# Australian home values fall 1.1% in September, a sixth monthly drop

Cotality's Home Value Index puts national home values 5.2% below their March peak after a sixth straight monthly fall, with Darwin the only capital to rise.

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Australian home values fell 1.1% in September 2026, the sixth monthly fall in a row, according to the Home Value Index that the data firm Cotality published on Thursday 1 October. The index, which measures values as at 30 September, puts the national figure 5.2% below the peak it reached in March 2026.

The national median home value now stands at A$899,236. Over the September quarter values fell 3.7%, and over the full year they are exactly where they started: Cotality records an annual change of 0.0%. Twelve months of movement, in other words, have cancelled each other out, with the gains made up to the March peak handed back since.

<div class="keyfacts">
<div><b>1.1%</b><span>fall in national home values in September</span></div>
<div><b>5.2%</b><span>below the national peak of March 2026</span></div>
<div><b>A$899,236</b><span>national median home value</span></div>
</div>
<p class="src">Cotality Home Value Index, results as at 30 September 2026, published 1 October 2026.</p>

## Six monthly falls in a row

The March 2026 peak is the reference point for the whole release. Counting from April, September is the sixth month in which the national index has gone down, and most of the loss is recent: a 3.7% fall over three months means the September quarter accounts for most of the 5.2% lost since the peak.

The decline is broad. Tim Lawless, research director at Cotality, said in the release that 97% of capital city suburbs fell in value over the three months to September. That is close to every suburb the index tracks in the capitals, which makes this a different kind of downturn from one led by a single city or a single price bracket.

The capitals are falling faster than the rest of the country. Cotality's combined capitals index fell 1.2% in the month and 4.3% in the quarter, and sits 6.4% below its March 2026 peak. The combined regional index fell 0.7% in the month and 1.9% in the quarter, and is 2.2% below a peak reached later, in May 2026.

One number softens the picture for owners who have held for a year. Cotality's total return measure is still positive nationally at 3.5% over twelve months. For the combined capitals it is 1.5%, and for the combined regions 10.0%.

## How each capital moved

Darwin was the only capital where values rose in September, by 0.4%. Everywhere else the month was negative, with Sydney recording the steepest fall of the capitals listed below, at 1.4%, followed by Adelaide at 1.3% and Perth at 1.2%.

<figure class="fig"><figcaption><b>Home values by capital city, September 2026</b><span>Change in value and median, Cotality Home Value Index</span></figcaption>
<div class="scroll"><table class="tbl">
<thead><tr><th>Market</th><th>Month</th><th>Year</th><th>Median value</th></tr></thead>
<tbody>
<tr><td>Sydney</td><td>-1.4%</td><td>-7.0%</td><td>A$1,198,596</td></tr>
<tr><td>Melbourne</td><td>-0.7%</td><td>-6.2%</td><td>A$780,550</td></tr>
<tr><td>Adelaide</td><td>-1.3%</td><td>+6.5%</td><td>A$928,560</td></tr>
<tr><td>Perth</td><td>-1.2%</td><td>+10.1%</td><td>A$975,022</td></tr>
<tr><td>Hobart</td><td>-0.5%</td><td>+7.0%</td><td>A$741,496</td></tr>
<tr><td>Darwin</td><td class="yes">+0.4%</td><td>+11.9%</td><td>A$633,431</td></tr>
<tr><td>Canberra</td><td>-1.1%</td><td>-1.6%</td><td>A$861,744</td></tr>
<tr><td>Combined capitals</td><td>-1.2%</td><td>-1.8%</td><td>A$973,525</td></tr>
<tr><td>Combined regionals</td><td>-0.7%</td><td>+5.6%</td><td>A$758,931</td></tr>
<tr><td>National</td><td>-1.1%</td><td>0.0%</td><td>A$899,236</td></tr>
</tbody>
</table></div>
<p class="src">Cotality Home Value Index, as at 30 September 2026. Combined and national rows cover every capital and region in the index, including those not listed here.</p></figure>

The annual column splits the capitals into two groups. Sydney, Melbourne and Canberra are lower than a year ago. Adelaide, Perth, Hobart and Darwin are still higher, because their earlier gains were large enough to absorb the recent falls. Perth shows this most clearly: values there fell 4.7% in the September quarter, almost as much as Sydney's 4.9%, yet Perth remains 10.1% up on the year.

The distance from each city's peak tells the same story from another side. Sydney is 8.6% below its February 2026 peak, the largest gap among these capitals. Perth is 6.0% below its April 2026 peak and Adelaide 2.9% below its peak of May 2026. Darwin, after its small rise, is only 0.2% under the high it set in July 2026.

Melbourne, Hobart and Canberra are measured against much older records. Melbourne is 7.5% below its record peak of March 2022 and 7.2% below a more recent cyclical high in November 2025, having fallen 3.4% in the quarter. Canberra is 6.2% below its May 2022 peak after a quarterly fall of 3.2%. Hobart, down 1.2% in the quarter, is 2.0% below a peak that also dates from March 2022.

<div class="callout"><span class="mono">Reading the index</span><h4>A fall from peak is not measured from the same month in every city</h4>
<p>Each market is compared with its own high point. The national peak was March 2026, Sydney's was a month earlier, and Melbourne's record dates from March 2022. Two cities with a similar gap may have taken very different times to open it.</p>
</div>

## Regional markets hold up better

Outside the capitals the falls are smaller, and three regional markets moved very little at all. Cotality's figures show regional Western Australia up 0.1% in September, and regional South Australia and regional Tasmania each down 0.1%. Regional Victoria fell 0.3% and regional New South Wales 0.7%.

