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About Kooky and Shaka →National Australia Bank has lowered its forecast for Australian home prices again. In the Housing Monitor it published on Wednesday 7 October 2026, the bank's economics team says it now expects dwelling prices across the eight capital cities to fall 8% over 2026, where its previous forecast was a fall of 6%.
The bank also puts a size and a date on the whole downturn. It expects prices to fall about 11% from their peak to their lowest point, and the full report attached to the release places that floor in the June quarter of 2027. Both are the bank's expectations, built on data to September. They describe what one forecaster thinks is likely, and the bank has already changed its mind more than once this year.
National Australia Bank, Housing Monitor, published 7 October 2026. Forecasts, not outcomes.
A forecast that keeps getting deeper
The October number is easier to read beside the ones that came before it. NAB publishes a Housing Monitor each month, and its own news pages show how the 2026 forecast for the eight capitals has travelled.
The edition of Tuesday 4 August cut the forecast to a fall of 5% over 2026, and said this replaced an earlier forecast of a 2% fall. In that edition the bank wrote that recent data had put the risk firmly on the downside of its earlier view, and that revisions to the price data had shown steeper declines than first reported, especially in Perth. The edition of Thursday 3 September kept the forecast at 5% and added that the bank saw downside risks if interest rates rose, which it expected. The October edition moves the figure to 8%, and the release gives the previous forecast as 6%.
Related readHow to read Dubai's official property data, from sales to rent indicesNational Australia Bank, Housing Monitor editions of 4 August, 3 September and 7 October 2026. The October release gives its previous forecast as 6%.
One detail in that sequence does not line up, and it is the bank's own. The September page states a 5% fall, while the October release describes the forecast it replaces as 6%. The published pages do not explain the step between the two figures. What is clear from all three editions is the direction: each change has been towards a larger fall, and the forecast for the year is now four times the size of the one the bank held before August.
Why the bank changed its number
The reason NAB gives is short. The full report says the forecasts were lowered because of the sharper slowdown across the mid-sized capitals, a group that includes Perth and Adelaide and that had held up better than Sydney and Melbourne earlier in the year.
The September price data the bank relies on, which come from the data firm Cotality, show what it means. Dwelling prices across the combined capitals fell 1.2% in September, the sixth monthly fall in a row, and stood 6.4% below their peak of March 2026. Sydney fell 1.4% in the month and Melbourne 0.7%, a slower pace for Melbourne than in the months before. The mid-sized capitals each fell between 1% and 1.5%, and unit prices fell 0.8%.
The comparison with the previous edition makes the point more sharply. In the Monitor of 3 September, on August data, NAB put Perth 3.2% below its recent peak and Adelaide 1.6% below. One month later the same measures read 6.0% and 2.9%. Perth's gap nearly doubled in a single month of data. Over the same month Sydney went from 7.1% to 8.6% below its peak and Melbourne from 6.5% to 7.2%, while the eight-capital index went from 4.6% to 6.4%.
Related readHDB resale flats in Singapore: index slips for a third quarter runningThat is also why the earlier city forecasts no longer hold. In August and September the bank expected falls of about 10% over the year in Sydney and Melbourne and of 2% to 4% in the mid-sized capitals. Perth's fall from its own peak, on the bank's September figures, is already larger than the top of that range, although a fall from a peak and a fall over a calendar year are not the same measure.
The published report does not set out the interest rate, unemployment or growth assumptions behind the new forecast, and it does not list the risks around it. Readers are given the conclusion and its main cause, not the model.
What the bank expects city by city
The full report, a document of the bank's Economics and Markets Research team, gives a peak-to-trough forecast for the larger capitals. Set beside how far each city had already fallen by September, it shows how much of the decline the bank believes is still to come.
| Market | Below peak, September 2026 | Forecast peak to trough | Gap between the two |
|---|---|---|---|
| Sydney | 8.6% | About 14% | About 5.4 points |
| Melbourne | 7.2% | About 11% | About 3.8 points |
| Perth | 6.0% | About 11% | About 5.0 points |
| Adelaide | 2.9% | 8.5% | 5.6 points |
| Eight capitals | 6.4% | About 11% | About 4.6 points |
National Australia Bank, Housing Monitor, 7 October 2026; price data from Cotality to September 2026. The gap is a simple subtraction made for this article, not a NAB figure. The eight-capital row includes capitals not listed here.
