Australia’s Property Downturn Broadens as Buyer Activity Weakens

Australia’s housing downturn accelerated in August, with property values falling across 93 per cent of capital city suburbs.

Cotality’s national Home Value Index declined by 0.9 per cent during the month, marking the fifth consecutive monthly fall. The national median value is now 3.6 per cent below its March peak.

Sydney recorded the largest monthly decline, falling 1.4 per cent and taking values 7.1 per cent below their February peak. Melbourne and Canberra both declined by 1.1 per cent, Brisbane fell 1 per cent, while Adelaide and Perth were down 0.8 per cent.

Higher interest rates, reduced buyer confidence and increased stock levels in some markets have contributed to the decline. Estimated national sales volumes are now 15.5 per cent lower than a year ago, while average attendance at Ray White open homes has reportedly fallen from four people to two.

For buyers, weaker competition may provide greater negotiating power and more time to assess individual properties. However, affordability remains constrained by borrowing costs, and further price falls could affect buyers who intend to sell again in the short term.

For investors, lower purchase prices do not automatically represent better value. Rental demand, vacancy rates, holding costs and local employment conditions remain important, particularly as performance continues to vary between cities and suburbs.

The outlook will depend heavily on interest rates and employment. A further rate rise could place additional pressure on values, while the relatively low number of sellers entering the market suggests widespread mortgage distress has not yet emerged.

The broader decline may create opportunities, but buyers and investors will still need to assess each property on its individual fundamentals rather than relying on national market movements alone.

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Originally posted on LinkedIn