After years of relentless growth, Australia's property market is entering a new phase. The downturn is deepening, buyers are taking their time, and homes are no longer being snapped up in a single weekend. For anyone looking to buy, a slower market is worth understanding rather than fearing.
National dwelling values fell 0.4% in June, the largest monthly fall since December 2022, and auction clearance rates have slipped below 50% in Sydney and Melbourne. The state-by-state detail is further down.
Buyers are negotiating harder and walking away when the asking price does not line up with the market. The recent changes to negative gearing and capital gains tax have also prompted many investors to reassess their plans, which we unpack in what's driving the drop in auction clearance rates. If a purchase is on your radar over the coming months, understanding your borrowing power and getting pre-approval lined up early is a sensible starting point.
Interest Rate NewsRBA Holds At 4.35%
At its June meeting, the Reserve Bank of Australia left the cash rate on hold at 4.35%, following three consecutive rises so far this year.
Headline inflation is easing. Annual inflation dropped to 4% in the 12 months to May, largely on the back of a near 12% fall in fuel prices. Underlying inflation has proven more stubborn. The RBA's preferred trimmed mean measure rose to 3.6%, up from 3.4% in April, and remains above the 2 to 3% target band the RBA wants to see before it considers cutting.
Treasurer Jim Chalmers welcomed the lower headline figure, while making clear the government was not complacent about the risks that remain.
We know that there are still inflationary pressures in our economy. But these numbers today are much better than the market expected, much better than forecast, and that's obviously a very good thing.
Jim Chalmers, TreasurerThe RBA said its rate rises appeared to be having broadly the effect it expected, noting that housing demand had eased, reflecting both the wider economy and the recently proposed tax changes. The next cash rate decision lands on 11 August. Economists and major lenders are divided on what comes next, so we'll keep you posted through the rest of winter. If your repayments are starting to stretch, it can be worth reviewing how your loan is structured sooner rather than later.
Home Value MovementsThe Downturn Deepens
The latest figures show the downturn is deepening. National dwelling values fell 0.4% in June according to Cotality, the largest month-on-month fall since December 2022.
Sydney led the capitals lower, down 1.2%, with Melbourne down 1% and Canberra down 0.6%. Adelaide was flat, Brisbane posted modest gains, and Hobart and Perth rose 0.6% and 0.7% respectively. Over the June quarter the shift was clearer still: capital city values fell 1.3%, with Sydney leading the decline at 3.2%, Melbourne down 2.6% and the ACT down 1.3%.
Such low clearance rates indicate a mismatch between buyer and seller pricing expectations. Buyers now have more stock to choose from and less urgency in their decision-making.
Tim Lawless, Cotality Research DirectorRegional markets continue to outperform the capitals, rising 1.1% over the quarter and 0.3% in June. The cooling is showing up in auction results too, and it is worth understanding what sits behind it before you read too much into a single headline.
Home Value IndexState By State
| State | Auctions | Clearance | Private sale | Monthly change |
|---|---|---|---|---|
| VIC | 783 | 47% | 1,286 | -1.0% |
| NSW | 875 | 39% | 1,540 | -1.2% |
| ACT | 60 | 43% | 101 | -0.6% |
| QLD | 224 | 28% | 899 | 0.3% |
| WA | 19 | 21% | 514 | 0.7% |
| NT | 7 | 57% | 17 | 1.4% |
| TAS | 1 | 100% | 148 | 0.6% |
| SA | 135 | 50% | 276 | 0.0% |
Monthly home values figures as of 30 June 2026. Auction results, clearance rates and recent sales for the week ending 28 June 2026. The clearance rate is preliminary, current as of 11:30 AM AEST, 1 July 2026.
Closing OutReady To Buy?
Home loan pre-approval typically stays valid for around 90 days, so if you're considering a purchase in the coming months, it can be worth starting the conversation sooner rather than later. We can walk you through your borrowing capacity, explain how pre-approval works, and talk through the factors relevant to your circumstances.
If you're weighing up whether a broker is the right call, it is worth knowing that more than 8 in 10 borrowers now choose one. The strategy hub on things to ask a broker in 2026 is a useful read alongside this newsletter.
