Home Values Fall for a Sixth Straight Month as Sydney Leads the Correction

Australian home values fell again in September, the sixth consecutive monthly decline, according to Cotality's Home Value Index released on 1 October. The national index dropped 1.1 per cent over the month and now sits 5.2 per cent below the record high reached in March 2026.

The weakness is broad. Every capital except Darwin recorded a fall, and Cotality's research director Tim Lawless noted that 97 per cent of capital-city suburbs lost value over the three months to the end of September.

Sydney leads, Brisbane joins in

Sydney values fell 1.4 per cent in September and are down 7.0 per cent over the year, leaving the city 8.6 per cent below its February peak. Cotality says the decline is now marginally deeper than at the same stage of the 2022-23 downturn. The median Sydney dwelling is valued at $1,198,596.

Brisbane recorded the sharpest monthly fall of the capitals, down 1.5 per cent, a striking turn for what had been one of the strongest markets. Melbourne's decline was milder at 0.7 per cent. Perth and Darwin still show double-digit annual gains, of 10.1 and 11.9 per cent, reflecting their earlier growth run.

Fewer sales, more stock

Turnover has dropped sharply. Cotality estimates home sales over the past three months were 19.1 per cent lower than a year earlier nationally, with Sydney down 26.5 per cent. Although fewer new listings are coming to market, total advertised inventory across the capitals is 23.1 per cent higher than a year ago, because homes are selling more slowly. The median capital-city home now takes 39 days to sell, compared with 23 days a year earlier.

Cotality attributes the downturn to affordability constraints, higher interest rates, elevated living costs and weak consumer sentiment, along with less favourable tax settings for investors announced in the Federal Budget.

What it means for prestige buyers and sellers

For buyers with secure finance, the shift means more choice, less competition and more room to negotiate. For sellers, careful pricing and presentation matter more than they did a year ago, as campaigns are running longer. Cotality's central expectation is a gradual drift lower in values rather than a sharp correction, supported by a still-resilient labour market and a persistent shortage of new housing supply.