AUSTRALIA / RankWire.AI / – Australia’s property sector saw a drop of $34.1 billion in worth during the June quarter as home prices eased following years of robust increases. The total national dwelling stock decreased by 0.3% to $12.689 trillion. This marked the first quarterly reduction since September 2022. The forecast of a 10% peak-to-trough decline in home prices, published this month, translates to roughly $1.3 trillion when applied to the current national property holdings, underscoring the significant amount of wealth connected to Australian real estate.
According to the Australian Bureau of Statistics, households held $12.183 trillion worth of residential properties at the end of June. Australia’s housing stock comprised 11.531 million dwellings, an increase of 54,400 units during the quarter. Despite this, the average dwelling price decreased by $8,200 to $1.1004 million. The quarterly decline marked a departure from the strong national gains experienced over recent years. Even with this downturn, the overall value of Australia’s housing portfolio remained 8.5% higher than it was a year earlier.
The largest loss in housing value occurred in New South Wales, which saw a decrease of $92.9 billion over the quarter. Victoria experienced a $44.3 billion drop, while the Australian Capital Territory saw a decline of $1.4 billion. Other states and territories recorded increases in total residential values. Meanwhile, the average dwelling prices in New South Wales, Victoria, and the ACT also declined. Despite the decrease, New South Wales still held the highest average price at $1.305 million, with Queensland close behind at $1.131 million.
Rising Borrowing Costs Drive Home Price Adjustments
Recent market data indicate that the housing market slowdown persisted beyond the June quarter. In August, national average home prices fell by 0.9%, marking the continuation of a five-month streak of monthly drops. Shane Oliver, the AMP chief economist, noted that prices had declined 3.6% from their peak by the end of August. His outlook estimates a roughly 10% peak-to-trough decline nationally. When applied to the roughly $12.7 trillion worth of residential property, this percentage equates to about $1.3 trillion in lost value.
The housing slowdown has been accompanied by increased borrowing costs. The Reserve Bank of Australia has raised the cash rate three times in 2026, reaching 4.35%. These hikes total 75 basis points. Financial institutions have transferred the higher rates onto mortgage and deposit products. As a result, scheduled mortgage payments now 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 the Decline
Among the major markets, Sydney and Melbourne have experienced the most significant recent reductions in home prices. Auction clearance rates have also fallen below their long-term averages. Price declines are now more widespread across the country, although regional variations persist. Brisbane and Adelaide saw weakening figures in the latest central bank report. Perth and some regional markets continued to see price gains, though at a slower pace in certain areas. These contrasting trends have resulted in a nationwide downturn that varies sharply between individual housing markets.
The latest data also contextualize this decline against a much larger rise in Australian property values since the pandemic began. As of August, national housing prices remained about 5% higher than a year earlier. They are also approximately 50% above the levels seen at the pandemic’s start. Official dwelling-stock figures for the September quarter are set to be released on December 1. Until then, the latest national figure remains the $34.1 billion quarterly decline recorded through June.