House Prices Fall in Every Australian Capital for First Time in 15 Years

House prices fell in every Australian capital city in the September quarter for the first time in 15 years, and for only the second time on record, according to Domain's September 2026 House Price Report, released on Thursday. The combined capital city median house price dropped 4.7 percent, or $59,870, to $1.23 million in the three months to September. That is the steepest quarterly fall on record, and it was the second straight quarter of declines for houses and units.

Unit prices fell 3.5 percent to $702,858, their sharpest quarterly drop in seven and a half years. Annual growth in combined capital house prices turned negative for the first time in more than three years.

The hardest hit cities

Perth recorded the steepest falls. Its median house price dropped a record 7.4 percent, or $88,664, to $1.115 million, and sits 8 percent below the city's peak in March. Perth unit prices fell a record 6.5 percent. Brisbane's median house price fell 5.4 percent, or $66,000, to $1.15 million, its first quarterly decline in almost four years after 14 straight quarters of growth. Adelaide fell 3.0 percent to $1.1 million, matching its steepest quarterly fall on record.

Sydney, the most expensive market, fell 4.7 percent to $1.66 million, a two year low and its largest quarterly drop in four years. Melbourne fell 3.3 percent to $1.01 million and is down 6.7 percent from its December 2025 peak, closing on the $1 million mark it first crossed in June 2021.

Why prices are falling everywhere at once

Domain's chief of research and economics, Dr. Nicola Powell, said the cities that led the last growth cycle are now falling fastest. "These were among the strongest markets of the previous growth cycle, but affordability constraints and weaker sentiment have caught up with them, resulting in some of the sharpest quarterly falls on record," Powell said. Domain pointed to waning buyer confidence, higher borrowing costs, cost of living pressure and the federal government's winding back of tax concessions for property investors.

The Reserve Bank of Australia lifted the cash rate target to 4.60 percent at the end of September, a 15 year high, in a unanimous vote. The tax changes themselves, announced in the May budget, do not start until July 2027, so economists have largely put the falls on the rate rises.

Housing Minister Clare O'Neill defended the government's course on ABC Radio on Thursday. "We do need to slow house-price growth around Australia, and if that is controversial to you, I'm happy to wear the controversy," she said.

What happens next

The Reserve Bank board meets again in early November. With prices falling in all eight capitals at once, the question for that meeting is whether a housing slide this broad changes the case for another rise. For buyers, the falls hand back negotiating power that sellers held through the growth cycle. For owners in Perth and Brisbane, the two cities that ran hardest, the correction has already wiped out close to $90,000 of median value in one quarter.