AUSTRALIA / RankWire.AI / – Australia’s property sector experienced a decline of $34.1 billion in value in the June quarter as prices began to weaken after years of solid growth. The total value of the nation’s housing stock decreased by 0.3%, bringing it to $12.689 trillion. This marks the first quarterly drop since September 2022. A forecast published this month projects a 10% peak-to-trough decline in home prices, which translates to roughly $1.3 trillion when applied to the current national property holdings, emphasizing the significant amount of wealth linked to Australian real estate.
According to the Australian Bureau of Statistics, households owned $12.183 trillion worth of residential properties at the end of June. The country had a total of 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 signals a shift away from the strong national gains seen in recent years. Nonetheless, even after this decrease, the overall value of Australia’s housing stock remains 8.5% higher than it was a year earlier.
New South Wales experienced the largest drop in housing value, losing $92.9 billion in the quarter. Victoria saw a decrease of $44.3 billion, while the Australian Capital Territory declined by $1.4 billion. Conversely, the residential values in all other states and territories increased. The average home price also fell in New South Wales, Victoria, and the ACT. Despite the decline, New South Wales still holds the highest mean dwelling price at $1.305 million, with Queensland close behind at $1.131 million.
Home Prices Fall as Borrowing Costs Rise
Recent market data indicate that the housing slowdown persisted beyond the June quarter. In August, national average home prices declined by 0.9%, marking a continuation of five consecutive months of monthly decreases. AMP chief economist Shane Oliver stated that prices had fallen 3.6% from their peak by the end of August. His forecast suggests a roughly 10% peak-to-trough national decline. When applied to the estimated $12.7 trillion worth of residential property, this percentage implies a loss of approximately $1.3 trillion in value.
The housing market downturn has coincided with rising borrowing costs. The Reserve Bank of Australia has increased the cash rate three times in 2026, reaching 4.35%. These rate hikes total 75 basis points. Banks have passed these increases onto mortgage and deposit products, causing scheduled mortgage payments to approach their 2024 peaks relative to household disposable income. The Reserve Bank’s August assessment also revealed that national housing prices are 1.6% below their March peak.
Sydney and Melbourne Lead Price Declines
Among the major markets, Sydney and Melbourne have recorded the largest recent declines in housing prices. Auction clearance rates have also fallen below their long-term averages. While price drops have become more prevalent across Australia, regional differences remain significant. Brisbane and Adelaide experienced some weakening in the latest central bank review. Perth and regional areas continued to see price gains, albeit at a slower pace in certain locations. These varying conditions have resulted in a nationwide downturn that differs sharply between individual housing markets.
The current figures also highlight that the recent decline is set against a backdrop of a much larger increase in Australian property values since the pandemic began. As of August, national housing prices were roughly 5% higher than a year earlier. They also stood about 50% above the levels recorded at the pandemic’s start. Official data on dwelling stock for the September quarter will be released on December 1. Until then, the latest available figure remains the $34.1 billion quarterly loss recorded through June.