Australia's national Home Value Index fell −0.9% in August — the fifth consecutive monthly decline, and national values now sit 3.6% below the March peak. Last month five of eight capitals were falling. This month it's seven of eight, and the spread went deeper than the city level: 93% of capital-city suburbs recorded a fall over winter, up from 45.8% in autumn.
The big picture in two minutes
Keep it in perspective: monthly momentum is negative while annual growth is still positive off a high base. And put that −0.9% in real money — on a typical $913k home that's about $8,200 off in a single month. Real, but this is a market unwinding, not collapsing.
- National home value growth: −0.9% (fifth consecutive monthly fall)
- Annual change: +2.7% (down from +5.3% last month)
- Below the March peak: −3.6%
- Combined capitals: −1.1%
- Combined regionals: −0.4%
Sellers aren't rushing to sell and buyers aren't rushing to buy. Stock sits longer, some vendors simply pull the listing, auction clearance rates are under 50% and discounting has widened. For a prepared buyer that's leverage. For a stretched one it's a warning — good buying conditions are not the same thing as being ready to buy.
Capital city performance — August 2026
How the eight capital markets stacked up over the past month and year (median values rounded):
- Darwin: +0.6% monthly · +14.6% annual · median $647,259 · +$4k this month
- Hobart: −0.2% · +8.1% · $752,397 · −$2k
- Adelaide: −0.8% · +8.6% · $937,207 · −$8k
- Perth: −0.8% · +15.6% · $999,987 · −$8k
- Brisbane: −1.0% · +10.8% · $1,080,142 · −$11k
- Melbourne: −1.1% · −4.7% · $786,718 · −$9k
- Canberra: −1.1% · −0.4% · $864,998 · −$10k
- Sydney: −1.4% · −4.6% · $1,222,718 · −$17k
Biggest mover: Darwin (+0.6%) — the only capital still rising. Weakest performer: Sydney (−1.4%). Sydney is now 7.1% below its February peak — a sharper fall than the 2022–23 correction managed at the same point, when it was down 6.6%. Same country, opposite cycles: Perth is still up 15.6% over the year and Brisbane 10.8%, while Melbourne and Sydney are both down around 4.7%.
Annual numbers are the rear-view mirror. The monthly number is what's coming your way — and on that measure seven of eight capitals are going backwards.
The breakdown — top vs bottom quartile
We split each city into three price bands — the cheapest quarter of homes, the middle half, and the priciest quarter — and track them separately, because a city's one headline number hides what's really going on underneath. Quarterly change in the stratified hedonic dwelling index, three months to July 2026 (Cotality). Note: the capital-city table above is August data; this quartile split is the three months to July — Cotality's August pack is still pending, so the timelines don't line up exactly.
- Sydney: lowest 25% −1.4% · middle 50% −3.4% · top 25% −5.2% · spread 3.8%
- Melbourne: −1.2% · −2.8% · −4.6% · spread 3.4%
- Brisbane: +0.5% · −0.6% · −1.2% · spread 1.7%
- Adelaide: +0.4% · −0.1% · +0.1% · spread 0.3%
- Perth: +0.5% · −0.3% · −0.8% · spread 1.3%
- Hobart: +2.6% · +1.9% · +0.2% · spread 2.4%
- Darwin: +4.0% · +2.0% · +2.2% · spread 1.8%
- Canberra: −1.6% · −1.7% · −2.7% · spread 1.1%
This is the single most useful table in the report. The prestige end is wearing the correction — Sydney's top quarter is down 5.2% and Melbourne's 4.6% — while the cheapest quarter of Brisbane, Adelaide and Perth actually grew. That isn't random. Borrowing capacity has come down, which pushes buyers out of the multi-million-dollar end and into the price points below. The competition moved down the ladder; the prices followed.
The rental market — the best yields since 2019
Gross rental yields, annual rent growth and yield direction by capital city, sorted high-to-low yield:
- Darwin: 6.3% gross yield · house rent +12.0% · unit rent +10.5% · ↑
- Hobart: 4.4% · +8.5% · +6.0% · ↑
- Canberra: 4.3% · +4.0% · +1.4% · ↑
- Melbourne: 4.0% · +5.1% · +4.9% · →
- Perth: 3.9% · +8.1% · +7.4% · ↑
- Adelaide: 3.6% · +5.8% · +6.0% · ↑
- Brisbane: 3.4% · +6.7% · +5.6% · ↓
- Sydney: 3.3% · +5.3% · +3.9% · →
Highest yield: Darwin (6.3%) — up again this month. Lowest: Sydney (3.3%) — stable.
The national gross rental yield hit 3.79% — its best since September 2019. Read that carefully, because most people get it backwards: yields aren't climbing because rents are exploding. They're climbing because purchase prices are falling while rents hold. Lower price in, same rent — the yield improves by arithmetic. Be realistic though: at current investor loan rates most of these still cost you money to hold each week.
Budget bands — buying by price point
If your budget is under $500K…
Melbourne units: the best unit yields of any capital, sub-3% vacancies and a sales cycle rebuilding off a low base. Two caveats before you buy — Victoria has no land tax threshold, so you pay from the first property regardless of structure (budget roughly a thousand a year on a one or two-bedroom unit), and read the strata report properly: sinking fund, any past defect work, anything on the horizon.
Canberra units: cheap access to the capital, fast population growth and yields well above Canberra houses. Worth looking just over the border into Queanbeyan too.
Western Sydney units: St Marys, Mount Druitt and that vicinity. If you're from Sydney this is the one that makes people flinch — but you're not living there, you're investing there. It's a numbers game, and preconceived notions about an area are how you talk yourself out of a good deal.
Final take — from Nick
Last month I said the cycle had turned harder and wider than expected. This month it went wider again — 93% of capital-city suburbs fell over winter, Sydney is now falling faster than it did in 2022–23, and seven of eight capitals are going backwards.
Here's what changed, and it matters. Core inflation came in higher than expected, and a growing number of economists now think the RBA could raise the cash rate in September or November. Two months ago the debate was when the cuts arrive. That's a different game — higher rates would cut borrowing capacity again and push even more competition down into the price points that are already the busiest part of the market.
So who is this market actually for? If your finances are in order, your borrowing is there and you have genuine cash buffers, this is a good market to be negotiating in. Sellers are discounting, stock is sitting, and you will not get this much time and leverage when it recovers. If any one of those three is missing, it isn't your market yet — and good buying conditions are not a reason to jump in underprepared.
And if you already own: don't panic. Until you sell, you don't realise the loss. Hold the properties, let the storm pass, and remember no one times the bottom without a bit of luck. The one question worth asking isn't which strategy is fashionable — it's what do you need this property to do, and by when? Everything else follows from that.
Ready to talk?
If September's data has you rethinking your next move, book a Clarity Call. Twenty minutes on the phone with Akira — no pitch, no obligation. We'll map your next deal against the data above and tell you straight whether it stacks up.