Australia's national Home Value Index fell −1.1% in September — the sixth consecutive monthly decline. The national median is now $899,236, down from $912,885, and the market sits 5.2% below the March peak. Put plainly: a full year of capital growth has been wiped out in six months.
The big picture in two minutes
The headline number hides a split. The capitals are carrying this correction; the regions are not.
- National home values: −1.1% in September (sixth consecutive fall)
- National median: $899,236, down from $912,885
- Below the March peak: −5.2%
- Combined capitals, annual: −1.8%
- Combined regionals, annual: +5.6%
- August CPI: 4.0% — homes are about 4% cheaper in real terms than a year ago
Brisbane took the sharpest drop this month at −1.5% — a market that has been outstanding for years. Meanwhile the regions are still up 5.6% over the year. This is not one market going down. It is the capitals unwinding while everything outside them holds.
Rate watch — 4.60%, and what it actually costs you
On 29 September the RBA lifted the cash rate to 4.60%. That is the fourth hike this year and the highest cash rate of the post-COVID era.
- 4.60% — cash rate, lifted 29 September
- 4th — hike this calendar year
- +$390 — roughly, per month, on a $600,000 loan
- −8% — borrowing power, and more again if you are interest-only
Markets are pricing roughly a one-in-four chance of another move in November, and Westpac expects one. If it lands, the cash rate goes to about 4.85%.
Borrowing capacity is the engine of this whole thing. Every hike takes buyers out of the expensive end and pushes competition down into the price points below. That is why the top quarter of the market is falling hardest — not sentiment, arithmetic.
Capital city performance — September 2026
How the eight capitals stacked up over the month and the year:
- Darwin: +0.4% monthly · +11.9% annual · median $633,431 · +$3k this month
- Hobart: −0.5% · +7.0% · $741,496 · −$4k
- Melbourne: −0.7% · −6.2% · $780,550 · −$6k
- Canberra: −1.1% · −1.6% · $861,744 · −$10k
- Perth: −1.2% · +10.1% · $975,022 · −$12k
- Adelaide: −1.3% · +6.5% · $928,560 · −$12k
- Sydney: −1.4% · −7.0% · $1,198,596 · −$17k
- Brisbane: −1.5% · +5.9% · $1,048,880 · −$16k
Only one still rising: Darwin, and it is the best performer in the country at +11.9% over the year. Sharpest fall: Brisbane at −1.5% — a market that has been a standout for years. Over the past four or five months we are talking $30,000 to $50,000 off the median in these capitals. Significant, but in our view this is still a correction, not a crash. Nobody is seeing bargain-basement prices.
The breakdown — by price band
We split each city into the cheapest quarter, the middle half and the priciest quarter, because one headline number hides what is actually happening underneath. Three months to August 2026, Cotality housing chart pack. Note: the capital-city table above is September data; the chart pack runs a month behind, so the timelines do not line up exactly.
- Sydney: lowest 25% −2.1% · middle 50% −4.2% · top 25% −5.7% · spread 3.6%
- Melbourne: −1.3% · −3.3% · −5.3% · spread 4.0%
- Brisbane: −2.0% · −2.9% · −2.8% · spread 0.8%
- Adelaide: −0.9% · −1.6% · −1.8% · spread 0.9%
- Perth: −3.0% · −3.4% · −2.9% · spread −0.1%
- Hobart: +1.2% · −0.2% · −1.0% · spread 2.2%
- Darwin: +3.1% · +0.7% · +0.3% · spread 2.8%
- Canberra: −2.0% · −2.3% · −3.7% · spread 1.7%
This is the most useful table in the report. In Melbourne the cheap end came back 1.3% while the top end came back 5.3%. In Sydney it is 2.1% against 5.7%. If you are buying at the lower end, that is roughly the discount you can expect to negotiate — not dollar-for-dollar in every deal, but it is the right mindset walking in. Agents advertise for the highest price because their commission is tied to it. You want the lowest. Right now you have the power, because there are nowhere near as many buyers as there were twelve months ago.
