Overview
- Higher-value homes have led the downturn in Australia's largest cities, with upper-quartile house values down 10.7% from peak in Sydney and 10.5% in Melbourne.
- National annual sales fell 2.7% over the year to August, with capital city volumes down 5.2% while regional sales rose 1.8%.
- Selling conditions continue to soften, with the median time on market increasing to 39 days, up from 28 days a year ago.
High end homes lead market downturn as affordable properties prove resilient
Australia's most expensive homes are leading the housing downturn, with upper-quartile house values in Sydney and Melbourne now more than 10% below their peak levels, while lower-priced homes and units continue to show greater resilience, according to Cotality's September Housing Chart Pack.
Cotality's September Chart of the Month examines how housing values are tracking across different price segments, revealing the sharpest falls have occurred at the top end of the market.
Among Australia's largest cities, upper-quartile house values are now 10.7% below peak in Sydney and 10.5% lower in Melbourne, highlighting the extent to which higher-value properties have driven the downturn.
Cotality Head of Research Gerard Burg said the downturn has broadened over time, spreading beyond the premium markets where it first emerged.
"Early in the cycle, falling home values were largely confined to higher-priced properties in Sydney, Melbourne and Canberra.
"More recently, however, home values have also started declining across Brisbane, Adelaide and Perth, demonstrating that the downturn is now affecting a broader range of markets," he said.
"While the market correction has become more widespread, the largest declines continue to be concentrated among higher-value homes."
Mr Burg said the timing and scale of declines varied across cities.
"Higher-value dwellings in Sydney, Melbourne and Canberra were the first to turn and continue to record the largest cumulative falls."
"Upper-quartile houses in Sydney and Melbourne are now more than 10% below their cyclical peaks, underscoring the role premium housing has played in driving the downturn."
"In contrast, price declines across Brisbane, Adelaide and Perth have been more evenly distributed across value segments, reflecting their later entry into the downturn."
However, Mr Burg noted there were exceptions to the broader trend.
"Canberra's unit market has bucked the pattern, with lower-value units recording larger declines than their higher-value counterparts."
"Lower-quartile unit values in Canberra are down 2.9% from peak levels compared with a decline of 1.6% across the upper quartile, reflecting an overhang of more affordable stock."
The divergence between upper and lower-value housing remains most pronounced in Melbourne and Sydney. The gap between cumulative declines across upper and lower-quartile houses has reached 6.6 percentage points in Melbourne and 5.3 percentage points in Sydney. By comparison, the difference is less than one percentage point in Perth, Adelaide and Brisbane.
How do units compare?
Mr Burg said a similar trend was evident across the unit market, although the differences between value segments were less pronounced than for houses.
"Units have generally proven more resilient throughout the downturn, supported by their relative affordability and lower entry price points."
"While higher-value units have generally recorded larger declines than lower-value stock, the gap is smaller than what we are seeing across detached housing."
The difference between upper and lower-quartile unit declines is widest in Melbourne and Sydney at 4.9 and 4.5 percentage points respectively, compared with 2.6 percentage points in Adelaide, 1.4 percentage points in Brisbane and 1.3 percentage points in Perth.
However, there were some notable exceptions.
"Perth's unit market has recorded larger declines than houses across every value segment, while upper-quartile units in Adelaide have fallen further than upper-quartile houses."
"Despite these exceptions, affordability has generally helped support demand for units and cushion value declines relative to detached housing."
Other key highlights from the Cotality Housing Chart Pack, September 2026
- National dwelling values fell 3.1% over the three months to August, while annual growth eased to 2.7%, adding approximately $24,648 to the median dwelling value over the year.
- National annual sales declined 2.7% over the year to August, with capital city sales down 5.2% and regional sales rising 1.8%.
- Selling conditions continued to soften, with the median time on market increasing to 39 days, up from 28 days a year ago.
- Vendor discounting widened, with the median discount across the capitals reaching 4.2%, the highest level since January 2023.
- Total listings rose to more than 139,100 properties, up 18.1% year-on-year and now 2.2% above the five-year average.
- The four-week average auction clearance rate was 49.5% at the end of August and has remained below 50% since early June.
- Chart of the Month: Upper-quartile house values in Sydney and Melbourne are now down more than 10% from their peak levels, with Canberra also recording significant declines.
