Australian house prices have declined across several capital cities, with major banks forecasting further falls of 2% to 3% by the end of the year. However, after a decade of rapid price growth, these reductions are unlikely to significantly improve housing affordability.
Monthly data from Cotality reveals that the median dwelling price in Australia peaked at $944,000 in March before retreating to $937,000 by the end of June, a drop of 0.7%. Over the past ten years, the median home price has surged by more than $400,000, meaning prices have nearly doubled.
Price-to-Income Ratio Worsens
Another measure of housing affordability is the number of years of household disposable income required to purchase an average dwelling. In 2016, according to Guardian Australia columnist Greg Jericho, the average dwelling price equated to 13 years and four months of a typical household's disposable income. By March this year, that figure had risen to more than 17 years.
Even with a 10% drop from the March peak, the median dwelling would still cost more than 15 years of a household's disposable income. This underscores the persistent challenge of housing affordability despite recent price declines.
Market Outlook
Major banks are predicting price falls of 2% to 3% by the end of the year, which would represent a modest correction relative to the gains of the past decade. The data highlights that while prices are softening, they remain at historically elevated levels relative to incomes.
The headline of this article was amended on 8 July 2026. An earlier version said Australian house prices had more than doubled over the past decade; this should have said they have almost doubled.
