Median house prices are now falling in four Australian capital cities, with Adelaide joining Melbourne, Sydney, and Canberra in recording a one-month decline in June, according to data from property analytics firm Cotality. Sydney values have dropped by $48,000 since the start of the year.
Sydney and Melbourne See Sharpest Monthly Declines Since 2022
Data released on Wednesday showed Sydney and Melbourne experienced their largest one-month value drops since August 2022, falling 1.2% and 1% respectively. Sydney median home prices have fallen $48,000 since January and are now just $3,000 above their level in June 2025. Melbourne’s median prices are $7,000 below where they stood in June 2025.
In Canberra, prices are $8,000 below January levels but still $25,000 higher than a year earlier. Adelaide home prices, which had risen for 15 consecutive months including a 15.4% annual increase, fell in the second half of June after a modest rise, according to Cotality’s daily data.
Interest Rate Hikes and Tax Reforms Weigh on Demand
Interest rates have increased three times since February, and the government’s tax reforms have reduced property investors’ borrowing capacity, dampening housing demand. The Reserve Bank board left interest rates on hold in June after being surprised by the rapid slowdown, as noted in the minutes of its meeting published on Tuesday.
More than half of homes taken to auction are not selling, with national clearance rates remaining below 50% since the end of May. Luke Banitsiotis, Ray White’s chief auctioneer for Victoria and Tasmania, said buyers are still attending auctions but many sellers are unwilling to lower their prices.
Buyers Wait for Discounts, Sellers Hold Firm
“You are still able to sell,” Banitsiotis said. “It’s probably just at a different price point than you were able to do two months ago.” He noted that homebuyers are waiting for the perfect opportunity or a significant discount. “There’s ones that are there and will move if it’s the right property, but … there’s others going, ‘well, if this gets worse, maybe we’ll get it for 5% cheaper than it is now,’” he added.
Banitsiotis reported that homes priced under $1 million are still selling quickly, but selling higher-priced properties has become a “hard slog.” Overall, home sales have slowed: according to Cotality, the total number of sales in capital cities in the three months to June was 16.2% lower than the same period last year.
Perth and Brisbane Also Show Signs of Stalling
Markets are also stalling in Perth, where prices rose nearly 24% over the past year but only 0.7% in June, and in Brisbane, which recorded a 17.4% annual median price rise but just 0.3% for June. Both cities also saw their estimated prices in May revised down by over $10,000 as more data revealed the depth of the slowdown.
Cotality did not predict a sharp price slump in its report, stating: “The most likely path from here is a further loss of momentum and a gradual drift lower in housing values, rather than a sharp national correction.”