The rental market — falling prices, rising rents
Gross rental yields, annual rent growth and direction by capital, sorted high to low:
- Darwin: 6.5% gross yield · house rent +11.4% · unit rent +12.0% · ↑
- Hobart: 4.4% · +8.7% · +5.0% · →
- Canberra: 4.4% · +3.8% · +1.5% · ↑
- Melbourne: 4.1% · +4.9% · +4.8% · ↑
- Perth: 4.0% · +8.0% · +7.5% · ↑
- Adelaide: 3.6% · +6.3% · +6.1% · →
- Brisbane: 3.5% · +6.7% · +5.9% · ↑
- Sydney: 3.4% · +4.9% · +3.7% · ↑
Yields are improving everywhere, and it is worth being clear about why: prices are deteriorating while rents are not. Same rent, lower price in, the yield improves by arithmetic. Falling values and rising rents at the same time is an unusual combination — and it is the reason we are still buying. One caveat on Darwin's 6.5%: cyclone insurance on some property types will take one to two per cent straight back off that gross number.
How low can it go?
The honest answer is that nobody knows, and anyone who sounds certain is guessing confidently. Here is where the serious forecasts sit:
- Right now: −5.2% from the March peak
- Sydney: already −8.6% from its peak
- Cotality: a 10–15% fall is fair and reasonable
- AMP (Shane Oliver): up to 20% — which would be the biggest downturn in 40 years
Stock on market is up 23% even though new listings are down, which tells you properties are sitting rather than flooding in. If unemployment stays under 5% and new housing supply stays tight, we would expect a softer landing than even the 10–15% call. If unemployment pushes through 5% and inflation stays high on the back of the oil situation, more hikes follow and the harsher end of the range is live.
Where we are buying right now
If you have the borrowing capacity and genuine buffers, one market: Melbourne units. You are buying into a market that has lagged for a decade, and that is the whole point — Perth did nothing for years, Brisbane did nothing for years, Darwin did nothing for years. Look what happened next in each. Melbourne values are roughly where they were five years ago.
What we buy, specifically:
- Established stock — low-rise, low density
- Owner-occupier style, with a high share of land
- Boutique blocks, villas, townhouses
- Near genuine public transport — as fuel costs climb, that matters more every year
What we do not touch: towers, and big blocks loaded with maintenance-heavy common facilities. Yields on the stock we buy run 5–7% gross, before owners corporation fees and land tax. Always read the Section 32 and the owners corporation records for levies and cladding.
Darwin is the only capital still rising and has the best yields in the country. We are still not buying there. Over ten years Darwin is up 34% — that is the whole decade. The money going in is interstate investors chasing yield, not people moving there for jobs. Strong yield, weak growth engine.
The number to watch — and it isn't the cash rate
It is unemployment, currently 4.6% and the highest in the post-COVID era. Jobs are still being added — about 39,500 in August — so this is not job losses. But the number is creeping up, and low unemployment is what keeps a downturn orderly. If it keeps rising, people who don't want to sell become people who have to. That is the mechanism that turns a correction into something worse.
If you are buying — buy with conditions
- Finance, including the bank's valuation
- Building and pest, regardless of what you are buying
- Owners corporation records, levies and cladding
- Price off the last three months of actual sales, not asking prices
Auctions give you none of these. And before any of that, be honest about whether you are ready: a current pre-approval, room in the budget for another hike, a secure income, and six months of repayments in the bank. If that is not you yet, sitting this one out is a strategy, not a failure.
Final take — from Nick
Last month I flagged a possible rate rise. It is here, it is 4.60%, and another in November is reasonably likely. I carry a lot more debt than the average household, so I feel every one of these the same way you do.
But I am not panicked about it — I am interested. The ingredients are different to the GFC, different to the dot-com bubble, different to the Keating recession. Different ingredients make a different dish, and we are all about to get served over the next six to eighteen months.
Here is the part that matters. Falling prices and rising rents at the same time is rare, and it hands prepared buyers real leverage: time, conditions and a discount you can actually negotiate. If your cost of living is maxed out and you are not sure you can afford it, do not buy — build the buffer first. The last thing I want to hear is that you got a great price and then had to sell it because you could not hold it.
Run your numbers. If they work, this is a good time to be buying.
Ready to talk?
If October'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.