Australia's Housing Market Splits: Perth Soars, Sydney Dips

National home values grew just 0.3% in April — the slowest monthly gain since January 2025 — as city-level divergence reaches its starkest point in years.

Australia's housing market is in a split that hasn't been this stark in years. National home values rose just 0.3 per cent in April 2026 — the slowest monthly growth recorded since January 2025 — but that headline figure conceals an extraordinary gap between individual city markets, and between price tiers within those cities.

[Property Update](https://propertyupdate.com.au/national-housing-market-update-australia/?utm_source=rss&utm_medium=rss&utm_campaign=national-housing-market-update-australia), drawing on research by Tim Lawless, Research Director at Cotality, reports that Perth delivered monthly growth of 2.1 per cent in April, while Sydney and Melbourne each fell 0.6 per cent. Darwin gained 1.3 per cent, Brisbane was up 1.2 per cent, and Adelaide added 1.1 per cent — its seventh consecutive month of greater than 1 per cent monthly growth. Canberra went flat, snapping a consecutive 14-month growth streak.

This divergence is reshaping who can borrow, what price points remain accessible, and how lenders and borrowers should be thinking about risk as the market moves through a clear turning point.

A Tale of Two Markets: What the Data Shows

The performance gap between cities has reached extreme levels. Perth's rolling annual growth is running at 26 per cent — the steepest rate recorded since 2007. Darwin has both houses and units sitting at concurrent nominal highs. Brisbane's quarterly growth has pulled back from 5.8 per cent in November 2025 to 4.7 per cent now, while Adelaide continues to deliver steady monthly gains.

On the other side of the split, Sydney's median home value has now fallen 1 per cent from its November 2025 peak. The upper quartile — the most expensive quarter of the Sydney market — is down 3.3 per cent year-to-date. Melbourne has recorded five consecutive monthly declines and sits 1.9 per cent below its November 2025 peak. Nationally, auction clearance rates have remained consistently below 55 per cent since late March 2026.

The divergence runs through the price tiers as well. Cotality's data shows a clear flight to affordability, with buyer demand concentrating at the entry level. In Sydney, lower-tier housing values are up 2.9 per cent year-to-date while the top quartile has fallen 3.3 per cent. Buyers are hitting borrowing limits and shifting their sights toward properties where their capacity stretches further.

Supply tells a similarly fragmented story. In Sydney, total advertised listings are tracking 12 per cent above the five-year average. In Melbourne, they are 3.5 per cent above average — both of which shift negotiating power toward buyers. In Perth and Brisbane, supply remains very tight, maintaining upward price pressure. The national rental vacancy rate sits at a critically low 1.7 per cent, with units at 1.6 per cent and houses at 1.8 per cent. Capital city sales volumes are down 5.4 per cent year-on-year and sit 7.4 per cent below the five-year average.

What This Means for Borrowers and What to Do Now

The national headline matters less than most people think. A 0.3 per cent national monthly rise tells you almost nothing about whether prices are moving in the suburb you are targeting — and right now, that suburb-level distinction is highly consequential.

For buyers in Perth, Brisbane and Adelaide, market conditions remain competitive and stock is tight. Getting fully pre-approved before you start inspecting properties is particularly important when clearance conditions favour sellers and vendor expectations remain elevated. Use our [borrowing power calculator](/calculators/borrowing-power) to anchor your price range before you put yourself in a position where emotion overrides budget.

For buyers in Sydney and Melbourne, the environment is more balanced. Listings above historical averages give you more time and choice than existed at the cycle's peak. That is a real advantage if you are genuinely ready to buy — but it is worth noting that "softer market" does not mean cheap. Prices in both cities remain elevated by historical standards, and lenders are stress-testing serviceability at rates that assume further rate movements.

First home buyers in Sydney have a specific data point worth considering: lower-quartile properties are up 2.9 per cent year-to-date in the city, even as the broader market softens. The entry-level tier is holding up better than the premium end, because that is where borrowing constraints concentrate buyer demand. If you are targeting entry-level stock, the correction is happening above your price point, not within it. Explore [first home buyer home loan options](/home-loans/first-home-buyer) to understand what lenders are currently offering at that end of the market.

For investors assessing where to deploy capital, the data points toward continued tight supply in mid-sized capitals providing ongoing rental income support, while the premium end of Sydney and Melbourne requires revised capital growth assumptions. The national rental vacancy rate at 1.7 per cent continues to underpin rental income assumptions for serviceability purposes — relevant given the broader changes to investor loan policies currently under way. Review what [investor home loan options](/home-loans/investor) look like in the current environment, since lender policies are actively shifting.

The outlook for the rest of 2026, according to Cotality's analysis, is for continued loss of momentum rather than a sharp correction. A strong labour market is keeping forced selling to a minimum. But geopolitical uncertainty, normalising population growth, and interest rate uncertainty are all weighing on consumer sentiment, and new dwelling construction continues to undershoot underlying demand.

The opportunity for borrowers in this environment is clarity — knowing your position precisely before you act, rather than making offers based on market conditions from six months ago.