National property values fell 0.7 per cent in July, according to property data firm Cotality, marking the largest single monthly decline since December 2022 as rising interest rates and mounting housing supply reshape the Australian real estate market. The downturn has moved beyond Sydney and Melbourne to affect previously resilient capitals like Brisbane and Adelaide.
National Property Prices Fall as Brisbane and Adelaide Turn
The July figures from Cotality show property prices in Brisbane fell 0.6 per cent, while Adelaide values dropped 0.2 per cent. According to Cotality, both cities recorded their second consecutive month of price declines after data revisions for June. Cotality’s head of research Gerard Burg described the rapid change in Brisbane conditions as the most surprising trend in recent months, noting that available housing supply in the city shifted from roughly 25 per cent below the five-year average in February to about 6 per cent above average.
Other capitals showed mixed results. Perth recorded a modest 0.1 per cent increase following a revised 0.5 per cent contraction in June, while Darwin values rose by 0.8 per cent. Melbourne real estate agent Shahid Khan noted that while borrowing capacity has created buyer hesitancy, first home buyers are still actively bidding in a market with limited buyers.
Interest Rates and Economic Pressure Drive Market Correction
Independent economist and former NAB chief economist Alan Oster attributed the broader market weakness directly to higher interest rates. According to Mr Oster, uncertainty regarding potential further rate hikes by the Reserve Bank of Australia, combined with debates over negative gearing policies, has left investors and owner-occupiers increasingly cautious.
Mr Oster warned that a weakening economy could push the unemployment rate well above the current 4.4 per cent level, potentially triggering a property market correction with price falls of 10 to 15 per cent from recent peaks. However, Mr Burg argued that low unemployment, ongoing population growth, and persistent construction challenges would likely prevent a severe crash, pointing toward a prolonged but moderate national downturn in values.
Frequently Asked Questions
Why are Australian property prices falling?
According to property data firm Cotality and independent economist Alan Oster, national property values are falling primarily due to higher interest rates, which have reduced buyer borrowing capacity, alongside rising housing supply in markets like Brisbane.
How much did property prices drop in July?
National property prices fell by 0.7 per cent in July, which Cotality reports is the largest single monthly decline in value since December 2022.
Are all Australian capital cities experiencing price drops?
No. While Sydney, Melbourne, Brisbane, and Adelaide have seen values decline, Perth recorded a 0.1 per cent increase in July and Darwin prices rose by 0.8 per cent.
Did you know? Available housing stock in Brisbane shifted from 25 per cent below its five-year average in February to roughly 6 per cent above average, giving buyers significantly more choice in the market, according to Cotality data.
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