- Two new reports into Australia's housing market have found prices are losing steam
- One report declared April to be the turning point in the housing price cycle
- Australia's two largest capital cities Sydney and Melbourne both saw home values go backwards
Both reports agreed falling home values in the Sydney and Melbourne markets pushed national home values lower over April.
Cotality's monthly Home Value Index showed 0.6% downturns in home prices in Australia's two largest capital cities.
PropTrack data recorded lower falls at 0.5% for Sydney and 0.3% in Melbourne, but it was enough to push capital city growth overall into the negative for the month.
See also: Sydney, Melbourne hit first house price falls in years, as Perth surges: Domain
In its assessment of government transfer data, PropTrack has made the call that April marks the turning point in the housing cycle, with prices falling below the March 2026 peak.
However, it pointed out Australian home prices were still up 8.5% on a year ago, representing value growth of $92,200 nationally.
Housing market falters
Cotality's analysis, combining sales data with individual property attributes, arrived at a 0.3% rise in national values in April, the slowest pace of growth since January 2025, just before the first cut to the Reserve Bank cash rate in four years.
Cotality found growth slowed in every capital city in April compared to March, but said conditions "remain highly diverse".
In both data sets, Perth continues to lead the way although even its booming housing market is cooling.
Cotality found the median dwelling value in Perth rose 2.1% in April, translating to another $21,000 price gain in just a month.
Brisbane, Adelaide, and Darwin also saw their growth slow but from a high base, with each city still seeing monthly price gains of more than 1%.
Sentiment 'fallen off a cliff'
Cotality's research director Tim Lawless said the easing in market conditions has been building since late 2025.
"The housing market was losing momentum from late last year as affordability and serviceability constraints weighed on demand," he said.
"Now we have the additional downside pressure of higher interest rates, sentiment has fallen off a cliff, and rising inflation is set to drive the cost of debt even higher."
Anecdotally, the residential property sector has acknowledged markets have slowed amid rising interest rates and fears the protracted Middle East conflict could trigger a recession.
Cotality figures show estimates of capital city home sales over the last three months were down 5.4% on a year ago and 7.4% below the previous five-year average.
Advertised stock levels in the weakest markets - Sydney and Melbourne - have also lifted with properties listed for sale in Sydney at 9.4% above the five-year average and 2.2% above average in Melbourne.
Two-speed market remains
While inventory remains tight across the mid-sized capitals [Perth, Brisbane, Adelaide], advertised listings are also rising but well below typical levels.
PropTrack says momentum has clearly slowed, marking a transition from broad-based growth to a more uneven, multi-speed phase.
"Overall, the housing market is rebalancing as demand softens and growth momentum eases," PropTrack's report said.
"Auction clearance rates have softened, pointing to a growing mismatch between buyer and seller expectations.
"At the same time, higher interest rates are reducing borrowing capacity, while uncertainty is weighing on confidence."
What's ahead for the housing market?
Financial markets are now pricing in a 78% chance the Reserve Bank will raise the cash rate on Tuesday in a bid to keep on top of ongoing inflationary pressures from higher fuel prices.
This would trigger another round of interest rate increases - the third for 2026 with at least one big bank, Westpac, forecasting another two to follow in June and August.
As well, property investors are waiting to see what changes the federal government will make to capital gains tax and negative gearing tax concessions in the federal Budget on 12 May.
It remains to be seen how a new tax regime could affect property markets in the short- and long-term as investors weigh their options.
But PropTrack is not expecting significant turbulence ahead.
"While price growth is expected to slow, a large correction remains unlikely. Strong equity buffers, a resilient labour market and limited forced selling are helping to stabilise conditions and cushion price falls," the report said.
"Population growth and ongoing supply constraints exacerbated by higher construction costs and elevated interest rates continue to place a floor under prices.
"The adjustment is expected to be gradual, but slower growth and further price declines are likely.”
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