Cotality Home Value Index October 2026: Are House Prices Still Falling?
By Scott Levoune, founder of Wealth Through Property · Published · Updated
Yes, Australian house prices are still falling. Cotality's Home Value Index for October 2026, released on 1 October, shows national dwelling values fell 1.1% in September. That is the sixth monthly fall in a row. Values are now 5.2% below the March 2026 peak and flat over the year at 0.0%, with a national median value of $899,236. Every capital city except Darwin fell. Below are every city's figures, the regions, rents, what the banks now forecast, and what it all means if you are buying a home, an investment property or an Airbnb.
Key Takeaway
Cotality's October 2026 report shows a broad, orderly decline rather than a crash. National values are 5.2% below the March peak, the annual change is flat and regional markets are still up 5.6% over the year. Higher interest rates, lower borrowing power, stretched affordability, weak confidence and the announced investor tax changes are the main drivers. For buyers, the opportunity is negotiating power. The risk is buying on hope rather than numbers.
The Numbers In One Place
National values fell 1.1% in September and 3.7% over the quarter. The national median is $899,236. Capital city homes took a median 39 days to sell, up from 23 a year earlier, and capital city stock was 23.1% higher. Rental vacancy rose to 2.0%. The cash rate is 4.60% and the next RBA decision is on 3 November 2026.
Before You Make An Offer
Use the softer market to slow down, not to rush.
1Use time on market: Ask how long a listing has been on the market and how the price guide has changed.
2Keep a fall-back plan: Make sure the property still works as a normal rental if short-term letting stalls.
3Then follow the plan: The two-week plan near the end covers finance, rules and income checks step by step.
Cotality Home Value Index October 2026: The Headline Figures
Cotality (the company formerly known as CoreLogic Australia) publishes its Home Value Index at the start of each month. The October 2026 report was released at 12:01am on Thursday 1 October 2026 and covers the month of September. The index uses a hedonic method, which adjusts for the type of homes that happen to sell in a month, so it gives a truer read on values than a simple median sale price.
The headline was a 1.1% fall in national dwelling values in September, the sixth straight monthly decline. That takes the fall since the March 2026 peak to 5.2%. Over the year, national values are flat at 0.0%, because the falls since March have cancelled out the growth recorded earlier. Westpac's economists noted that the previous two months were revised lower again, taking a further 0.4% off prices.
National, SeptemberDown 1.1% for the month and 3.7% over the quarter. Annual change 0.0%.
From the peakNational values are 5.2% below the March 2026 high. Combined capitals are 6.4% below their March peak.
How broad the fall is97% of capital city suburbs fell over the three months to the end of September, and 71% of regional sub-markets fell in the month.
National median value$899,236 across all dwellings, with houses at $979,193 and units at $727,818.
Capitals versus regionsCombined capitals down 1.8% over the year. Combined regional markets up 5.6%.
Total return3.5% nationally over the year once rental income is added to the flat change in value.
"97% of capital city suburbs were down in value over the three months to end of September, highlighting the broad-based scope of this negative housing cycle." Tim Lawless, Cotality research director
House Prices By Capital City: The September 2026 Table
Here are Cotality's figures for every capital city, the combined capitals, the combined regions and the national index. The median value is Cotality's estimate for all dwellings (houses and units together), not the median sale price.
Market
Month
Quarter
Year
Median value
Gross yield
Sydney
-1.4%
-4.9%
-7.0%
$1,198,596
3.4%
Melbourne
-0.7%
-3.4%
-6.2%
$780,550
4.1%
Brisbane
-1.5%
-4.7%
+5.9%
$1,048,880
3.5%
Adelaide
-1.3%
-2.7%
+6.5%
$928,560
3.6%
Perth
-1.2%
-4.7%
+10.1%
$975,022
4.0%
Hobart
-0.5%
-1.2%
+7.0%
$741,496
4.4%
Darwin
+0.4%
+0.5%
+11.9%
$633,431
6.5%
Canberra
-1.1%
-3.2%
-1.6%
$861,744
4.4%
Combined capitals
-1.2%
-4.3%
-1.8%
$973,525
3.7%
Combined regions
-0.7%
-1.9%
+5.6%
$758,931
4.3%
National
-1.1%
-3.7%
0.0%
$899,236
3.9%
Source: Cotality Home Value Index, October 2026 report, figures to 30 September 2026. Brisbane is now the second most expensive capital after Sydney, ahead of Perth and Adelaide.
