Overview
Australia's spring property market has failed to gain its usual momentum, with home sales down more than 20% compared with the same period last year.
Total advertised stock increased 19.1%, indicating that homes are accumulating on the market faster than buyers are purchasing them.
Higher interest rates have reduced borrowing capacity, household budgets are under pressure and confidence is weak.
Until households have more certainty about interest rates, it's difficult to see a sustained recovery in buyer demand.
Australia's spring housing market stalls as sales slump and selling times blow out to more than five weeks
Australia's spring property market has failed to gain its usual momentum, with home sales down more than 20% compared with the same period last year, properties taking longer to sell and capital city vendors accepting their largest discounts in five years.
Cotality's October Housing Chart Pack shows an estimated 39,747 homes sold nationally in September, down 20.9% on the same month last year, while the median time to sell a property increased to 41 days, compared with 26 days a year earlier.
Despite the start of the traditionally busy spring selling season, new property listings were 7.9% lower than a year ago and almost 12% below the five-year average. Yet total advertised stock increased 19.1%, indicating that homes are accumulating on the market faster than buyers are purchasing them.
Cotality Research Director Tim Lawless said the weak start to spring reflected more than the usual seasonal interruptions, with dwelling values in every capital city now below their previous peak.
“School holidays and football finals can disrupt the market during September, but they don't explain the extent of the slowdown we're seeing in sales activity or why homes are taking so much longer to sell,” Mr Lawless said.
“The bigger issue is that buyers are finding it harder to commit. Higher interest rates have reduced borrowing capacity, household budgets are under pressure and confidence is weak. Even people who are in a position to buy may be reluctant to make a decision while values are falling.”
“Spring normally brings more activity, but we're seeing fewer new listings and a growing number of properties sitting on the market. That's not an encouraging combination for sellers.”
Higher rates and weaker confidence weigh on demand
Last month's Reserve Bank rate hike, the fourth for the year, further constrained borrowing capacity and added to mortgage repayments, with the cumulative increases since February reducing the borrowing capacity of a median-income household by an estimated $90,000, or 9%.
Mr Lawless said the additional pressure was causing buyers to reconsider their options, with some reducing their budgets and others delaying purchasing decisions.
“Buyers aren't just dealing with reduced borrowing power. They're also weighing up higher repayments and the prospect of further price falls, which is making some reluctant to commit even if they can afford to buy,” he said.
The weaker demand is reflected in property values and selling conditions. National dwelling values fell 3.7% over the September quarter, while capital city vendor discounting reached 4.4%, its highest level in five years.
Across the combined capitals, properties took a median of 39 days to sell, compared with 23 days a year earlier, also the longest selling period in five years.
Auction results provide further evidence of weaker buyer demand, with the four-week average clearance rate falling to 48.3%, compared with 64.4% in late February.
Brisbane and Perth slow, as Sydney slides
The smaller capital cities of Brisbane and Perth, where strong price growth and limited housing supply had previously supported some of the nation's most competitive markets, have experienced some of the most pronounced changes in selling conditions.
Total advertised listings increased 60.4% in Brisbane and 64.7% in Perth over the past year, while median selling times rose from 17 to 38 days in Brisbane and from 11 to 26 days in Perth.
Dwelling values in both capitals fell 4.7% over the September quarter, although annual growth remained positive at 5.9% in Brisbane and 10.1% in Perth, reflecting gains recorded earlier in the year.
Sydney recorded the largest quarterly decline in dwelling values, down 4.9%, taking values 8.6% below their February peak. Melbourne values fell 3.4% over the quarter, while Darwin was the only capital to record growth, up 0.5%.
Mr Lawless said the rapid deterioration in Brisbane and Perth demonstrated how quickly market conditions could change when demand weakened.
“Brisbane and Perth have gone from markets where buyers had very little choice and properties were selling quickly, to conditions where listings are rising and with less competition, buyers have more time to make a decision,” he said.
“Annual price growth is still positive in both cities, but that reflects stronger conditions from the first half of the year. The more recent figures show a market that's become much more challenging for vendors, particularly those expecting to achieve the prices they might have expected to secure six or 12 months ago.
Regional markets hold up better as rental growth moderates
Regional dwelling values fell 1.9% over the September quarter, compared with a 4.3% decline across the combined capitals. Over the year, regional values were still 5.6% higher, while capital city values had fallen 1.8%.
Regional sales activity has also proved more resilient, declining 1.6% over the year compared with a 9.1% fall across the combined capitals.
Mr Lawless said regional markets had generally been less exposed to the affordability pressures affecting capital city buyers.
“Property values are typically lower across regional Australia, which gives buyers more options within their budgets. That doesn't make regional markets immune to higher interest rates, but it helps explain why sales activity and values have held up better than in the capitals,” he said.
Meanwhile, rental growth has moderated, providing some relief for tenants following several years of substantial increases.
National rents rose 0.5% over the September quarter, the slowest quarterly growth since December 2024, while annual rental growth eased to 5.5%.
Gross rental yields increased to 3.85% nationally, their highest level since August 2019, as dwelling values declined.
Spring outlook depends on buyers returning
Mr Lawless said market conditions over the remainder of the year would depend heavily on upcoming inflation data and the RBA's November interest rate decision, with any further increase likely to weigh on already weak consumer confidence.
“We'd normally expect housing activity to pick up through October and November, but with four interest rate rises already this year and the possibility of more to come, there are likely to be substantial headwinds for the market through to the end of the year,” he said.
“Lower property prices will eventually help improve affordability, but that benefit is being offset by higher borrowing costs. Until households have more certainty about interest rates and their financial position, it's difficult to see a sustained recovery in buyer demand.”
Monthly Housing Chart Pack Summary – October 2026
- Residential real estate is valued at $12.1 trillion across 11.5 million dwellings, which is about two and a half times the $4.8 trillion held in Australian superannuation.
- National home values fell 1.1% in September 2026, the sixth monthly decline in a row. Values are now 5.2% below the March 2026 peak.
- New listings are 7.9% lower than a year ago, with 36,440 homes coming to market in the four weeks to 11 October. That is 11.9% below the five-year average, and the usual September lift in listings has been weak.
- Total listings are up 19.1% on last year at 145,573, and 2.7% above the five-year average. Earlier in the year, advertised stock was well below both 2025 levels and the five-year average.
- Median time on market was 41 days nationally, up from 26 days a year ago, with capital city homes selling fastest in Perth (26 days) and slowest in Canberra (50 days).
- Discounting rates are trending downwards. Capital city vendors are reducing their asking prices by a median of 4.4% to reach the contract price, while negotiation levels are more substantial across Regional Australia, where the median vendor discount is 3.9%.
- National rental growth moderated to 5.5% over the year to September, with a 0.5% rise in the September quarter, the smallest quarterly increase since December 2024.
- The national rental vacancy rate rose from 1.5% in February to 2.0% in September 2026, its highest level since January 2025, but remained below the pre-COVID decade average of 3.3%.
- Chart of the Mmonth: Current housing supply constraints present risks around meeting future housing demand. Strong population growth will require around 1.4 million additional homes by 2035, but existing supply constraints may prevent construction from keeping pace with demand, especially in Melbourne.
