Property · June–August 2026

Sydney and Melbourne house prices falling as borrowing capacity shrinks

Developing story — facts still moving. Check Reuters or ABC News for the latest.

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Keep an eye on it

Directly affects mortgage holders, buyers and investors in Sydney and Melbourne. Three rate hikes have cut average single-income borrowing capacity by around $36,000; prices in Sydney and Melbourne are falling while Perth, Adelaide and Brisbane are still rising.

In a nutshell: Cotality’s national Home Value Index fell 0.4% in June — the largest monthly fall since December 2022 — with capital city values down 1.3% over the quarter. Sydney fell 3.2% and Melbourne 2.6% over the June quarter. Perth, Adelaide and Brisbane are still recording gains. Australia’s unemployment rate has risen to 4.5%, the highest since November 2021. Domain forecasts Sydney and Melbourne house prices will fall over the year to June 2027.

Spin Unspin

What they’re saying

The calculation is based on average incomes and standard serviceability buffers. It applies to new borrowers, not those already holding fixed rates; but it shapes the market buyers are entering.

The two-speed market is real but often buried in national average reporting. Buyers in growing cities face different conditions from those in Sydney and Melbourne.

Cotality and Domain figures are independently published and industry-standard. Forecasts are projections, not certainties; the RBA’s 11 August decision is a material variable.

Latest Property Price Forecasts. Australian Property Market Outlook 2026-2027: Navigating a Market Correction

RBA August 2026 Rate Decision: Hike or Hold? | IFG

Do I care?

Use your bank’s current serviceability calculator — three hikes have likely moved your limit since you last checked. Do this before Tuesday’s RBA decision.

If you are buying, selling or refinancing in Sydney or Melbourne, the next six months are worth watching carefully before committing.

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