In 60 seconds: Australian home prices fell for a seventh straight month in October, and capital-city values are now down 8.1% in seven months — the fastest slide in 40 years — just as the Reserve Bank meets to decide on another rate hike Tuesday.
- National home prices fell 1.2% in October, the seventh monthly fall in a row, leaving values 6.7% below the March peak and 2.8% lower than a year ago.
- Capital-city values have dropped 8.1% in seven months — the fastest pace in 40 years, steeper than the 7% fall over the same stretch in 2022–2023.
- Brisbane led October's falls at 2.0%, ahead of Perth at 1.7% and Sydney at 1.6%; the median home has lost A$63,400 (about US$44,565) since the peak.
- Sales have slumped 23% from a year earlier, and Westpac warned Monday of a downturn steeper than any in nearly two decades.
- The Reserve Bank decides Tuesday 3 November, with all four major banks tipping a fifth 2026 hike to 4.85% — and markets pricing it at nearly 90%.
Here's the thing: for years, the safest bet in Australian dinner-party conversation was that house prices only go up. That bet just took its worst beating in four decades — and it lands on the doorstep of a Reserve Bank board that looks ready to raise rates again anyway.
A Queenslander-style house in Paddington, Brisbane — the city that led October's price falls. Photo: Wikimedia Commons, CC BY-SA 4.0 (file photo).
What happened
Property data firm Cotality released its October figures on Monday, and they're grim reading for anyone who owns a home — or is trying to buy one. National home prices fell 1.2% in October from September, when they dropped by a downward-revised 1.3%. That makes seven straight monthly falls, and it takes national values to 6.7% below their March peak and 2.8% below where they were a year ago.
The capital cities are where the damage is concentrated: their values have fallen 8.1% in just seven months, the fastest pace of decline in 40 years. The sharp post-COVID correction of 2022–2023 saw a 7% fall over the same timeframe. This one is already worse.
Latest verified facts
Brisbane overtook Sydney as the capital with the fastest monthly decline, and the mid-sized capitals led the falls overall. Sydney's prices are now 1.5% below where they were five years ago — five years of gains, wiped out and then some.
| Market | October change | Bigger picture |
|---|---|---|
| Brisbane | -2.0% | Fastest monthly fall of any capital |
| Perth | -1.7% | Unwinding roughly 50% five-year gains |
| Sydney | -1.6% | Now 1.5% below five years ago |
| National | -1.2% | -6.7% from March peak; -2.8% year on year |
| All capitals (quarter) | -4.5% | Capital-city median -1.4% in October alone |
The market isn't just cheaper — it's quieter. Property sales have slumped 23% from a year earlier and sit 18% below the five-year average. In Sydney, transaction volumes are down 30% year on year. People aren't rushing in to grab bargains. They're waiting.
Why it matters
Cotality research director Tim Lawless points to a pile-up of headwinds: interest rate hikes, persistently low confidence, cost-of-living pressures, and the federal government's move to wind back tax concessions for property investors. Any one of those would cool a market. Together, they've frozen it.
And now the banks are sounding the alarm too. Westpac warned on Monday that this downturn is steeper than any seen in nearly two decades, and reported a twofold jump in credit impairment charges — the money set aside for loans going bad — even as its full-year adjusted profit met expectations.
There's a twist that should worry policymakers more than the price falls themselves: the falls are happening while the Reserve Bank is still in hiking mode. The cash rate sits at 4.60% after the board's 29 September hike, the fourth rise of 2026. A fifth hike Tuesday would take it to 4.85%, an 18-year high, right into a market already going backwards.
house A in Corinda, A housee. Queensland's capital led October's declines. Photo: Wikimedia Commons, CC BY-SA 4.0 (file photo).
What it means for buyers, sellers and mortgage holders
If you're buying, this is — on paper — your market. Lawless says buyers have a lot more stock to choose from, more leverage, and less urgency than they did a year ago, when values were rising fast. But here's the catch he flags: despite all that, buyers are "noticeably absent," held back by low confidence and serviceability barriers. Cheaper houses don't help much when the bank won't lend you as much, or when you're not sure your job is safe.
If you're selling, the numbers are blunt. The median dwelling has lost A$63,400 — about US$44,565 — since the March peak. Spread over seven months, that's roughly A$9,057 a month evaporating from the typical home's value, implying a peak median near A$946,000. Waiting for a better price has been an expensive strategy.
If you hold a mortgage, there's one genuine reassurance in the official record: the Reserve Bank has previously said most mortgage holders would still be in positive equity even if house prices fell 20%. We're at 6.7% from the peak nationally. That's cold comfort if you're trying to sell, but it matters if you're worried about owing more than your home is worth — for most borrowers, that line is still a long way off.
What happens next
All eyes turn to Tuesday 3 November at 2:30pm AEDT, when the Reserve Bank board announces its decision. All four major banks expect a 25-basis-point rise to 4.85%, and markets imply nearly a 90% probability of a hike, with a 20% chance rates eventually reach 5.1%. A hold would be the surprise — and after Monday's housing data, it would also be the decision that gives the property market its first real breathing room of the year.
Our take: don't read this as a buying signal or a selling panic — read it as a warning that the floor hasn't been found yet. With a likely hike landing Tuesday on top of a 40-year-speed slide, the next month of Cotality data matters more than this one. If November's fall matches October's, the "fastest in 40 years" record won't last long either.
Frequently asked questions
How fast are Australian home prices actually falling?
National prices fell 1.2% in October, the seventh straight monthly drop, and capital-city values are down 8.1% in seven months — the fastest pace in 40 years.
Which cities fell most in October?
Brisbane fell 2.0%, Perth 1.7% and Sydney 1.6%. Across all capitals, median prices dropped 4.5% over the quarter.
Will the Reserve Bank's Tuesday decision make it worse?
All four major banks expect a hike to 4.85%, which would raise borrowing costs further. Markets price the hike at nearly 90%, so a hold — not a hike — would be the surprise.
Related coverage: RBA Tuesday: Why 4.85% Looks Likely — and What It Adds to Your Loan | Westpac Will Cap Crypto Transfers at A$10,000 a Month From Dec. 1 — No Exceptions
Sources: Reuters, "Australian home prices fall for seventh month, looming rate hike adds to pain" (2 Nov 2026); Cotality October dwelling values via Reuters and Xinhua reporting; New Straits Times, "Westpac flags deepest housing downturn in nearly two decades" (2 Nov 2026).
A house in Corinda, Brisbane. Queensland's capital led October's declines. Photo: Wikimedia Commons, CC BY-SA 4.0 (file photo).