SydneyDown 7.0% over the year and 8.6% below its February 2026 peak. Cotality says this fall is marginally deeper than the same stage of the 2022–23 downturn.
MelbourneDown 6.2% over the year, 7.2% below its November 2025 high and 7.5% below its March 2022 record.
BrisbaneThe sharpest monthly fall of the capitals at 1.5%, but still up 5.9% over the year after strong earlier gains.
PerthDown 1.2% in the month and 6.0% below its April 2026 peak, yet still up 10.1% over the year.
DarwinThe only capital to rise in September, up 0.4%, and the strongest annual growth at 11.9%.
Hobart and CanberraHobart fell a milder 0.5% in the month. Canberra fell 1.1% and is down 1.6% over the year.
The pattern has shifted through 2026. Sydney and Melbourne turned first and are now well into negative annual change. Brisbane, Adelaide and Perth, which led the country for growth until recently, have seen their monthly falls speed up and are now falling faster than Melbourne, although their annual figures stay positive because of the gains made earlier in the year.
Houses Versus Units: Which Are Falling Faster?
Houses are falling a little faster than units. Over the September quarter national house values fell 3.9%, against 2.7% for units, and both are flat over the year.
National
Month
Quarter
Year
Median value
Gross yield
Total return
Houses
-1.2%
-3.9%
0.0%
$979,193
3.6%
3.2%
Units
-0.8%
-2.7%
0.0%
$727,818
4.7%
4.5%
Westpac's economists made the same point in their 1 October bulletin: unit prices and lower price tiers are tracking slightly milder falls than houses and top-tier homes. That matters for short-term rental buyers, because many city and holiday stays sit in exactly those apartment and lower-priced segments, which also carry the higher yields.
Why House Prices Are Falling: Rates, Borrowing Power, Tax And Confidence
Cotality puts the downturn down to several pressures that have built through 2026. None is new on its own. Together they have cut how much buyers can pay and how willing they are to commit.
Higher interest ratesFour RBA rises in 2026, the latest to 4.60% on 29 September, have cut borrowing capacity and lifted repayments.
AffordabilityValues are still high relative to incomes, and the deposit hurdle is still large for first home buyers.
Living costsHigh living costs are narrowing the pool of buyers who can qualify for a loan.
Investor tax settingsCotality links a sharp reduction in investor demand to the less favourable negative gearing and capital gains tax arrangements announced in the Federal Budget.
ConfidenceHousehold confidence is weak, and weak sentiment usually means fewer sales.
What is holding it upA reasonably tight labour market and persistently low new housing supply, which Cotality says should limit the risk of a sharper fall.
Cotality's central view is a gradual drift lower in values rather than a sharp correction, with results varying widely by region, price point and type of buyer. It also says the risks have shifted to the downside.
Negative Gearing And Capital Gains Tax Changes: What Investors Need To Know
The investor tax changes are a big part of why investor demand has dropped, so it is worth being clear on what Treasury has actually announced. These are Budget 2026–27 measures, and Treasury's page says the government "will" make them, so check their status before you rely on them.
Negative gearingFrom 1 July 2027, negative gearing of residential property will be limited to new builds.
Properties already heldProperties held before 7:30pm AEST on 12 May 2026, when the change was announced, are exempt.
Established homes bought laterLosses can still offset other residential property income, including capital gains, and can be carried forward, but not wages.
Capital gains taxFrom 1 July 2027, the 50% discount is replaced by an inflation-based discount with a minimum 30% tax rate on gains that accrue from that date.
