AUSTRALIA / RankWire.AI / – Australia’s property sector saw a $34.1 billion reduction in worth in the June quarter, as housing prices softened after years of substantial increases. The total residential stock decreased by 0.3%, bringing it to $12.689 trillion. This marked the first quarter-to-quarter decline since September 2022. A forecast predicting a 10% peak-to-trough drop in home values this month suggests a reduction of approximately $1.3 trillion when applied to the current national property value, emphasizing the extent of wealth concentrated in Australian real estate.
According to the Australian Bureau of Statistics, households held $12.183 trillion worth of residential property at the end of June. The country’s housing stock consisted of 11.531 million dwellings, an increase of 54,400 during the quarter. Despite this, the average home price declined by $8,200 to $1.1004 million. This quarterly dip signals a departure from the robust gains seen in recent years. Nonetheless, the total value of Australia’s housing remains 8.5% higher than it was a year earlier.
The most significant decline was observed in New South Wales, which saw a $92.9 billion drop in dwelling values for the quarter. Victoria experienced a decrease of $44.3 billion, while the Australian Capital Territory lost $1.4 billion. Values increased in all other states and territories. Average dwelling prices fell in New South Wales, Victoria, and the ACT, with New South Wales maintaining the highest mean price at $1.305 million, followed by Queensland at $1.131 million.
Home values retreat as borrowing costs increase
Recent market data indicate the housing slowdown persisted beyond the June quarter. In August, national average home prices declined by 0.9%, continuing a five-month trend of monthly decreases. AMP chief economist Shane Oliver commented that prices had fallen 3.6% from their peak by the end of August. His outlook projects a roughly 10% peak-to-trough decline nationally. Applying this percentage to the roughly $12.7 trillion worth of residential property stock results in an estimated $1.3 trillion loss in value.
The housing downturn 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 total 75 basis points. Financial institutions have passed on these higher rates to mortgage and deposit products. As a result, scheduled mortgage repayments have approached their 2024 peak relative to household disposable income. The August assessment by the central bank also revealed that national housing prices are 1.6% below their March high point.
Sydney and Melbourne lead declines in housing prices
Among Australia’s major markets, Sydney and Melbourne have experienced the most significant recent drops in housing prices. Auction clearance rates have also fallen below their long-term averages. While price declines are increasingly widespread across the country, regional differences persist. Brisbane and Adelaide showed weakness in the latest central bank review, whereas Perth and some regional markets continued to see price gains, albeit at slower rates. These variations contribute to a national housing downturn that varies considerably between different markets.
The latest data also contextualize the current decline against a much larger increase in Australian property values since the pandemic began. In August, national housing prices were still about 5% higher than a year earlier and roughly 50% above pre-pandemic levels. Official dwelling-stock figures for the September quarter will be released on December 1. Until then, the most recent national figure remains the $34.1 billion decline recorded in the June quarter.