The property market has now been falling for five months straight, and spring, usually its big revival, is arriving into conditions that remain distinctly cool. August marked another decline in national home values, confirming this is an entrenched correction rather than a passing dip. Here’s the plain-language guide to where things stand and what it means for you.
What the Data Shows
The numbers tell a consistent story. Cotality’s Home Value Index recorded a 0.9 per cent decline in national dwelling values during August, marking the fifth consecutive month of falling prices. The slowdown is no longer confined to a few premium markets, it’s now genuinely national, with Sydney, Melbourne, Brisbane and Adelaide all recording falls and even resilient Perth losing momentum.
Spring is opening weakly too. The first spring auction weekend saw almost a third fewer homes go under the hammer than a year earlier, and clearance rates have been sitting below 50 per cent on a final basis for months. Before August, total properties listed for sale nationally had reached their highest level since 2020, adding supply to a market with cautious demand.
Why the Downturn Has Dug In
Several forces are keeping prices under pressure. Higher interest rates, held at 4.35 per cent with some economists now warning of a possible further rise, continue to constrain how much buyers can borrow. The government’s May property tax changes (to negative gearing and capital gains tax for investors from mid-2027) have made investors more cautious. And rising stock levels mean more choice for buyers, which reduces the urgency to compete and puts downward pressure on prices.
The combination, constrained borrowing, cautious investors, and more supply meeting softer demand, is why the correction has become entrenched rather than brief. Each month of falls reinforces the cautious sentiment that drives the next.
What Spring Could Bring
Spring is the key test. Traditionally it brings more listings, and if sellers list in the usual numbers into already-soft demand, the extra supply could push prices down further, longer selling times, bigger vendor discounts, and more selective buyers. If sellers hold back, wary of weak conditions, the market may just drift.
Either way, the near-term direction looks soft. But it’s worth remembering that beneath the correction, the structural drivers of Australian property, population growth, chronic undersupply and rising national wealth, remain intact, which is why most forecasters see this as a correction from elevated levels rather than a sustained collapse.
What It Means If You’re Buying
The entrenched downturn favours prepared buyers. Falling prices, rising listings and sub-50 per cent clearance rates give you genuine negotiating power and, increasingly, more choice as stock builds. The strategy: get your finance sorted, price your offers to recent comparable sales, treat passed-in auctions as negotiating opportunities, and use the leverage the market is giving you. With some economists warning rates could even rise, don’t over-extend, stress-test your budget against a higher rate rather than assuming relief is coming.
What It Means If You’re Selling
Realism is essential, and more so with each month of falls. In a market that’s been declining for five months with cautious buyers, a home priced to recent comparable sales attracts genuine interest, while one priced to a peak that’s now well behind us sits unsold and grows stale. Present well, price to the current market, and consider whether private treaty suits your property better than an auction while clearance rates stay soft. Meeting the market is what secures a sale now. This is general information, not financial advice.
The Bottom Line
Five straight months of falling values, with spring opening weakly, confirms Australia’s housing downturn has dug in and gone national. High rates, cautious investors and rising supply are keeping prices under pressure, and spring’s extra listings could add to it. For buyers, it’s real negotiating power and growing choice, though don’t over-extend with rates uncertain; for sellers, it’s a clear call to price realistically. Watch the listings and clearance data through spring, because they’ll shape how deep this correction runs.
Epik Wire covers the property market in plain language for buyers, sellers and owners. Subscribe to our newsletter to stay informed.
