Australia's Housing Downturn Deepens as Prices Fall for Fifth Straight Month

Australian home prices declined for a fifth consecutive month in August, with the housing downturn broadening across major cities and regional areas, according to data released Tuesday from property consultant Cotality.

Nationally, home values fell 0.9% in August, following a downwardly revised 1.2% drop in July. Prices now sit 3.6% below their peak, though they remain 2.7% higher than a year ago.

Sydney and Melbourne led the monthly slide, with values down 1.4% and 1.1% respectively. The correction also reached previously booming markets, with Brisbane and Perth each falling 1.0% and 0.8% after posting double-digit gains earlier this year.

Sydney's decline is particularly sharp, with prices down 7.1% from their February peak — a faster pace than the 2022-23 correction, when the central bank's 425 basis points of rate hikes drove values down 6.6%.

"The softer trend in values is underpinned by weaker transaction activity," said Tim Lawless, Cotality's research director. Sales over the past three months were down 15.5% from a year earlier. "Longer selling times, larger vendor discounting and persistently low auction clearance rates all point to a buyer's market, yet buyers are lacking the confidence to transact at the moment," he added.

The slowdown in housing turnover carries broader economic implications, given the sector's links to real estate services, trades, and construction. Housing credit growth has already begun to slow.

Relief appears distant. Government tax changes have cooled investor demand, and the Reserve Bank of Australia has raised the cash rate three times this year to 4.35%. Markets are fully pricing in another hike after July's hot inflation reading.