Australian property market downturn in Sydney and Melbourne, June 2026
Consensus Summary
Australian property markets in Sydney and Melbourne are experiencing a downturn, with forecasts predicting house price declines of up to 7% in Sydney and 8% in Melbourne over the next 12 months. While 96% of homeowners who sold in the March 2026 quarter made profits, losses were concentrated in high-density suburbs with recent large-scale unit developments, such as Melbourneâs CBD (49% loss-making) and Sydneyâs Strathfield (21.6%). Economists attribute the slowdown to three consecutive Reserve Bank rate hikes, affordability pressures, and federal budget tax changes, though the market was already weakening before the budget. Mid-tier cities like Brisbane, Perth, and Adelaide are expected to see slower but still positive growth, while units in Sydney and Melbourne may see minimal declines due to first-home buyer demand. Major banks and analysts broadly agree on the outlook, with Cotality and Domain warning of a prolonged downturn over the next nine to 12 months.
â Verified by 2+ sources
Key details reported by multiple sources:
- 96% of homeowners who sold in the March 2026 quarter made a profit, the highest share since December 2025, with a median gain of $377,000 (Cotality Pain and Gain Report).
- 45.1% of sales in Melbourne City Council lost money in the March 2026 quarter, followed by Stonnington (30.2%), Port Phillip (23.3%), and Yarra (22.8%).
- 21.6% of sales in Sydneyâs Strathfield LGA lost money in the March 2026 quarter, 21.2% in Parramatta, and 19.9% in Ryde.
- 49% of unit resales in the Melbourne CBD were loss-making in the March 2026 quarter, described as 'very weak conditions' by Cotality.
- Domain forecasts Sydney house prices to fall between 3% and 7% by June 2027, with a median price drop of $122,000 to $1.62 million.
- Domain forecasts Melbourne house prices to fall between 4% and 8% by June 2027, with a median price drop of $84,000 to $966,000.
- Domain expects Brisbane house prices to grow 3% to 7%, Perth 5% to 9%, and Adelaide 4% to 8% in FY2027, down from double-digit growth in 2024â2025.
- Domain forecasts Melbourne and Sydney units to move between -3% and +1% due to first-home buyer demand.
- The downturn is attributed to three Reserve Bank rate hikes, affordability constraints, the Iran warâs cost-of-living impact, and federal budget tax changes.
- Cotality head of research Gerard Burg warned of a 'much less clear path to profitability' for homeowners going forward, with national housing value declines expected.
Points of Difference
Details reported by only one source:
- NAB expects property price falls of 6% in Sydney and 7% in Melbourne this year, while Westpac tips a 3% fall in Sydney and 4% in Melbourne.
- Domainâs Nicola Powell stated the market slowdown in Melbourne and Sydney began before the federal budget, with tax changes acting as 'icing on the cake'.
Contradictions
Conflicting information between sources:
- The articles are identical in content and do not contain any contradictions.
Source Articles
Suburbs where home owners are selling their properties at a loss
Sellers are more likely to lose money in some neighbourhoods than others, as a new forecast predicts how far property prices could fall.
Suburbs where home owners are selling their properties at a loss
Sellers are more likely to lose money in some neighbourhoods than others, as a new forecast predicts how far property prices could fall.