The Australian property market has reached a turning point. National home values have stalled after a strong 2025, and the country’s two biggest capital cities — Sydney and Melbourne — are now leading a gentle decline. For anyone planning to buy, refinance or invest this year, the shift changes what your budget looks like and where the opportunities sit.
What happened
Recent industry reporting shows national home prices have recorded their first monthly fall of 2026, with growth losing momentum across most of the country. Sydney and Melbourne dwelling values have slipped back from their late-2025 peaks, weighed down by three Reserve Bank cash rate rises that lifted the official rate to 4.35% in May.
It isn’t a uniform downturn. Brisbane, Adelaide and Perth have kept rising, with Perth among the strongest performers over the past year. Auction clearance rates have softened in the cooling capitals, and buyer demand has eased as higher rates trim how much people can borrow. Price growth has also concentrated in lower-priced homes, where competition for more affordable stock remains firm.
What this means for you
For buyers in Sydney and Melbourne, a cooler property market can mean less competition at open homes and a little more room to negotiate. The trade-off sits on the borrowing side: higher rates have reduced borrowing capacity, so the amount a lender will approve today may be lower than it was a year ago. Knowing your real, current borrowing limit — not last year’s — is the first step.
For existing owners, the picture is steadier. Strong equity positions and a resilient job market are helping to cushion price movements, so most home owners remain well ahead of where they bought. If you’re considering using equity or reviewing your loan, current conditions are worth a closer look, subject to your circumstances and eligibility.
Every situation is different. Talk to a Finance Hub broker to map the current market to your own numbers — call 0430 11 11 88 or visit finhub.net.au.
Source: The Adviser, 5 June 2026.
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