Australian home prices tumble in June amid tax and rate pressures

National residential property values fell 0.4% in June 2026, the sharpest monthly decline since December 2022, according to Cotality. Sydney’s median price dropped 1.2% and Melbourne’s fell 1.3%, while Brisbane and Perth recorded modest gains. The slide follows three Reserve Bank interest‑rate hikes and the federal budget’s changes to negative‑gearing and capital‑gains‑tax rules, which analysts say have curbed investor demand and heightened affordability concerns.

Auction clearance rates in capital cities slipped below 50%, and first‑home buyers using the 5 % Deposit Guarantee risk negative equity if prices continue falling. Tim Lawless of Cotality warned the market could be entering a deeper correction, though he stopped short of calling it the end of a “super‑cycle”. The Treasury’s modelling had projected only a 2% slowdown in price growth, but recent data show a faster cooling trend.

The housing sector, which accounts for about 58% of Australian household wealth, could see a $600 billion erosion in asset values if dwelling prices fell 5%. Policymakers and industry groups are debating whether the tax changes have unintentionally amplified the downturn.