All capital cities record house price falls for first time in 15 years
- House prices fall in every capital city for the first time in 15 years
- Combined capital city house prices dropped a record 4.7% in the September quarter
- The latest quarterly home price fall wiped almost $60,000 off median values
Combined capital city median home prices fell 4.7% ($59,870) to $1,226,566 over the three months to September.
It marks the steepest quarterly decline on record and the second consecutive quarter of falls.
Unlike previous quarters when price drops had been limited to weaker markets, the September quarter saw all eight capitals recording house price declines.
Domain chief residential economist Dr Nicola Powell said Australia's housing market has entered a new phase in the downturn.
"What began as weakness concentrated in some cities has broadened considerably, with house prices now falling across every capital for the first time in 15 years," Dr Powell said.
According to Domain, declining confidence is now playing a larger role in the market than affordability alone.
"Confidence has become one of the market's biggest headwinds," Dr Powell said.
"Higher interest rates and persistent cost-of-living pressures are reducing how much buyers can borrow and their willingness to transact."
And with prices expected to fall further, Dr Powell noted buyers would have "less urgency to act" and opt to wait instead.
See also: Three in four Aussies delay property purchases while waiting for prices to fall further
Former growth leaders fall hardest
The sharpest declines over the September quarter were recorded in cities that previously led the growth cycle.
Perth posted the steepest fall, with median house prices plunging a record 7.4% or $88,664 during the quarter to $1.115 million.
The city's house values are now 8% below their March 2026 peak.
Brisbane followed with a 5.4% quarterly decline, ending almost four years of uninterrupted growth.
Adelaide's 3% fall matched its steepest quarterly decline on record and brought to an end more than three-and-a-half years of continuous gains.
"It's a significant reversal for Perth, Brisbane and Adelaide," Dr Powell noted.
"These were among the strongest markets of the previous growth cycle, but affordability constraints and weaker sentiment have caught up with them," she added.
Source: Domain
Melbourne to exit the million-dollar club
Melbourne house prices continue to head to the floor, with September quarter's decline the steepest in four years.
House prices in the Victorian capital dropped another 3.3% ($34,192) to $1.014 million, bringing it closer to falling below the $1-million mark it first surpassed in June 2021.
Melbourne's annual growth entered the negative territory for the first time in 18 months, down 4.7%.
Sydney house prices fell 4.7% to $1.66 million, its third consecutive quarterly decline, leaving values 7.9% below their December 2025 peak.
Sydney's annual decline of 5.8% was the largest among all capitals.
Canberra, Hobart and Darwin also posted quarterly declines.
Weakness extends to apartments
Unit markets were not spared from the recent housing downturn after combined capital prices fell 3.5%, the steepest decline in seven-and-a-half years.
"Units continue to show greater resilience because of their relative affordability, but the breadth of this quarter's declines shows they are not immune to weaker conditions," Dr Powell said.
Median unit values currently sit at $702,858.
Perth also took the top spot in price falls across Australia's apartment markets, falling 6.5% ($45,487) to $659,561.
Despite Perth annual unit market growth staying in the positive territory at 9.4% ($56,629), it was its weakest result in three years, per Domain.
Darwin was the only capital city to record unit price growth, rising 2.2% over the quarter.
Source: Domain
Buyers gain the upper hand
As the nation's housing downturn deepens, the report highlights the balance of power shifting towards buyers.
The Domain report found weaker sentiment is also evident in selling conditions, with seasonally low listing activity and clearance rates, longer selling times, and increased discounting.
Some sellers are also moving from auction to private treaty campaigns
"Homes are taking longer to sell, there is greater scope to negotiate, and sellers are having to be more realistic about price expectations," Dr Powell said.
Dr Powell added that current conditions have given buyers with finance approval more room to negotiate than at any point in recent years.
With investors and first-home buyers retreating, Domain expects confidence and borrowing capacity to remain key determinants of housing market performance.
"Until households have greater certainty around interest rates, living costs and policy settings, buyers are likely to remain cautious, and prices will remain under pressure," Dr Powell said.
See also: Young Aussies say they need to get onto the property ladder before having kids
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