Australian Property Market Update

analysis of data and charts as of 27th July   2026, provided by SQM Research,  Cotality, and realestate.com.au.

Sydney just had its worst auction weekend since April 2020, and if you've been wondering when this slowdown would start showing some real teeth, that's your answer.

Australia’s property markets have clearly changed direction over the past couple of months, with Cotality's Home Value Index showing values have now fallen around -0.8% over the last month with Sydney and Melbourne down -1.3% and -2.2% respectively from where they sat late last year.

Brisbane, Adelaide and Perth have held up far better through this cycle, but even they are now showing early signs of their own corrections.

At the same time, the Reserve Bank faces a difficult decision when it meets again in August.

The cash rate remains at 4.35% after three increases earlier this year, and the RBA has made it clear that another rise remains possible if inflation fails to ease. Its task has been complicated by the latest employment figures, which showed the economy created 76,300 jobs in June, so everyone will be eagerly watching the CPI figures that come out later this week.

The big four banks are mostly tipping another hold through the rest of the year, while Westpac continues to forecast one more rate rise, with August seen as the most likely timing.

The rental market continues to provide a very different picture. National rents have increased 5.9% over the past year, rental listings remain well below last year’s levels, and vacancy rates are still extraordinarily tight in most capital cities.

This combination of softer property prices and rising rents is gradually improving rental yields, although higher financing and holding costs continue to squeeze many investors.

To my mind, this is exactly what a normal correction looks like after three rate rises and a stretch of policy uncertainty around the coming negative gearing changes.

It's a difficult market if you need to sell right now, but it isn't the kind of structural unwind that should concern long-term investors holding well-located, investment-grade property.

On the auction front this week... capital city clearance rates hold in the low 50% despite a lift in auction volumes

Auction volumes have increased modestly over the past two weeks, rising by 4.0% last week following a 4.8% lift two weeks ago to reach 1,421 events.

The preliminary clearance rate has remained in the low 50% range over the past three weeks, edging up to 52.4% last week. This week, Cotality also reports that:

• Sydney property prices declined -0.3% over the last week, also declined -1.2% over the last month, and are -1.3% lower than they were 12 months ago.

• Melbourne property prices declined -0.3% over the last week,  also declined -1% over the last month, are -2.2% lower compared to 12 months ago.

• Brisbane property prices declined -0.2% over the last week, also declined -0.4% over the last month and are 15.8% higher than they were 12 months ago.

Overall, Australian capital dwelling prices declined -0.8% over the last month and are now 4.8% higher than they were 12 months ago.