suits current conditions in your suburb.

If you are in Brisbane, Adelaide, Perth, Hobart or Darwin, conditions remain genuinely strong — but the pace is slowing even there. Brisbane averaged 1.9% monthly growth in the March quarter and just 0.3% in June; Perth slowed from 2.5% to 0.7%. Momentum sellers who assume last summer's pace will meet them in spring are the ones most likely to overprice.

What it means for you

• The peak is in: nationally, values topped out in March 2026 and have drifted 0.7% lower since. Cotality's base case is a gradual decline, not a crash.
• It is two markets: Sydney, Melbourne and Canberra are falling; Perth, Brisbane, Darwin, Hobart and Adelaide are still rising, but more slowly each month.
• Buyers: negotiate off the evidence — sales are down 16%, stock is up, and the median vendor discount is 3.6%.
• Sellers: the first two weeks of your campaign are worth the most; price to current comparables from day one. Begin with a free appraisal.
• Everyone: suburb data beats city averages. Verify the number for your street's market on our suburb profiles before you act on a headline.