Home Values Fall for the First Time in Four Years
ABS figures confirm Australia's total dwelling stock value fell $34.1 billion in the June quarter, with NSW and Victoria hardest hit.
The first quarterly decline since September 2022
Australia's residential property market has entered a new phase. For the first time since the September quarter 2022, the total value of the nation's housing stock has gone backwards.
New figures from the Australian Bureau of Statistics (ABS) show the total value of residential dwellings fell $34.1 billion — a 0.3 per cent decline — to $12.7 trillion over the three months to June 2026, down from $12.72 trillion in the March quarter. Households own $12.18 trillion of that total.
The Adviser reports that ABS head of finance statistics Dr Mish Tan confirmed it was weaker prices, not a contraction in supply, that drove the result. "The value of dwelling stock fell for the first time since the September quarter 2022," she said. Australia's housing stock actually grew during the same period — the number of residential dwellings rose by 54,400 over the quarter to reach 11,531,100. The problem was price, not supply: the national mean dwelling price fell $8,200 to $1,100,400.
Where values fell — and where they held up
The decline was not evenly spread. New South Wales bore the heaviest impact: its total residential dwelling value dropped 2 per cent, or $92.9 billion, in the June quarter. NSW's mean dwelling price fell 2.4 per cent, or $32,700, to $1,304,900 — still the most expensive housing market in Australia.
Victoria also saw a meaningful pullback, with total dwelling stock value falling 1.6 per cent, or $44.3 billion. Victoria's mean dwelling price declined 2.1 per cent, or $19,600. The ACT recorded a smaller decline of 0.7 per cent, or $1.4 billion, with mean prices down 1.3 per cent, or $13,300.
Every other state and territory recorded an increase in dwelling stock value. Queensland's mean dwelling price now sits at $1,130,600, narrowly ahead of Western Australia at $1,123,700. The Northern Territory recorded the lowest mean dwelling price in the country at $614,400.
Looking ahead, Commonwealth Bank economists have forecast a further national peak-to-trough fall of 9%, with Melbourne expected to bear the steepest decline at around 12% and Perth pulling back around 8%.
The RBA remains focused on inflation, not prices
A falling market might seem like a reason for the RBA to ease up. It isn't, at least not yet.
Speaking at the Australian Financial Review Property Summit in Sydney on Tuesday, RBA assistant governor Sarah Hunter was unambiguous about the central bank's priorities. "Inflation is top priority right now — inflation is above target and has been for some time," she said. "We think that the risk to inflation relative to that baseline forecast was skewed to the upside."
Hunter acknowledged that the RBA's three consecutive rate increases earlier in 2026 were expected to weigh on property prices, but made clear that further rate increases remained on the table. "If there is a sense that inflation is going to be stronger than we think in the context of our forecast, the board may well have to raise interest rates to tackle that," she said.
ANZ's global chief economist Richard Yetsenga offered some perspective for borrowers feeling spooked by the data. "Property prices in Australia have risen 6.5 per cent a year for the last 30 years. We're down about half of one year's gain and up 1000 per cent the last 30 years," he said. His view: the current adjustment is part of a broader transition in housing-market conditions, not a freefall.
What borrowers should do now
For existing mortgage holders, declining values introduce two risks worth managing proactively.
The first is loan-to-value ratio (LVR) creep. If your property has declined in value since you took out your loan, your LVR has risen — which can affect your eligibility for rate discounts, or your ability to refinance without paying lenders mortgage insurance. Use our LMI calculator to understand where you currently stand.
The second is the refinancing window. Even as prices soften, the gap between what you're paying now and the cheapest home loans currently available can still be material. A falling market is not a reason to sit on an uncompetitive rate. If you're an existing borrower with a sound LVR, our refinance savings calculator can show whether switching still makes financial sense.
For prospective buyers — particularly first home buyers watching prices ease — lower entry points in markets like Sydney and Melbourne may be opening up, but borrowing capacity and deposit requirements still need to stack up. With further rate rises expected before year-end, understanding exactly what you can borrow now, before the next board decision on 28–29 September, is essential.