Australia’s housing market continued to soften in October, with national dwelling values falling for the seventh consecutive month. Conditions remain mixed across the country, with Hobart and Darwin recording monthly growth and regional markets holding on to annual gains.
National dwelling values fell by 1.2% in October, with the median home value now at $884,855, according to the latest data from Cotality. This leaves values 6.7% below their March 2026 peak, although they still remain 15.9% higher than five years ago.
Cash rate rises to 4.85%
The Reserve Bank of Australia (RBA) lifted the cash rate by 25 basis points to 4.85% on 3 November. It was the fifth increase this year and takes the cash rate to its highest level since November 2008. The decision followed higher-than-expected inflation, with annual headline inflation rising to 4.3% in September.
For an average owner-occupier on a mortgage of around $742,000, Cotality estimates mortgage repayments are now 14% (roughly $600) higher than in January. The borrowing capacity of the median income household is also around $88,000 (or 12%) lower than at the start of the year.
For Sales Agents, this may mean longer campaigns and more conversations with vendors about setting price expectations that reflect current conditions. Tailored advice to clients with different needs will help position you as an expert to have on their team in the current market.
Looking ahead, Cotality notes that another rate rise is possible if inflation stays well above the RBA’s target, given the central bank’s focus on bringing it down. Cotality expects home values to keep easing gradually rather than fall sharply, with limited new housing supply and ongoing population growth providing support. A broader market recovery may depend on interest rate cuts, which Cotality says are unlikely before the second half of 2027.
Brisbane and Perth record the largest monthly falls
Brisbane recorded the largest monthly decline among the capitals, with values falling by 2.0%, followed by Perth at 1.7% and Sydney at 1.6%. Adelaide fell 1.2%, while Melbourne recorded a smaller decline of 0.8%.
Brisbane and Perth’s recent falls follow several years of strong growth. Values remain 46.1% higher than five years ago in Brisbane and 68.3% higher in Perth, which means most homeowners in these cities are likely to have a solid equity buffer.
Sydney and Melbourne are in a different position, with values sitting 1.5% and 7.3% below where they were five years ago, respectively.
Hobart (0.5%) and Darwin (0.6%) were the only capitals to record monthly growth in October.
Regional markets continue to hold up
Regional markets have been more resilient than the capitals. Combined regional values fell by 0.7% in October, half the 1.4% decline across the combined capitals, and remain 3.4% higher over the year. By comparison, combined capital city values are 4.8% lower than a year ago.
Leading annual growth is regional Western Australia at 11.0%, followed by regional South Australia and regional Tasmania, both up by 9.6%. All regional markets across the states recorded annual growth, with regional NSW at the lower end (1.4%).
Several regional areas recorded double-digit growth over the year, led by the Goldfields in WA (23.8%).
With conditions varying between cities and regions, local market data will remain the most useful guide for buyers, sellers and property professionals in the months ahead.
Disclaimer: The information enclosed has been sourced from Cotality and the Reserve Bank of Australia and is provided for general information only. It should not be taken as constituting professional advice.
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