Australian housing market faces downturn as mid-sized cities lead price falls

Australia’s housing market is experiencing a distinct downturn, with national property values falling 5.2% in September from their March peak. While the correction was initially driven by major cities like Sydney and Melbourne, recent data suggests a shift in momentum toward mid-sized capital cities.

Brisbane, Perth, and Adelaide are recording sharp price falls, supported by a significant rise in new listings and an increase in the median days on market. This shift is attributed to a change in the supply-demand balance in these markets, which previously saw median values more than double over the last six years.

Economic factors driving the decline include the Reserve Bank of Australia’s interest rate hikes and federal government changes to negative gearing and capital gains taxes. Some analysts suggest that if the current trend continues, an overall reduction of 10-15% in house prices could be realized, representing a larger slide in values than any previous downturn in the last 20 years.