What Is Actually Going On With the Australian Property Market?!
By: Niro Thambipillay
September 7, 2026
Australian property prices have fallen for five consecutive months, buyers are holding back and the country has more unsold listings than usual. Yet two respected analysts can look at the same market and reach opposite conclusions. One expects the spring selling season to add further downward pressure, while the other argues that weak new listings show owners are choosing not to sell.
In this analysis, Niro Thambipillay examines both sides, the city-by-city numbers and the factor that matters most: whether enough owners are being forced to accept lower prices.
TL;DR
National property values are about 3.5% below their earlier peak after five months of declines. Total listings are high and buyers lack confidence, but new listings are roughly 8% below their five-year average and only around 1% of home loans are behind on repayments. Niro’s view is that the market is a standoff: sellers are not under enough pressure to capitulate, while buyers are waiting for interest-rate certainty. When confidence returns, limited fresh supply could produce a fast rebound in selected markets.
Key Takeaways
- The downturn is broad: 93% of capital-city suburbs recorded a decline during the latest three-month period.
- Sydney is leading the falls: values are about 7% below their February peak after falling 1.4% in August.
- Total listings and new listings tell different stories: there is plenty of old stock, but fewer owners are newly entering the market.
- Forced sales remain limited: only about 1% of home loans are behind on repayments, which is described as normal.
- Certainty could unlock demand: buyers may return quickly once they believe the interest-rate tightening cycle has ended.
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What Is Happening to Australian Property Prices?
CoreLogic’s August figures show national property prices falling for a fifth consecutive month. Values are now around 3.5% below the peak reached earlier in the year. National prices fell 0.9% during August and 3.1% over the quarter, while the combined capital cities fell 1.1% for the month and 3.7% over three months.
The decline is widespread. Over the latest quarter, 93% of capital-city suburbs recorded falling values. This supports the cautious side of the debate, but it does not reveal whether the market is approaching a bottom or beginning a deeper slide.
1. Sydney Is Falling Faster Than the Other Capitals
Sydney values are approximately 7% below their February peak. They fell 1.4% in August and 4.7% during the latest three months. CoreLogic notes that the current pace is faster than the 2022 downturn, which was Australia’s largest property decline in four decades.
Melbourne fell 1.1% for the month and 3.9% for the quarter. Brisbane declined 1% in August and 2.7% over three months. Canberra was down 1.1% and 2.8% respectively, while Hobart slipped 0.2% across both periods. Darwin was the exception, rising 0.6% for the month and 0.9% for the quarter. These differences reinforce why one national forecast cannot describe every city or suburb.
2. High Total Listings Support the Case for Further Falls
Homes are taking longer to sell. The national median time on market has increased from 29 days a year ago to 35 days, while transaction volumes are 15.5% lower than at the same point last year. Tim Lawless describes the result as a buyer’s market in which buyers still lack the confidence to act.
SQM Research managing director Louis Christopher points to more than 279,000 properties listed nationally, around 30,000 more unsold homes than the market would normally carry. Sydney’s total stock is about 28% higher than a year earlier.
Spring has historically lifted the flow of properties coming to market by 30% to 40%. If that usual wave arrives while demand remains weak, sellers will face more competition and prices may fall further. This downside case is consistent with CBA’s revised Australian property forecast, although both analyses measure broad markets rather than every local pocket.
3. Weak New Listings Support the Case for Stabilisation
CoreLogic economist Gerard Burg focuses on new listings rather than total stock. During the latest four weeks, new listings were about 8% below their five-year average and slightly below the same time last year.
This suggests the high total is largely older stock accumulating because homes take longer to sell, not a rush of owners entering the market. Owners who do not need to sell can wait for better conditions. If spring produces fewer new listings than usual, the expected supply surge may not arrive.
4. The Missing Question: Who Is Actually Forced to Sell?
A major price fall requires more than cautious buyers and slow sales. It requires owners who must accept whatever price the market offers. According to the lender figures discussed in the video, only around 1% of Australian home loans are behind on repayments. That is considered normal, even after three rate rises during the year.
With relatively few borrowers forced to sell, owner-occupiers can remain in place instead of accepting a discount. This is the central weakness in the argument for a much larger crash: high listings can pressure prices, but they do not automatically create distressed transactions.
5. Investors Have Another Reason to Hold
Existing investors who bought before the May budget retain their negative-gearing treatment while they continue to hold the property. Selling would mean losing that benefit, with no ability to regain it under the policy described in the video.
Rising rents also help investors carry their properties. If an investor cannot obtain the price they want and would surrender an ongoing tax benefit by selling, waiting can be more attractive than adding fresh stock to a weak market.
Why the Market Has Become a Buyer-Seller Standoff
Sellers are reluctant to accept lower prices, while buyers are waiting for certainty that interest-rate increases have ended. That produces fewer transactions, longer selling times and older listings that remain visible without a corresponding wave of forced sales.
The standoff may break when buyers gain confidence. If demand returns while new construction and fresh listings remain limited, competition can rebuild quickly. Early signs are already appearing in selected areas, although not everywhere. This makes choosing the right suburbs to invest in more important than relying on a single national call.
The Verdict: Watch New Supply and Forced Selling
The latest data clearly describes a downturn, but the next phase depends on two questions. Will spring deliver the usual surge in new listings, and will financial pressure create enough forced sellers to reset prices materially lower?
For owners, a slower market does not automatically mean they must sell. For buyers, more choice and negotiation room can create opportunities before confidence returns. The practical approach is to prepare finance, study suburb-level supply and demand, and buy only when the property fits a long-term strategy rather than reacting to the loudest national prediction.
Summary
- National property prices have declined for five consecutive months and sit about 3.5% below their peak
- Sydney is about 7% below its February peak after falling 4.7% during the latest quarter
- Ninety-three per cent of capital-city suburbs recorded a decline over three months
- National selling time has increased from 29 days to 35 days, while sales volumes are down 15.5%
- More than 279,000 properties are listed, roughly 30,000 above normal levels
- New listings are about 8% below their five-year average, suggesting old stock is accumulating
- Only around 1% of home loans are behind on repayments, limiting forced-sale pressure
- Buyer confidence, interest-rate certainty and the spring flow of new listings will shape the next move
Frequently Asked Questions
A rebound could begin when buyers become confident that interest-rate increases have ended. If demand returns while owners continue holding and new construction remains limited, competition for quality properties could increase quickly in selected markets.
Forced-selling pressure appears limited. The lender figures discussed in the video show only around 1% of home loans behind on repayments, which is considered a normal level even after three rate rises during the year.
New listings are around 8% below their five-year average and slightly below the same period last year. That suggests much of the visible stock is older inventory accumulating because homes take longer to sell, rather than a surge of owners deciding to sell.
They point to weak buyer confidence, slower sales and more than 279,000 properties listed nationally. If spring adds its usual 30% to 40% increase in new stock while demand remains subdued, sellers may face more competition and downward price pressure.
Yes. National dwelling values have fallen for five consecutive months and are about 3.5% below their earlier peak. The latest figures discussed in the video show a 0.9% national fall in August and a 3.1% decline over three months.
About the Author
Niro Thambipillay
Niro is the founder of Investment Rise, one of Australia’s most trusted property buyers agencies. He has helped hundreds of first-time investors build property portfolios and was voted one of the most trusted Real Estate entrepreneurs in the Asia Pacific region (APAC 2022). Niro is also the author of “How to Build a Property Portfolio That Pays You an Income Every Month.”