For an Airbnb buyer, the practical point is that a property needs to stand on its own income, not on a tax loss. A well-chosen, well-run short-term rental that earns more than it costs is much less exposed to these changes than a property bought to be negatively geared. We cover what the Budget means for home buyers in buying a home after the 2026 Budget changes. Get tax advice for your own situation.
Interest Rates: 4.60% And The 3 November RBA Decision
The Reserve Bank's Monetary Policy Board raised the cash rate target by 25 basis points to 4.60% on 29 September 2026, the fourth rise of the year. The decision was unanimous. The Board said "some of the upside risks flagged in August are materialising" and that "the conflict in the Middle East has broadened and global energy prices are now much higher than had been assumed in the August forecasts".
The statement spoke about housing directly: "housing prices have fallen in most capital cities and new housing loans have declined noticeably." The minutes, published on 13 October, went further. They said housing prices "had declined by more than expected" and that new housing loan commitments "had fallen sharply, led by lending to investors". Even so, the Board said it will do what is necessary, "including increasing the cash rate target further if needed."
Cash rate now4.60%, set on 29 September 2026.
Next decisionsThe Board meets on 2 and 3 November 2026, then on 7 and 8 December. The decision is announced on the second day.
What Westpac expectsWestpac's October Market Outlook says the RBA looks set to follow up in November, taking the cash rate to a new cycle high.
For buyers, the near-term rate risk is still upward. Plan for rates to hold or rise again, not for relief before summer. Our explainer on the September rate rise covers what it means for repayments, and how to stress-test your Airbnb numbers shows how to test a purchase against another rise.
Will House Prices Keep Falling? What The Forecasts Say
Most forecasters expect more falls before prices recover in 2027. Nobody knows exactly where the bottom is, so treat these as informed opinions, not promises. The national index has already fallen 5.2% from its peak.
Who
When
Forecast
CommBank economists
1 Sep 2026
About a 9% national fall from peak to trough: about 13% in Sydney, about 12% in Melbourne and about 8% in Brisbane, Perth and Adelaide. The adjustment continues through the first half of 2027, then prices rise about 2% over 2027, a recovery CommBank says relies partly on RBA rate cuts in May and August 2027.
Australian Property Institute survey of 384 property experts (reported by CommBank)
14 Oct 2026
An 8% to 11% fall from the March peak, with a recovery expected to start around September 2027.
Cotality
1 Oct 2026
A gradual drift lower in values, with the risks shifted to the downside, but a tight labour market and low new supply limiting the risk of a sharper fall.
Westpac
1 Oct 2026
Housing momentum looks set to stay weak into year-end.
If these forecasts are right, national values have roughly half to two-thirds of their fall behind them. That does not mean waiting for the bottom is the right move. Buyers who wait for proof of the bottom usually find that prices have already turned, and borrowing power can shrink further if rates rise again. The better question is whether a particular property works at today's price, today's rate and a conservative income.
Fewer Sales, More Stock, Longer Selling Times
The selling conditions behind the index tell a buyer more about negotiating power than the headline does.
Sales volumesEstimated home sales over the past three months were 19.1% lower than a year earlier nationally and 13.3% below the previous five-year average.
Biggest drops in salesBrisbane down 27.2%, Sydney down 26.5% and Perth down 24.2% on a year earlier.
New listingsAcross the combined capitals, the flow of new listings was 9.2% lower than a year ago.
Total stockAcross the combined capitals, total advertised stock was 23.1% higher than a year ago.
Days to sellA median of 39 days in the capitals, compared with 23 days a year earlier.
Buyers have more choiceStock is building because homes are taking longer to sell, not because more owners are listing.
Sixteen extra days on market is useful in a practical way. It is time to check council rules, strata by-laws, booking data and building condition without the pressure of a weekend deadline.
"The lift in available stock is improving choice for buyers, but ironically, many prospective buyers don't have the confidence or financial capacity to buy at the moment." Tim Lawless, Cotality
Regional Property Markets Are Holding Up Better, For Now
Most Australian holiday-let markets sit outside the capitals, so the regional figures matter more to short-term rental owners than the Sydney headline. Regional dwelling values were up 5.6% over the year to September, against a 1.8% fall across the combined capitals. Regional values fell 0.7% in September and are 2.2% below their May 2026 peak.
