Have property prices already peaked, and is now the right time to buy? It is the question I have been asked most in May, and the honest answer is layered. Growth is slowing across every capital city, but the picture sitting underneath the headline number is not the same in any two markets.
National home values rose just 0.3% in April — the slowest pace since January 2025. Sydney and Melbourne both fell 0.6%. Perth went the other way, up 2.1%. Consumer confidence is at one of its lowest levels on record since 1973.
If you are trying to decide whether to buy now, sit out, or accelerate a purchase before the Budget rules kick in, here is what the data actually says.
Price Growth Is Slowing Everywhere
According to Cotality, every capital city across Australia recorded a slower pace of growth in April. The national home value index rose 0.3% over the month, marking the slowest monthly increase in more than a year.
The drivers are familiar: affordability and serviceability constraints continue to weigh on demand, with three RBA rate rises this year compounding the effect. The May Budget then layered in a structural change for investors, with negative gearing limited to new builds from 1 July 2027 (existing properties grandfathered — covered fully in the May 2026 Newsletter).
The Market Is Fragmented, Not Uniform
What looks like a single “slowdown” on the front page is really several markets moving in opposite directions:
- Sydney and Melbourne — both off 0.6% in April. Sydney is now sitting about 1% below its November peak; Melbourne has pulled back slightly more.
- Perth — up 2.1% in April, still leading the country.
- Brisbane, Adelaide and Darwin — up, but at a more measured pace than earlier in the year.
- Regional Australia — +4.2% over the first four months of 2026 vs +1.8% across the combined capitals. April growth eased to +0.9%, the slowest monthly print in nine months.
If you are weighing up an interstate purchase to access a stronger growth market, the playbook in 3 tips to navigate the risks and rewards of interstate investing is the right starting point.
Buyer Demand Is Softening
Property sales across the capital cities are running below this time last year and below the five-year average. Listings have started to rise in Sydney and Melbourne, where advertised stock now sits above average levels — meaning buyers have slightly more choice than they have had in months. Mid-sized capitals are different: stock there remains relatively tight.
Auction clearance rates have been trending lower since earlier in the year, consistent with buyers approaching decisions more cautiously as they read the rate cycle and the Budget rules.
The Lower End Is Outperforming The Top
Across the capital cities, lower-priced properties have been recording stronger growth than the upper end. The Sydney split is the clearest: lower-tier house values are up 2.9% over the past year, while the upper end is down 3.3%. Borrowing capacity constraints and first-home-buyer support schemes are doing most of the work here.
For first home buyers in particular, that means the affordability picture is improving in the segment you are most likely to be shopping in. The structural support — including the continuing 5% deposit Home Guarantee Scheme — is well covered in why many first home buyers choose to work with a mortgage broker.
What Forecasters Are Now Saying
Most forecasters point to continued, but modest, growth through 2026. Earlier in the year, KPMG forecast houses up 7.7% and units up 7.1%. More recent revisions sit closer to 2-3% capital city growth for the full year, reflecting global and domestic uncertainty.
The stronger conditions of 2025 are behind us for now. Higher rates, reduced investor activity in established properties, and cautious consumers all point to a more measured market.
The housing market has been losing momentum since late last year, as affordability and serviceability constraints weigh on demand. Now, with the added pressure of higher interest rates, sentiment has dropped sharply, and rising inflation is likely to push borrowing costs higher still.
Tim Lawless, Cotality Research DirectorSo, Is Now A Good Time To Buy?
The right answer depends on you, not on the market. Three filters I run with clients in May 2026:
- Borrowing capacity — at 4.35% cash rate, your number today is genuinely different to what it was last year. Get the current number before you fall in love with a property.
- Timing relative to your sell — if you are upgrading, the gap between buying and selling matters more than the absolute price. A bridging conversation is worth having early.
- Five-year view — if you are buying a home to live in for five-plus years, short-term peak-or-trough timing matters far less than people think. The right property at the right structure wins.
If you would like a clear view of your borrowing capacity and what your move looks like against the current market, book a strategy session below.
