Home values fall for sixth month as rate rise adds to buyer pressure

Australian home values fell for a sixth consecutive month in September, with the housing slowdown spreading across almost every capital city before the Reserve Bank’s latest interest rate rise.

Cotality’s national Home Value Index dropped 1.1 per cent for the month, leaving dwelling values 5.2 per cent below their March peak. Brisbane recorded the steepest monthly fall among the capitals at 1.5 per cent, followed by Sydney at 1.4 per cent. Melbourne values fell 0.7 per cent, while Darwin was the only capital to record an increase, up 0.4 per cent.

The figures describe a market that was already weakening when the Reserve Bank lifted the cash rate from 4.35 to 4.60 per cent on Tuesday. It was the fourth increase this year. The bank cited higher global energy prices, stronger-than-expected inflation and continuing pressure on the economy’s capacity. It also noted that housing prices had fallen in most capital cities and new housing loans had declined noticeably.

Cotality research director Tim Lawless said the downturn had reached almost every part of the capital city market. “97% of capital city suburbs were down in value over the three months to end of September,” he said.

Sydney values are now 8.6 per cent below their February peak. In Melbourne, they are 7.2 per cent below their November 2025 cyclical high and 7.5 per cent below the record high reached in March 2022. Despite September’s falls, Perth and Darwin remain more than 10 per cent higher than a year ago, showing how differently the downturn has affected each market.

Brisbane recorded the steepest monthly fall among the capitals at 1.5 per cent, followed by Sydney at 1.4 per cent. Melbourne values fell 0.7 per cent, while Darwin was the only capital to record an increase, up 0.4 per cent

Fewer homes are changing hands. Cotality estimates sales over the past three months were 19.1 per cent lower than a year earlier and 13.3 per cent below the five-year average. Brisbane recorded a 27.2 per cent annual fall in sales, followed by Sydney at 26.5 per cent and Perth at 24.2 per cent.

Homes are also taking longer to sell. Across the combined capitals, the median time on market has risen from 23 days a year ago to 39 days. Total advertised stock is 23.1 per cent higher, even though fewer new listings are coming onto the market.

“Inventory levels have risen sharply because the rate of sale has fallen even faster,” Lawless said. The extra stock gives buyers more choice, he added, but many lack the confidence or financial capacity to purchase.

Tuesday’s rate decision could tighten that constraint further. Cotality estimated after the announcement that the four increases since February had reduced borrowing capacity for a household on median income by almost $90,000, or about 9 per cent. The ACTU warned that higher repayments would strain workers and put jobs at risk, while the Australian Chamber of Commerce and Industry called for spending restraint and productivity reforms. Treasurer Jim Chalmers said the government was providing cost-of-living relief while addressing inflation and productivity.

The Reserve Bank said it would consider another increase if needed to bring inflation back to target. For the housing market, the September figures show the decline was well established before the latest rise takes effect.