Property market downturn in Sydney and Melbourne's high-value suburbs
Consensus Summary
Both Sydney and Melbourne’s high-value suburbs are experiencing significant property downturns, with the most prestigious areas seeing the steepest declines. In Sydney, coastal suburbs like North Curl Curl, Malabar, and Wheeler Heights have dropped 17–19 per cent since their peaks in September, October, or November, with median values ranging from $2.15 million to $3.28 million. Melbourne’s inner-east suburbs, including Deepdene (14.1 per cent drop) and Toorak (12.4 per cent), have also plunged since their peaks in April or September 2025. Affordability pressures, higher interest rates, and reduced buyer confidence are common factors, though Sydney’s downturn is tied to broader market cooling while Melbourne’s is exacerbated by a collapse in Chinese buyer demand. Supply remains historically low in both cities, with vendors reluctant to list due to uncertainty and price drops, particularly in the upper-end market where values have fallen 5–15 per cent depending on location and property type.
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Key details reported by multiple sources:
- Sydney’s median home value fell 4 per cent in the three months to July to a median of $1.24 million
- Sydney’s most recent price peak was in January, with a 5.3 per cent fall since then
- Melbourne’s inner-east suburbs (Deepdene, Canterbury, Mont Albert, Toorak) saw home value drops of 12.4 per cent to 14.1 per cent since their recent peaks
- The upper-end property market (top-25-percentile) experienced the largest percentage declines in both Sydney and Melbourne
- Supply of homes for sale is significantly lower than this time last year in both markets
- Affordability pressures and higher interest rates are cited as key factors in the downturn
- The downturn in high-value suburbs began earlier than the broader market peak in both cities
Points of Difference
Details reported by only one source:
- North Curl Curl’s dwelling prices fell 19.4 per cent (almost $790,000) since September to a median of $3.28 million by end of July
- Malabar’s prices fell 18.7 per cent from October high to $2.9 million median
- Wheeler Heights dropped 17.3 per cent from November peak to $2.15 million median
- Sydney’s top-end Malabar homes traded between $4 million and $6 million; entry-level stock between $2.5 million and $3.5 million
- North Curl Curl’s $7 million+ properties dropped 15 per cent, while $7 million and under fell 5–10 per cent
- Stock supply is at its worst in 15 years, with vendors avoiding market due to low motivation
- First-quarter 2026 saw drops of 5–10 per cent depending on property quality, up to 15 per cent for less appealing homes
- 5 per cent deposit scheme still active for first-home buyers, but upper-end market cooled significantly
- Deepdene’s values fell 14.1 per cent ($367,139) since September 2025
- Canterbury dropped 12.9 per cent ($323,058), Mont Albert 12.6 per cent, Toorak 12.4 per cent ($190,353) since April 2025
- Chinese buyer demand collapsed due to taxes and market conditions in China, leading to more vendors than buyers
- Fringe suburbs like Mont Albert North/Balwyn North drop faster than core suburbs during uncertainty
- Downsizers and upsizers are hesitant to sell due to price drops (e.g., $3–4 million properties now under $3 million)
- Stock supply is down compared to this time last year, with cautious off-market campaigns
Contradictions
Conflicting information between sources:
- SMH states Sydney’s median home value fell 4 per cent in the three months to July, while THEAGE does not provide a comparable figure for Sydney’s overall median drop
- SMH mentions Sydney’s peak was in January with a 5.3 per cent fall, while THEAGE focuses on Melbourne’s inner-east peak declines since September 2025 or April 2025 without a direct Sydney comparison
- SMH cites a 15-year low in supply, while THEAGE notes supply is down compared to this time last year without specifying a timeframe beyond that
- SMH attributes drops to affordability and higher rates, while THEAGE additionally highlights Chinese buyer collapse and Victorian election uncertainty as key factors
Source Articles
‘Fewer buyers’: The Sydney suburbs with the deepest property downturns
Prestigious coastal suburbs have plunged from their recent highs, with the cost to buy a typical home in some spots declining by almost 20 per cent.
Melbourne suburbs where home values plunged most since the last peak
Some Melbourne suburbs have plunged in value amid affordability pressures, global uncertainty and interest rate rises.