Region
Month
Year
Median value
From peak
Regional NSW
-0.7%
+3.4%
$824,912
-2.8% (Apr 2026)
Regional Victoria
-0.3%
+3.6%
$634,360
-1.6% (May 2026)
Regional Queensland
-0.9%
+6.3%
$834,425
-2.8% (May 2026)
Regional SA
-0.1%
+10.7%
$564,017
-0.1% (Aug 2026)
Regional WA
+0.1%
+14.1%
$715,643
-1.2% (May 2026)
Regional Tasmania
-0.1%
+11.6%
$622,460
-0.1% (Aug 2026)
Several of the regional areas Cotality lists among the strongest for annual growth are holiday destinations. Augusta to Margaret River and Busselton in WA was up 11.4% over the year, with a median of $1,133,236. The Fleurieu and Kangaroo Island region of SA was up 6.9%, Tasmania's South East Coast was up 8.2%, and Huon to Bruny Island was up 6.0%.
Two cautions apply. Smaller regional markets can move sharply either way, and a market that is still growing gives a buyer less room to negotiate. Strength is a reason to look closely, not to pay any price. Our guide to finding the best Airbnb investment locations explains how we test an area before we buy there.
Rents, Vacancy And Rental Yields: What Changed For Landlords
The rental figures show the long-term rental market starting to loosen after years of extreme tightness.
Vacancy risingThe national rental vacancy rate reached 2.0% in September, up from a record low of 1.5% in February 2026 and the highest since January 2025. The pre-COVID decade average was 3.3%.
Vacancy by cityHobart is highest at 3.0%, then Sydney at 2.3% and Brisbane and Perth at 2.1%. Adelaide is tightest at 1.4%.
Rent growth slowingNational rents rose 0.3% in September in seasonally adjusted terms, the smallest monthly rise since May 2025. Annual growth is 5.5%.
Yields improvingGross rental yields rose to 3.85% nationally, the highest since August 2019. Capitals range from 3.4% in Sydney to 6.5% in Darwin.
Cotality was careful on cash flow. Even with yields rising, it says "opportunities for neutral to positive cash flow remain low", once interest, insurance, maintenance and strata costs are counted.
Long-term renting is still a sound, simple strategy, and rising yields help it. But when vacancy rises and rent growth slows, a landlord can do little until the lease ends. A short-term rental owner can change prices, minimum stays and booking channels from one week to the next. That control is the core of the case for short-term letting, and it matters more in a softer market than a hot one.
What This Means For Airbnb And Short-Term Rental Buyers
A softer market changes who holds the power in a sale. It does not change what makes a short-term rental work: the right location, rules that allow it, a property guests want, and income that covers the costs with room to spare. The opportunity is that a buyer now has the time and leverage to insist on all four.
More choiceStock is up, so there is less need to compromise on layout, parking or location.
More timeLonger selling times allow proper checks on rules, strata, condition and booking demand before an offer.
More negotiating roomFinance and building and pest conditions are easier to secure when a vendor has fewer buyers.
Less competition from investorsCotality reports a sharp drop in investor demand, which leaves fewer competing buyers in many segments.
Tighter financeBorrowing capacity has fallen with each rate rise, so the most you can pay may be lower than it was in March.
Possible further fallsNobody can pick the bottom. Buy on income that works today, not on a quick rebound.
A common worry for buyers right now is overpaying in a falling market. Selling agents still use the same tactics in a soft market: talk of other interested buyers who never appear, price guides set low to draw a crowd, and a call for "best and final" offers to rush a decision. The defence is your own evidence. Know what comparable homes have actually sold for in the last three months, how long this one has been listed and what it earns, and set your walk-away price before you inspect. Some of the best-value homes never reach the portals at all, which is why off-market access matters more when stock is building.
