ApartmentsLindsay SaundersThu 22 Oct 26
House Prices Suffer Record Fall as All Capital Cities Slide
Australia’s housing downturn has spread to every capital city for the first time in 15 years, with house prices recording their steepest quarterly fall on record as borrowing constraints and weaker buyer confidence hit the market.
Combined capital city house prices fell 4.7 per cent, or $59,870, in the September quarter to $1.23 million, according to Domain’s September 2026 House Price Report.
Unit prices also recorded their sharpest quarterly decline in seven-and-a-half years, falling 3.5 per cent to $702,858, signalling the downturn has extended beyond the detached housing market.
It was the second consecutive quarter of falling prices for both houses and units, while annual growth in combined capital city house prices turned negative for the first time in more than three years.
Perth recorded the steepest decline, with house prices falling a record 7.4 per cent to $1.12 million. Unit prices in the Western Australian capital also fell a record 6.5 per cent.
Brisbane house prices dropped 5.4 per cent to $1.15 million, ending almost four years of uninterrupted growth, while Adelaide recorded a 3 per cent fall to $1.1 million, matching its steepest quarterly decline on record.
Sydney house prices fell 4.7 per cent to $1.66 million, their largest quarterly decline in four years, while Melbourne prices dropped 3.3 per cent to $1.01 million.
Melbourne’s median house price is now approaching the $1 million threshold it crossed in June 2021, after falling 6.7 per cent from its December 2025 peak.
Houses, apartments media prices
Domain chief residential economist Nicola Powell said higher interest rates and persistent cost-of-living pressures were reducing borrowing capacity and weakening buyers’ willingness to transact.
She said the downturn had broadened from weakness concentrated in some cities to a market-wide decline, with affordability constraints catching up with markets that had led the previous growth cycle.
Selling conditions have also shifted towards buyers, with longer selling times, increased discounting and lower auction clearance rates giving purchasers greater scope to negotiate.
Powell said buyers with secure finances and the capacity to transact could find opportunities as sellers adjusted their price expectations.
However, the recovery would depend on improved buyer confidence and purchasing power, with uncertainty around interest rates, living costs and policy settings continuing to weigh on the market.
