Australia's housing market downturn and RBA interest rate impact
Consensus Summary
Australia’s housing market is experiencing a downturn across major cities, with property prices falling in July after months of growth. Both the ABC and the Guardian report declines in Brisbane, Adelaide, and Perth, with the ABC noting a 0.7 per cent national drop—the largest since December 2022—and the Guardian highlighting Brisbane’s median price falling to March levels after 40 consecutive months of growth. Three consecutive RBA interest rate hikes since February, along with tax policy changes, are cited as key drivers of the slowdown. The RBA is not expected to raise rates further at its August 11 meeting, though uncertainty remains about future hikes. Analysts warn of potential deeper declines if unemployment rises, while the RBA governor attributes the slump to reduced buyer confidence and external factors like the Middle East conflict. Auction clearance rates have improved slightly, but sellers are holding back listings, suggesting cautious market conditions.
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Key details reported by multiple sources:
- Property prices fell in July, with national prices down 0.7 per cent, the largest single monthly decline since December 2022
- Brisbane and Adelaide recorded property price declines in July (0.6 per cent and 0.2 per cent respectively)
- Three consecutive RBA interest rate hikes contributed to the housing market downturn
- The RBA is not expected to raise interest rates at its meeting on August 11
- Property prices in Brisbane fell to equal their March level after 40 consecutive months of growth since February 2023
- Regional Australia’s home values fell overall for the first time since January 2023
- The Reserve Bank of Australia began hiking interest rates in February
- The RBA governor, Michele Bullock, spoke on Wednesday about the housing market downturn
- Auction clearance rates rose from a June low of 47.4% to 53.6%
- January 2025 and September 2025 are referenced as key dates for property price comparisons
Points of Difference
Details reported by only one source:
- Analysts say three consecutive RBA interest rate hikes and government tax changes (negative gearing and capital gains tax) triggered the property market weakness
- Brisbane’s housing supply was 25 per cent below the five-year average in February but is now 6 per cent above that average
- Perth saw a 0.1 per cent increase in July after a revised 0.5 per cent contraction in June, while Darwin recorded a 0.8 per cent increase
- Former NAB chief economist Alan Oster believes the property market weakness is mainly due to rising interest rates and warns unemployment could rise to 5 in front of the current 4.4 per cent, risking recession
- Oster expects a property market correction of 10 per cent or more if unemployment rises significantly
- Gerard Burg from Cotality expects property values to continue declining in the short-term but notes low unemployment and population growth may limit further drops
- House prices in Brisbane, Adelaide, and Perth have fallen since May, with Brisbane’s median price dropping to $1.1m (equal to March levels)
- Adelaide and Perth median home prices fell about $4,000 below their May record highs ($944,000 and $1.03m respectively)
- Sydney, Melbourne, and Canberra median prices fell $69,000, $39,000, and $22,000 respectively since February, but remain above January 2025 (Sydney, Melbourne) and September 2025 (Canberra) levels
- The Reserve Bank reported fewer than 1% of borrowers have fallen into negative equity
- NAB reported a 15% fall in home loan applications from the first three months of 2026 to the three months to June
- RBA governor Michele Bullock attributed the slump in house prices and demand to falling buyer confidence, not just interest rates
- Bullock expects prices to lower slightly and for confidence to return as the Middle East conflict dies down
Contradictions
Conflicting information between sources:
- The ABC states the downturn is spreading to Brisbane and Adelaide with declines in July, while the Guardian focuses on Brisbane’s price drop to March levels and mentions Adelaide and Perth but does not specify July declines
- The ABC mentions a 0.7 per cent national price drop in July as the largest since December 2022, but the Guardian does not provide a comparable national figure for July
- The ABC highlights tax changes (negative gearing and capital gains tax) as a key factor in the downturn, while the Guardian attributes the slump more to the Middle East conflict and tax concessions from the May federal budget
- The ABC references a 0.1 per cent increase in Perth in July after a revised 0.5 per cent contraction in June, but the Guardian does not mention Perth’s July performance specifically
Source Articles
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House prices slide across Australia as Middle East conflict and tax changes begin to bite
Cotality data shows a drop in Brisbane, Adelaide and Perth, as nation’s median home price falls about $19,000 below its March peak Get our breaking news email , free app or daily news podcast House prices have fallen in Brisbane, Adelaide and Perth as the market downturn spreads across Australia. New Cotality data, released on Monday, showed prices have fallen across most of the nation since May. Continue reading...