AUSTRALIA / RankWire.AI / – Australia’s property market shed $34.1 billion in value during the June quarter as housing prices weakened after years of growth. The total value of the national housing stock decreased by 0.3%, now standing at $12.689 trillion. This marks the first quarterly drop since September 2022. A forecast published this month predicts a 10% peak-to-trough decline in home prices, which translates to approximately $1.3 trillion when applied to the current property stock. This underscores the significant wealth connected to Australian real estate.
According to the Australian Bureau of Statistics, households held $12.183 trillion worth of residential property at the end of June. Australia’s housing stock included 11.531 million dwellings, an increase of 54,400 during the quarter. Nonetheless, the average dwelling price decreased by $8,200, now at $1.1004 million. The quarterly decline represents a departure from the strong gains seen in recent years. Despite the downturn, the total value of Australian housing remains 8.5% higher than it was a year ago.
New South Wales experienced the largest decrease, losing $92.9 billion in value during the quarter. Victoria saw a $44.3 billion reduction, while the Australian Capital Territory declined by $1.4 billion. All other states and territories reported increases in their residential values. Home prices also fell in New South Wales, Victoria, and the ACT. Despite this, New South Wales still leads with the highest mean dwelling price at $1.305 million, followed by Queensland at $1.131 million.
Rising borrowing costs push home prices downward
Recent market data shows the housing slowdown persisted after June. National average home prices declined by 0.9% in August, marking the fifth consecutive month of declines. AMP chief economist Shane Oliver noted that prices had fallen 3.6% from their peak by the end of August. His outlook estimates a roughly 10% peak-to-trough decrease in national prices. Applied to a housing stock worth around $12.7 trillion, that decline equates to approximately $1.3 trillion in lost value.
The housing slowdown has coincided with higher borrowing costs. The Reserve Bank of Australia increased the cash rate three times in 2026, reaching 4.35%. These hikes total 75 basis points. Banks have passed the increased rates onto mortgage and deposit products. Mortgage payments are now close to their 2024 peaks relative to household disposable income. The RBA’s August assessment also indicated that national housing prices are 1.6% below their March peak.
Sydney and Melbourne experience the largest declines
Among the major cities, Sydney and Melbourne have seen the biggest recent drops in housing prices. Auction clearance rates have also fallen below their long-term averages. Price declines are becoming more widespread across the country, though regional differences remain significant. Brisbane and Adelaide showed signs of weakening in the latest central bank report. Meanwhile, Perth and some regional markets continued to record price gains, though at a slower pace in certain areas. These variations have resulted in a national housing downturn that varies sharply between individual markets.
The latest figures also compare the current decline against the much larger rise in property values since the pandemic began. As of August, national housing prices were about 5% higher than they were a year earlier. They are also roughly 50% above the levels recorded at the start of the pandemic. Official dwelling-stock data for the September quarter will be released on December 1. Until then, the $34.1 billion decline during June remains the latest recorded figure.