Over the quarter, regional South Australia rose 1.7% and regional Tasmania 0.1%, while regional Western Australia fell 1.0%, regional Victoria 1.3% and regional New South Wales 2.2%. All five are higher than a year earlier: regional Western Australia by 14.1%, regional Tasmania by 11.6%, regional South Australia by 10.7%, regional Victoria by 3.6% and regional New South Wales by 3.4%.

Lower entry prices are part of the regional picture. The median value in regional South Australia is A$564,017, in regional Tasmania A$622,460 and in regional Victoria A$634,360, against A$715,643 in regional Western Australia and A$824,912 in regional New South Wales. Gross rental yields in these regions run from 4.2% in regional New South Wales to 5.2% in regional Western Australia, above the 3.7% recorded for the combined capitals.

## Fewer sales, more homes for sale

Values are falling in a market where far fewer homes are changing hands. Cotality counts national sales over the past three months at 19.1% below the same period a year earlier and 13.3% below the five-year average. Sydney, down 26.5%, and Perth, down 24.2%, are among the capitals with the largest annual falls in sales.

Vendors have pulled back too, but less than buyers. New listings across the combined capitals are 9.2% lower than a year ago, while the total number of homes advertised for sale is 23.1% higher. Lawless explains the apparent contradiction in the release: stock has built up because sales slowed faster than the flow of new listings fell, so homes that would once have sold stay on the market.

That shows in the time a sale takes.

<figure class="fig"><figcaption><b>Capital city homes are taking longer to sell</b><span>Median days on market, combined capitals</span></figcaption>
<div class="scroll"><svg viewBox="0 0 680 104" role="img" aria-label="Bar chart: the median time to sell a home in the capitals was 23 days a year earlier and 39 days in September 2026.">
<text class="lb" x="176" y="33" text-anchor="end">A year earlier</text><rect class="bar" x="190" y="14" width="236" height="28" rx="4"/><text class="lb" x="436" y="33">23 days</text>
<text class="lb" x="176" y="79" text-anchor="end">September 2026</text><rect class="bar" x="190" y="60" width="400" height="28" rx="4"/><text class="lb" x="600" y="79">39 days</text>
</svg></div>
<p class="src">Cotality Home Value Index release, 1 October 2026. Median days to sell, combined capital cities.</p></figure>

For a vendor, the extra sixteen days mean a longer campaign and more competing homes on display at the same time. For a buyer, they mean more to choose from and more time to decide. Lawless's reading in the release is that many buyers lack either the confidence or the financial capacity to act, and that borrowers are far more sensitive to interest rates than they were about fifteen years ago.

## What a rate rise does to a buyer's budget

The index landed two days after a rate decision. On Tuesday 29 September the Reserve Bank of Australia raised the cash rate by 25 basis points to 4.60%, according to the Commonwealth Bank's newsroom report of the decision, dated 30 September. It was the fourth increase of 2026, taking the year's rises to 100 basis points, and the decision was unanimous.

The same report notes that the Reserve Bank itself pointed to housing: prices had fallen in most capital cities and new housing loans had declined noticeably. The Board also left open the possibility of raising the cash rate further if needed.

The ABC, in its report on the index on 1 October, put those rises in household terms. An average wage earner on A$109,000 can afford a property of about A$500,000, it reported, while average prices are around A$900,000. That earner's borrowing capacity has shrunk by about A$45,000 since January, after the four rate rises. A buyer who can borrow less can bid less, and that is the channel through which each increase in the cash rate reaches the prices in the index.

## Rents, vacancies and yields

The rental section of the same release shows the pressure on tenants easing a little. Cotality puts the national vacancy rate at 2.0% in September 2026, up from a record low of 1.5% in February 2026. The ABC noted that 2.0% is the highest national rate since January 2025. It is still well under the 3.3% that Cotality gives as the average for the decade before the pandemic.

Vacancy varies widely by city. Hobart has the most room, at 3.0%, followed by Sydney at 2.3% and Perth at 2.1%. Adelaide, at 1.4%, is the tightest of the capitals Cotality lists.

Rents are still rising, though slowly: 0.3% in the month on a seasonally adjusted basis and 5.5% over the year. With rents up and values down, the gross rental yield has moved in investors' favour. The national figure is 3.85%, which Cotality says is the highest since August 2019. Among the capitals, yields run from 3.4% in Sydney and 3.6% in Adelaide to 4.4% in Hobart and Canberra and 6.5% in Darwin, with Perth at 4.0% and Melbourne at 4.1%.

## What forecasters expect next

Cotality's own outlook is for values to keep drifting lower rather than to fall sharply. The release lists what is weighing on the market: the September rate rise, the possibility of another in November, weak confidence, stretched affordability and changes to the tax treatment of investors. Against that, it says a labour market with little slack and a limited supply of new homes should limit how far values fall.

Lawless went further in comments reported by the ABC. He expects values to keep falling into 2027 and regards a peak-to-trough decline of 10% to 15% as a reasonable estimate. With the national index already 5.2% down, that view implies the fall is roughly a third to a half complete.

Shane Oliver, chief economist at AMP, told the ABC that this is already shaping up as the biggest downturn in property prices of the past 40 years. The worst falls of the past few years, he said, were about 8% from top to bottom. His worst case is a fall of up to 20%, which he ties to a prolonged war involving Iran, oil at $150 a barrel and job losses. Oliver added that a fall of more than 15% would raise the risk of recession, and that a 20% fall would cut consumer spending by about 2%. These are estimates from named economists, not outcomes.

On rates, the two views reported so far point the same way with different emphasis. Oliver expects the Reserve Bank to hold in November but sees a high risk of one more increase. Commonwealth Bank economists, in the bank's newsroom report, see possible cuts in August and November 2027. The November decision is the next fixed point for a market in which nearly every capital city suburb has just lost value.