‘Nightmare’: How far house prices plunged in three months
The government is urging home-owners to keep the faith as a house-price slump gains the hallmarks of an historic downturn.
Australia has just recorded a house price slump the likes of which it has only ever seen twice, but the government has urged home-owners to keep the faith.
Weakened buyer confidence has driven house prices down across every capital city for the first time in 15 years and the second time ever, according to Domain’s September Quarter 2026 House Price report.
Australian house prices fell a record 4.7 per cent over the quarter with Perth recording the sharpest drop of 7.4 per cent, while Brisbane and Adelaide also logged their steepest house-price falls on record.
The median house price in the Sunshine State fell 5.4 per cent to $1,152,122, according to Domain’s September quarter House Price Report.
The slump represents more than $66,000 in just three months.
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Meanwhile in Adelaide, house prices plummeted by more than $33,000 from $1,129,396 in June to 1,095,429 in September.
Housing Minister Clare O’Neill said the movement still reflected the cyclical nature of the nation’s property market.
“This is the third or fourth downturn in house prices that we’ve seen just in the last decade … it is unfair to report about house-price growth looking at this just in the last six months,” she told 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.”
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Labor has copped some blame for the downturn over ending negative gearing and paring back the discount on capital gains tax in May’s federal budget.
But because those changes don’t enter force until July 2027, economists have largely attributed the falls to the Reserve Bank hiking the cash rate to its highest level in 15 years.
While a softer jobs figures for September lengthened the odds of a Melbourne Cup day rate rise, RBA deputy governor Andrew Hauser on Wednesday maintained there were “hard choices” ahead and reiterated the November meeting was live.
Higher inflation expectations were becoming embedded as the Middle East supply shock dragged on, which he described as “a central banker’s nightmare”, he said.
Inflation was “higher than we would like for longer than we would like,” Finance Minister Katy Gallagher told ABC News on Thursday, but she said housing was a long-term investment that could weather a fluctuating market.
O’Neill said the government’s tax changes would have enduring beneficial consequences to the housing market beyond the Reserve Bank’s decision-making.
“The changes that we have made to the housing market are permanent changes that, for the first time at every auction around the country, put a first-home buyer on a level playing field with an investor,” she said.
-with AAP
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