You do not need to buy at the lowest price of the cycle. You need a property that earns well, at a price the numbers support, with finance you can comfortably carry.
Worked Example: What A Softer Price Does To Your Numbers
The following figures are illustrative only. They are not a forecast for any property or market, and they use round numbers to show how it works.
Imagine a coastal holiday home that would have been priced at $760,000 earlier in the year, close to the combined regional median of $758,931. In a softer market, a buyer negotiates 5% off and pays $722,000.
Smaller loanAt an 80% loan-to-value ratio, the loan is $30,400 smaller (illustrative).
Lower interestAt an illustrative 6.45% rate, that is about $1,960 a year less interest on an interest-only basis.
Smaller depositThe 20% deposit falls by $7,600, before stamp duty, which also falls with the price.
The saving is real, but notice its size. A $1,960 yearly interest saving is about six nights at an illustrative $320 a night. The purchase price helps, but the income the property earns every week has a much bigger effect on whether the investment works.
Price is one lever. Income is the bigger one.
Negotiate hard, but spend most of your energy on the questions that decide revenue: demand, rules, guest appeal and how well the property will be run.
Long-Term Rental Versus Airbnb On The Same Home
Here is the same illustrative $760,000 regional home run two ways. These figures are illustrations only. Real results depend on the property, the market, the season and how well it is managed. Cleaning fees are assumed to be charged to guests and paid to the cleaner, so they are left out of both sides.
Illustrative, per year
Long-term rental
Short-term rental
Income
$32,680 (4.3% regional gross yield)
$67,840 (212 nights, 58% occupancy, at $320)
Management
-$2,290 (7%)
-$13,570 (an illustrative 20% of total income)
Vacancy or platform fees
-$1,260 (two weeks between tenants)
-$3,390 (5% platform and channel fees)
Utilities, internet and guest supplies
Paid by the tenant
-$6,500
Furniture and linen replacement
Not needed
-$4,000
Insurance
-$1,800 (landlord)
-$2,200 (short-term rental)
Income before loan, rates and maintenance
About $27,330
About $38,180
The 20% management figure is a generic illustration taken on total income. WTP charges 12.5% falling to 3% of what the home earns after platform fees and cleaning, which would leave more for the owner. In this illustration the short-term rental earns about $10,850 a year more from the same home. Now test it. At 45% occupancy, or 164 nights, the same short-term rental makes about $26,660 after the same costs, slightly less than the long-term rental. A well-chosen, well-run short-term rental can earn materially more, but the advantage depends on occupancy and nightly rate.
The extra income of a short-term rental is earned, not given.
It comes from buying where guests want to stay and running the property like a business.
Borrowing Power Is The Real Limit
For most buyers in late 2026, the limit is not the price of the property. It is what the bank will lend. Lenders assess new home loans at the loan rate plus a serviceability buffer. APRA confirmed on 28 May 2026 that the buffer stays at 3 percentage points, and that banks can still make up to 20% of new lending to borrowers with a debt-to-income ratio of six times or more.
Here is how one rate rise flows through, using illustrative figures. A borrower whose budget supports a $600,000 loan assessed at 9.20% (a 6.20% loan rate plus the 3-point buffer) has an assessed repayment of about $4,914 a month over 30 years. If the loan rate rises 0.25 points to 6.45%, the assessment rate becomes 9.45%. The same $4,914 a month now supports a loan of only about $587,000.
Before the rise (illustrative)Assessed at 9.20%: $600,000 maximum loan.
After the rise (illustrative)Assessed at 9.45%: about $587,000 maximum loan, roughly $13,000 less.
Actual repayment changeOn a $600,000 principal and interest loan over 30 years, about $3,675 a month at 6.20% and $3,773 at 6.45%.
Short-term rental buyers have one more step. Lenders differ in how much Airbnb income they will count, and some count only part of it, so ask your broker early which approach your lender takes. It can change the loan you are offered more than a rate rise does.
