Homes losing $9000 a month as RBA mulls another rate hike

The nationwide slump in house values has spread to Brisbane and Perth with no signs the property downturn is close to ending, amid fears it could get worse if the Reserve Bank pushes ahead with another interest rate hike this week.

Figures released today by Cotality show the nation’s property values fell another 1.2 per cent in October, the seventh consecutive monthly drop, to be down 6.7 per cent since March. In dollar terms, median property values have slumped by $63,400 or more than $9000 a month.

Sydney’s median house price fell another 1.9 per cent through the month to be down by 11.1 per cent since the start of the year. The median unit price dropped by 0.7 per cent to be down by 6.5 per cent.

Melbourne’s median house price edged down by 1 per cent to $906,000. It has fallen by 9 per cent so far this year. The city’s median unit price slipped by 0.3 per cent in October and is down by 4.7 per since the start of 2026.

But bigger falls are now being recorded across the country in cities which have had the largest increase in values over recent years.

Brisbane’s median house value fell by 2 per cent last month and is now the weakest market in the country with values down by 6.2 per cent over the past three months. Perth’s median house value fell by 1.7 per cent in October, it slipped by 1.2 per cent in Adelaide while it eased 1 per cent in Canberra.

In April, the median house price was above $1 million in five capitals. Sydney’s median, though the highest in the country at $1.6 million, had already been falling for two months, while the other capitals in the $1 million club were Brisbane, Perth, Canberra and Adelaide.

Now just Sydney, at $1.44 million, and Brisbane ($1.1 million) are over the $1 million mark.

Cotality research manager Tim Lawless said it was clear the downturn in the property market had stretched across the country.

“Virtually every suburb across Brisbane, Perth and Adelaide has recorded a drop in values over the past three months,” he said.

Two markets defied last month’s fall. House values lifted by 0.6 per cent in both Hobart, where the median price is almost $797,000, and in Darwin, where it sits at $745,726.

Across every part of Sydney and Melbourne, values are falling. In Sydney, the smallest drop has been in the city’s south-west with values down by 1.4 per cent over the past year in Wollondilly and by 1.6 per cent in Camden.

In Melbourne, the smallest annual decline has been in the city centre, down by just 0.3 per cent, while values have eased by 0.7 per cent in the outer north-west around Sunbury.

Outside the capitals, most regional areas are still well up on where they were a year ago. They include WA’s Goldfields region (up 23.8 per cent), the Darling Downs of Queensland (18.2 per cent), Dubbo in NSW (11.7 per cent) and Victoria’s Glenelg region (7.9 per cent).

The fall in housing prices is feeding into the rental market.

Cotality said the national vacancy rate rose to 2.3 per cent, just below its decade-long average of 2.4 per cent and the highest since January 2022, which was the month before the international border was fully re-opened.

Vacancy rates were higher than a year ago in every capital city bar Darwin. Cotality also noted that the pace of rental increases is easing, with the 0.9 per cent lift in the past three months the smallest since January 2025.

Lawless said demand-side factors such as those that had affected home values were at play in the rental market.

“Renters are likely to be approaching a ceiling on their capacity to pay more, following a 52 per cent surge in rents over the past six years, which added around $245 a week to the median rental rate nationally,” he said.

Treasurer Jim Chalmers recently told this masthead’s Inside Politics podcast that while the budget’s tax changes had contributed to the drop in property prices, they were not the only reason for the current downturn.

“I think it would be dishonest to say that the tax changes are solely responsible, or that they’re not responsible at all,” he said.

Lawless said higher interest rates, the run-up in prices over recent years, cost-of-living pressures and the government’s budget measures had all contributed to the slide in prices.

The pressure on the market is likely to intensify after Tuesday, with financial markets and economists expecting the Reserve Bank’s monetary policy board to deliver its fifth rate hike this year.

AMP chief economist Shane Oliver, who expects the bank to take the cash rate to an 18-year high of 4.85 per cent, said households were suffering a double whammy from higher mortgage repayments and the surge in petrol prices.

He said a quarter percentage point hike on Tuesday would add about $110 to monthly repayments on an average mortgage, taking the increase so far this year to $550 a month or $6600 a year. The lift in petrol prices had added almost $100 a month to monthly petrol bills.

“So around a $640-a-month extra impost since January for those with a mortgage and petrol car, which is quite a hit,” he said.

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