Australian home values fell 1.1% in September 2026, the sixth monthly decline in a row, according to Cotality’s Home Value Index released on 1 October. National values are now 5.2% below their March 2026 record.
That is a faster pace than August’s 0.9% decline, which we covered in our look at how the market tipped toward buyers. The difference this month is how widespread the falls have become.
What the September figures show
Every capital city except Darwin recorded a fall over the month. Cotality’s research director Tim Lawless said “97% of capital city suburbs were down in value” over the three months to the end of September, describing it as a broad-based negative cycle.
Monthly changes in dwelling values to 30 September 2026, per Cotality:
- Brisbane: down 1.5%, the sharpest monthly fall among the capitals
- Sydney: down 1.4%
- Adelaide: down 1.3%
- Perth: down 1.2%
- Canberra: down 1.1%
- Melbourne: down 0.7%
- Hobart: down 0.5%
- Darwin: up 0.4%, the only capital to rise
Over the September quarter, Sydney values fell 4.9%, with Brisbane and Perth each down 4.7%. Regional markets are holding up better, down 0.7% in September but still 5.6% higher over the year, compared with a 1.8% annual decline across the combined capitals. Nationally, values are flat over twelve months.
Sydney is leading the correction. Cotality notes its 8.6% decline is marginally deeper than at the equivalent stage of the 2022 to 2023 downturn. Melbourne values are 7.2% below their November 2025 high. Brisbane, one of the strongest markets of recent years, is now 5.4% below its May peak, though it remains 5.9% higher than a year ago.
Why prices are falling
Cotality points to a familiar mix: stretched affordability, higher interest rates, elevated living costs and weak consumer confidence. The Reserve Bank lifted the cash rate to 4.60% on 29 September, its fourth increase this year, and the big four banks are passing it on from 9 October, as we explained in our coverage of the September rate hike.
The effect shows up most clearly in sales. Cotality estimates the number of home sales over the past three months was 19.1% lower than a year ago and 13.3% below the five-year average. Brisbane sales were down 27.2% on a year earlier, Sydney 26.5% and Perth 24.2%.
Fewer sales means homes sit on the market longer. Across the capitals, new listings were 9.2% below a year ago, yet total advertised stock was 23.1% higher because homes are selling more slowly. The median capital city home took 39 days to sell, up from 23 days a year ago. Lawless observed that buyers have more choice, but many lack the confidence or borrowing capacity to act.
How exposed are home owners?
Falling values make headlines, but for most owners a paper loss only becomes a real one if they need to sell or refinance. The RBA’s Financial Stability Review, published on 1 October, estimated that fewer than 1% of borrowers owe more than their home is worth. Even in a stress scenario where prices fell a further 20% from current levels, the RBA estimated only around 5% of mortgages would slip into negative equity.
The review also found that around 2% of variable rate owner-occupiers have a cash flow shortfall, and that the median borrower holds offset and redraw balances worth more than a year of scheduled repayments. Arrears have edged up this year but remain around pre-pandemic levels.
Recent buyers with small deposits are the group to watch. Someone who bought in Sydney or Melbourne near the peak with a 5% deposit may already have little or no equity, which can limit their ability to refinance to a cheaper loan. If that sounds like you, speak to your lender before problems build.
A falling market only costs you if you are forced to sell. Protect your cash buffer, and your timing stays your own.
What it means for buyers and sellers
This is general information only, not personal financial or property advice. With that in mind, a few points stand out:
- Buyers have more leverage. Longer selling times and higher stock levels typically give buyers more room to negotiate on price and conditions such as longer settlements or building and pest clauses.
- Borrowing power matters more than price. Each rate rise reduces how much lenders will approve. Check your pre-approval is still current before you bid, since a lender may reassess it at today’s rates.
- Sellers need realistic pricing. With homes taking around 39 days to sell in the capitals, pricing from last summer’s results may mean a long campaign. Recent comparable sales are the better guide.
- Do not try to call the bottom. Nobody knows when the decline will end. The RBA next meets on 3 November, and the September quarter CPI due in late October will shape that decision.
If you are weighing up a purchase or sale in this market, it helps to understand how to time and plan a property move before committing to a price.
The bottom line
Australian home values fell 1.1% in September 2026, the sixth straight monthly decline, and almost every capital city suburb has lost value over the past three months. Sydney and Melbourne are leading the falls, while Darwin and regional markets remain the exceptions. For most owners the RBA’s data suggests the risk is manageable, but recent buyers with small deposits have the least room to move. Buyers now have more choice and more bargaining power, if they can secure the finance. Figures are from Cotality’s Home Value Index and the RBA’s October 2026 Financial Stability Review, both released on 1 October 2026, and may be revised. Check the latest data at Cotality and the Reserve Bank of Australia.