Home values fell for a sixth month and Brisbane fell hardest. Buyers have the upper hand, if they can borrow.

National home values fell 1.1 per cent in September, according to Cotality's Home Value Index released on 1 October. It is the sixth monthly fall in a row. Values are down 3.7 per cent over the quarter and 3.0 per cent so far this year, and they now sit 5.2 per cent below the record set in March, with the national median dwelling value at $899,236. Over a full year, values are exactly flat. The decline is broad: Cotality says 97 per cent of capital city suburbs fell over the three months to September.

City by city

• Sydney: down 1.4 per cent in September and 7.0 per cent over the year. Median $1,198,596, now 8.6 per cent below the February peak. Cotality says the fall is marginally deeper than at the same stage of the 2022 to 2023 downturn.
• Melbourne: down 0.7 per cent, 6.2 per cent lower over the year, median $780,550.
• Brisbane: down 1.5 per cent, the sharpest monthly fall of any capital, and 5.4 per cent below its May peak. Still up 5.9 per cent on a year ago. Median $1,048,880.
• Adelaide: down 1.3 per cent, up 6.5 per cent over the year, median $928,560.
• Perth: down 1.2 per cent and 6.0 per cent below its April peak, though still up 10.1 per cent over the year. Median $975,022.
• Hobart: down 0.5 per cent, median $741,496.
• Canberra: down 1.1 per cent, median $861,744.
• Darwin: up 0.4 per cent, the only capital to rise, and 11.9 per cent higher over the year. Median $633,431.
• Regional Australia: down 0.7 per cent, up 5.6 per cent over the year.

Buyers have choice, and not much confidence

The number of homes for sale has climbed because they are not selling. Cotality's research director Tim Lawless put it plainly: "inventory levels have risen sharply because the rate of sale has fallen even faster." Total listings across the capitals are up about 23 per cent on a year ago even though fewer new listings are coming on, estimated sales over the past three months were 19 per cent lower than a year earlier, and the typical home now takes 39 days to sell against 23 a year ago.

Auctions tell the same story. The final clearance rate across the capitals was 45.4 per cent in the week to 4 October, against 67.4 per cent a year earlier, and only 21.2 per cent in Brisbane, its lowest since November 2008. Cotality says the rate rise likely contributed.

How far it could go

Cotality's central case is a gradual drift lower rather than a crash, with the risks tilted to the downside and a possible further rate rise in November. Lawless told the ABC a peak to trough fall of 10 to 15 per cent is a fairly reasonable estimate, with values falling into 2027. AMP's Shane Oliver called it already the biggest downturn in about 40 years, with a worst case of around 20 per cent. The Reserve Bank's Financial Stability Review found fewer than 1 per cent of borrowers in negative equity today. Recent buyers with small deposits are the most exposed, and the RBA flagged that 5% Deposit Scheme borrowers are more likely to be in that position, although the government guarantee limits the risk to lenders. The scheme has helped 102,594 first home buyers since it was expanded on 1 October 2025.

Rents keep rising, more slowly

Rents rose 5.5 per cent over the year to September, down from 5.7 per cent, and the national vacancy rate rose to 2.0 per cent from a record low of 1.5 per cent in February. With prices falling and rents still rising, the national gross rental yield reached 3.85 per cent, the highest since August 2019. Darwin's is 6.5 per cent and Sydney's 3.4 per cent.

What to do with this

1. If you are buying, get pre-approval rechecked at the new assessment rate before you bid. A limit set before 29 September has fallen with the rate rise.
2. Negotiate. With homes taking 39 days to sell and clearance rates below 50 per cent, a pre-auction offer or a price below the guide is a reasonable opening, especially in Brisbane, Perth and Adelaide where the falls are newest.
3. If you are refinancing, expect a lower valuation than you would have got in March. If it pushes your loan above 80 per cent of the value, ask a broker which lenders will still take the refinance without lenders mortgage insurance.
4. If you are selling and buying, sell first or line up a bridging option. In a falling market, the risk is owning two homes while the one you are selling keeps dropping.
5. If you are an investor, the yield maths has improved, but run the numbers at 4.85 per cent and remember the negative gearing changes that start in July 2027.

Disclosure: Your Finance Guide works in conjunction with ALG Australian Lending Group (ACL 505575). Licensed brokers who meet our criteria pay Your Finance Guide a partnership fee to receive enquiries from this site. The fee is paid by the broker, not by you, and is not added to your loan. Brokers are usually also paid a commission by the lender when a loan settles. Figures are from Cotality's September 2026 index and weekly releases, SQM Research and the RBA, as published up to 8 October 2026.