Australian housing market records third straight monthly decline as rate hikes and tax reforms bite

Australia's National Home Value Index fell 0.4% in June 2026, the largest monthly drop since December 2022 and the third consecutive decline. Over the June quarter the index slipped 1.3% across capital cities, with Sydney down 3.2% and Melbourne 2.6%. The downturn is driven by a 75‑basis‑point rise in interest rates, sharply reduced borrowing capacity, pessimistic consumer sentiment and upcoming budget changes to negative‑gearing and capital‑gains‑tax that are expected to curb investor demand.

The rental market offers little relief: vacancy sits at 1.6% nationally while rents are rising 5.9% year‑on‑year. In Perth, dwelling values still grew 0.7% in June and 2% for the quarter, the strongest quarterly performance among capitals, but the pace has slowed from earlier months. Perth’s vacancy is 1.3% and rents are climbing 7.8% annually, indicating that demand pressures remain even as price growth eases.