Australian capital-city housing values recorded their steepest quarterly fall in Domain’s series in September as declines spread to all eight markets, shifting negotiating leverage toward buyers amid higher borrowing costs.
Domain’s September 2026 report put the combined median at A$1,226,566 after a 4.7% drop, the largest quarterly decline in its records. The median fell A$59,870 during the quarter. Every capital city registered a fall in house prices, a synchronized slide Domain said had occurred only once before in its data and not in the past 15 years.
Perth had the deepest decline at 7.4%, while Sydney’s 4.7% slide left its median at a two-year low. Brisbane fell 5.4%, and Melbourne’s median dropped 3.3%. Adelaide and Hobart each declined 3%, compared with 2.6% in Canberra and Darwin. Domain put Sydney’s median at A$1.66 million, Perth’s at A$1.115 million and Melbourne’s at A$1.014 million. The spread between the largest and smallest city declines was 4.8 percentage points.
Domain linked weaker sentiment and reduced borrowing capacity to higher interest rates, household cost-of-living pressures and changes to housing investment tax policy. Its release said investor activity was receding, while first-home buyers faced higher repayments and uncertainty.
Domain said bargaining conditions had tilted toward prospective purchasers. Sellers, meanwhile, were taking longer to find buyers and more often cutting prices, giving purchasers greater room in negotiations.
Unit prices also fell 3.5% across the capitals, according to Domain. Darwin was the only city where unit prices rose, even as its house prices fell 2.6%, showing that the two measures moved differently there.
Domain Chief Residential Economist Dr Nicola Powell said a recovery depends on stronger buyer confidence and greater purchasing power. Domain described the near-term outlook as subdued, with borrowing costs, affordability limits and policy uncertainty continuing to weigh on demand.
