Six months of falling prices: where each capital stands in October 2026
Australian home values fell 1.1% in September 2026, the sixth monthly fall in a row. Nationally, values are 5.2% below the March peak. Every capital fell except Darwin. Sydney is furthest from its high, down 8.6% since February.
In March the national index hit a record. This year has brought four rate rises and a new set of tax rules for investors, and buyers have stepped back.
The falls are wide, not deep. Cotality's research director, Tim Lawless, put a number on it: "97% of capital city suburbs were down in value over the three months to end of September".
Key facts, as at 30 September 2026
- National: down 1.1% in the month, down 3.7% in the quarter, flat over the year
- National median dwelling value: $899,236
- Combined capitals down 1.8% over the year, regional markets up 5.6%
- Home sales over three months: 19.1% lower than a year ago
- Capital city homes take a median of 39 days to sell, up from 23
Source: Cotality Home Value Index, 1 October 2026
The month, city by city
| Monthly change | |
|---|---|
| Brisbane | -1.5% |
| Sydney | -1.4% |
| Adelaide | -1.3% |
| Perth | -1.2% |
| Canberra | -1.1% |
| National | -1.1% |
| Melbourne | -0.7% |
| Hobart | -0.5% |
| Darwin | 0.4% |
Source: Cotality Home Value Index, results to 30 September 2026
Brisbane had the sharpest month. That is a real change: it was one of the strongest markets in the country until May.
Melbourne's fall was the mildest of the big cities, but Melbourne has been falling for longer.
The full picture
One month never tells you much. This table adds the quarter, the year, and the distance from each city's peak.
| City | Month | Quarter | Year | From peak | Peak | Median value |
|---|---|---|---|---|---|---|
| Sydney | down 1.4% | down 4.9% | down 7.0% | down 8.6% | Feb 2026 | $1,198,596 |
| Melbourne | down 0.7% | down 3.4% | down 6.2% | down 7.5% | Mar 2022 | $780,550 |
| Brisbane | down 1.5% | down 4.7% | up 5.9% | down 5.4% | May 2026 | $1,048,880 |
| Adelaide | down 1.3% | down 2.7% | up 6.5% | down 2.9% | May 2026 | $928,560 |
| Perth | down 1.2% | down 4.7% | up 10.1% | down 6.0% | Apr 2026 | $975,022 |
| Hobart | down 0.5% | down 1.2% | up 7.0% | down 2.0% | Mar 2022 | $741,496 |
| Darwin | up 0.4% | up 0.5% | up 11.9% | down 0.2% | Jul 2026 | $633,431 |
| Canberra | down 1.1% | down 3.2% | down 1.6% | down 6.2% | May 2022 | $861,744 |
| National | down 1.1% | down 3.7% | flat | down 5.2% | Mar 2026 | $899,236 |
Three things stand out to us.
Sydney and Melbourne are in a different place to everyone else. The two biggest capitals are both lower than a year ago. Canberra is the only other one that is, down 1.6%. Brisbane, Adelaide and Perth are falling now, but from much higher ground.
Perth is the one to watch. It is still up 10.1% over the year, yet it has dropped 4.7% in three months. That is as fast as Brisbane and nearly as fast as Sydney.
Regional markets are holding better. Regional values are up 5.6% over the year. Even so, 71% of regional areas fell in September.
Why it is happening
Cotality lists the causes plainly: affordability, higher interest rates, the cost of living and weak confidence. It adds that the Budget's changes to negative gearing and capital gains tax "have already seen a sharp reduction in investor demand".
Stock is piling up. New listings in the capitals are 9.2% lower than a year ago, yet total listings are 23.1% higher, because homes are selling so slowly.
What we take from it
Buyers have more room to negotiate. Cotality says they now have more choice, less urgency and "greater scope to negotiate". As Mr Lawless said, the extra stock "is improving choice for buyers, but ironically, many prospective buyers don't have the confidence or financial capacity to buy at the moment."
That last part is the catch. The same rates that push prices down also cut what a bank will lend you. So before you read a 5% fall as a 5% discount, check what you can borrow today. Ours is a short test, and it takes two minutes.
Cotality expects "a gradual drift lower in housing values rather than a material downturn". We would not try to pick the bottom. We would work out a price that makes sense at today's rates and hold to it.
For what the rate rises alone have done to repayments, see the cash rate at 4.60%.
Frequently asked questions
Are Australian house prices falling in 2026?
Yes. Cotality's national Home Value Index fell 1.1% in September 2026, the sixth monthly fall in a row. Values are 5.2% below their March 2026 peak.
Which capital city fell the most in September 2026?
Brisbane, down 1.5% for the month, just ahead of Sydney at 1.4%. Darwin was the only capital to rise, up 0.4%.
How far have Sydney prices fallen from their peak?
Sydney dwelling values are 8.6% below their February 2026 peak. The median dwelling value at the end of September was $1,198,596.
Will prices keep falling?
Cotality says the most likely outcome is a gradual drift lower instead of a sharp downturn, with low unemployment and low new supply limiting the fall. Nobody can promise that.
Sources
- Cotality, Australian housing values down for sixth straight month in September, 1 October 2026
- Reserve Bank of Australia, cash rate target
This is general information, not financial advice.