What It Means For First Home Buyers
First home buyers are squeezed from both sides. Prices are easing, which helps, but each rate rise also lowers the amount a lender will approve. Cotality says the improvement in purchasing affordability has been modest compared with the earlier rise in home values, and the deposit is still the biggest hurdle for many.
The practical upside is time. With fewer competing buyers and longer selling periods, first home buyers can inspect more homes, compare more sales and avoid the pressure of a fast market. Ask a broker to refresh your pre-approval at today's rates, and treat any price guide as a starting point, not a ceiling.
What It Means If You Already Own An Airbnb
If you already own a short-term rental, a fall in the value index does not change your income this summer. Guests are paying for the stay, not for the market value of the property. The two things to watch are your loan costs and your revenue.
Your rateCheck what your lender has passed on since 29 September and whether a refinance or fixed portion makes sense for you.
Your summer pricingReview December and January rates, minimum stays and gap nights now, while there is still time for bookings to fill.
Your channelsListing on more than one platform spreads demand and reduces reliance on a single channel.
Your guest mixIf households are cutting costs, make sure your listing shows its value clearly.
A lower valuation can matter if you plan to refinance, sell or borrow against the property in the next year. If you do, get a realistic estimate of value before you commit to anything, and do not assume the bank will value it at the March price.
Short-Term Rental Rules Still Decide Where You Can Buy
A cheaper property is only a good short-term rental if it can legally run as one. Rules vary by state, council and building, and several are under review. These current examples show why this check comes before price.
Greater SydneyNSW limits non-hosted short-term rentals to 180 days a year in Greater Sydney. On 28 April 2026, City of Sydney councillors voted to seek advice on a time-limited ban for homes that are not someone's main residence.
Byron ShireNon-hosted short-term rentals are capped at 60 days a year across most of the shire, outside two mapped precincts in Byron Bay and Brunswick Heads.
South AustraliaThe state is consulting on a short-stay register, and the discussion paper suggests councils could set their own land-use rules and rates. Consultation closes at 5pm on 30 October 2026.
Strata buildingsApartment by-laws can restrict short-term letting whatever the council rules say. Read them before you offer.
Always confirm the current rules with the council, the state government and the strata manager for the exact property. Our guide to South Australia's short-stay register covers the SA proposal in detail.
Risks That Have Not Gone Away
A buyer's market still carries risk.
Further rate rises. The RBA has said it will raise rates further if needed. Test your numbers at least one or two rises higher.
Further price falls. Cotality expects a gradual drift lower. A purchase should not rely on prices recovering by a set date.
Softer spending. Weak confidence can affect travel budgets, and no market is immune.
Regulation. Councils and states keep reviewing short-term rental rules, as South Australia and the City of Sydney show.
Holding costs. Insurance, maintenance and strata fees add to interest. Budget for them separately.
None of these is a reason to stay out of the market. Each is a reason to buy with a margin of safety: a price that works with conservative income, finance with room to spare, and a property that still works as a normal long-term rental.
What To Do Next: A Two-Week Plan For Buyers
If this report has you thinking about buying, use the next two weeks, before the 3 November RBA decision and Cotality's November index, to get ready rather than to rush.
1Talk to a broker: Get an updated borrowing figure at today's rates and after one more 0.25-point rise.
2Ask about short-term income: Confirm how much Airbnb income your lender will count before you choose a property type.
3Shortlist two or three areas: Favour places with reasons to visit all year round.
4Check the rules: Confirm council, state and strata rules for each shortlisted area in writing.
5Pull real demand data: Look at booked nights and achieved rates for similar homes, not just asking prices.
6Build two budgets: One for short-term letting at conservative occupancy, one for a long-term lease as the fall-back.
7Set your walk-away price: Decide it before you inspect, based on the income numbers.
This article is general information only and does not take your circumstances into account. Figures marked illustrative are examples, not forecasts or promises of any return. Get advice from a licensed financial adviser, tax adviser, lawyer and credit professional before making lending or investment decisions.
Sources Used In This Article
Every figure was checked against its original source on 19 October 2026. Cotality revises earlier months each release, so check the latest report. We update this page when Cotality publishes its next index.
A softer market rewards buyers who arrive with the location research, rules check and income numbers already done.
Buy the right property
We find and assess short-term rental properties on demand, rules, strata and realistic income, then negotiate for you in a market that now favours prepared buyers. Our fees are set out on the buyers agent fees page.
Thinking of buying while the market is soft?Book a free 15-minute call. We will talk through your budget, the areas you are considering and what a short-term rental there could realistically earn.
FAQs About The Cotality Home Value Index And House Prices
Are house prices falling in Australia?
Yes. Cotality's national Home Value Index fell 1.1% in September 2026, the sixth monthly fall in a row. National values are 5.2% below the March 2026 peak and flat over the year. Every capital except Darwin fell in September, while regional values are still up 5.6% over the year.
What is the Cotality Home Value Index?
It is a monthly measure of Australian dwelling values published by Cotality, the company formerly known as CoreLogic Australia. It uses a hedonic method that adjusts for the mix of homes sold, so it tracks the value of the whole housing stock rather than just the homes that happened to sell that month.
What is the median house price in Australia?
Cotality's national median value for houses was $979,193 at the end of September 2026. Units were $727,818, and all dwellings together were $899,236. Sydney has the highest dwelling median at $1,198,596 and Darwin the lowest at $633,431. These are Cotality's value estimates, not median sale prices.
Which cities are falling the most?
In September, Brisbane fell 1.5%, Sydney 1.4% and Adelaide 1.3%, while Darwin rose 0.4%. Over the year, Sydney is down 7.0% and Melbourne 6.2%. Perth and Darwin are still up more than 10% over the year because of strong gains earlier in 2026.
Are regional property markets falling too?
Regional values fell 0.7% in September and are 2.2% below their May 2026 peak, but they are still up 5.6% over the year, compared with a 1.8% annual fall across the combined capitals. Regional WA, SA and Tasmania have recorded the strongest annual growth.
Why are house prices falling?
Cotality points to higher interest rates (the RBA has raised the cash rate four times in 2026), lower borrowing capacity, stretched affordability, high living costs, weak consumer confidence and less favourable negative gearing and capital gains tax settings for investors. A tight labour market and low new housing supply are limiting the risk of a sharper fall.
Will house prices keep falling?
Most forecasters expect more falls. CommBank's economists forecast about a 9% national fall from peak to trough, and an Australian Property Institute survey of 384 experts expects 8% to 11%, with a recovery from around September 2027. Cotality expects a gradual drift lower rather than a sharp correction.
Is now a good time to buy property?
A softer market gives prepared buyers more choice, more time for checks and more room to negotiate. It suits buyers whose property works at today's price, today's interest rate and a conservative income. Trying to time the exact bottom is risky, because borrowing power can fall further if rates rise again. Get licensed advice first.
Show 4 more questionsShow fewer questionsWhen is the next RBA interest rate decision?
The RBA Monetary Policy Board meets on 2 and 3 November 2026, with the decision announced on 3 November, and then on 7 and 8 December. The cash rate is currently 4.60%. Westpac's October outlook expects another rise in November. Check the RBA website for the latest decision.
When is the next Cotality Home Value Index released?
Cotality publishes its Home Value Index at the start of each month, covering the month just ended. The October 2026 release came out at 12:01am on Thursday 1 October and covered September. The next release, covering October, is due in early November, and we update this page when it comes out.
What is happening to rents and rental vacancy?
Cotality reports national rents up 5.5% over the year, but monthly growth slowed to 0.3% in September, the smallest rise since May 2025. The national vacancy rate rose to 2.0% from a record low of 1.5% in February 2026, and gross rental yields rose to 3.85%, the highest since August 2019.
How does a rate rise reduce borrowing power?
Lenders assess loans at the loan rate plus a 3 percentage point buffer, which APRA confirmed in May 2026. As an illustration, a 0.25-point rise from a 6.20% to a 6.45% loan rate cuts the maximum loan for the same monthly budget from $600,000 to about $587,000.
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