Sydney carries the largest forecast, at about 14%. Melbourne and Perth share the same figure of about 11%, although they arrive at it from different places: Melbourne has already done roughly two thirds of that distance, Perth a little over half. Adelaide's forecast is the smallest in the table at 8.5%, yet of the four cities in the table it is the one with the most still ahead of it on the bank's view, because prices there had fallen only 2.9% by September.
The report gives no forecast for Hobart, Canberra or Darwin, and no year-by-year table. For the eight capitals together, an 11% decline against 6.4% recorded so far means the bank thinks a little under three fifths of the fall had happened by the end of September.
Related readSingapore private home prices rise 1.4% in third-quarter flash estimateA peak-to-trough figure is a view of the whole cycle, not of one year
NAB's 8% covers the calendar year 2026. Its 11% runs from each market's peak to a low the bank places in the June quarter of 2027. Neither is a measured result, and the bank has revised its 2026 figure at least twice since the start of August.
What the same report says about sales, building and rents
The forecast sits on top of a monthly reading of the market, and several of its figures help explain the bank's caution.
Homes are taking longer to sell. NAB puts the median time on market at 41 days, the highest since late 2020. Its August edition gave 34 days and its September edition 38, so the measure has risen in each of the last three reports. Sales volumes have slowed and continued to fall, the bank says, without giving a figure in the October edition.
Lending has turned down as well. The value of new housing loan commitments fell 5.2% in the June quarter of 2026 compared with the quarter before. Investor commitments fell 10.2% and owner-occupier commitments 1.9%. The bank notes that only a small share of new lending is at high debt-to-income or high loan-to-valuation ratios, and that housing loan arrears are 1% of outstanding loans, though they have edged higher for low-documentation lending.
Building has not slowed in the same way. Approvals for detached houses continued to trend higher in August and were 18% higher over the year. Approvals for higher-density housing fell in August, in a series the bank calls volatile, and have been broadly steady over the past year in trend terms. Dwelling starts have risen since late 2023, led by apartments, and are still running ahead of completions. About 250,000 dwellings are under construction, which NAB puts at roughly 40% above the average for 2010 to 2019. The cost of building is rising too: material input costs rose 2.1% in the June quarter on pressure from raw materials, freight and fuel.
Related readHow to read Singapore's official home price indices and supply dataFor tenants and landlords, the report shows a small easing. The rental vacancy rate continues to edge higher, particularly in Western Australia. Growth in advertised rents has moderated to 5.0% on a six-month annualised basis, a slowing the bank says is led by Sydney.
How it compares with other forecasters
NAB is not alone in expecting a long decline. Broker Daily, a trade publication for mortgage brokers, reported on Friday 9 October that Commonwealth Bank is forecasting a 9% fall in house prices that would not end until well into 2027. It attributed the view to the bank's chief executive, Matt Comyn, speaking on ABC Radio, and reported that he expected the forecast to be reviewed around November. Comyn also gave a point of comparison, according to the same report: national house prices fell by just over 8% in 2022 and 2023.
The two banks' figures are close but are not measured the same way. NAB's 11% is for dwellings in the eight capitals from peak to trough. Commonwealth Bank's 9%, as Broker Daily reports it, is for house prices, and the report gives no further definition.
Cotality, whose index NAB uses, published its own September figures on 1 October. Its national Home Value Index fell 1.1% in the month and stood 5.2% below its March peak. Those are national figures that include regional markets, which may be why they are a little smaller than the 1.2% and 6.4% that NAB quotes for the combined capitals.
Rates, borrowing capacity and what comes next
The background to every one of these forecasts is the cost of borrowing. The Reserve Bank of Australia has raised the cash rate four times in 2026, and it stands at 4.60% after the increase of 29 September.
Related readUS condo values up 1% in four years as houses gain 6%, Inman findsBroker Daily's report collects what that has done to demand for home loans. Equifax recorded mortgage demand in August 14.1% lower than in August 2025, with demand from first home buyers down 20.1%. Cotality estimates that the four rate rises have cut borrowing capacity by almost A$90,000. A buyer who can borrow less can offer less, and that is the route by which a rate decision reaches a sale price.
The same report gives the latest count from the Australian Bureau of Statistics on building approvals: total dwelling approvals fell 6.1% to 16,953 in August, while private-sector house approvals rose 3.7% to 10,885 and were 18.4% higher than a year earlier. Fewer approvals in total, with houses still rising, matches the split NAB describes between detached and higher-density building.
For agents, vendors and buyers, the practical reading is limited but real. On NAB's view, prices in the capitals would still be falling through the first half of 2027. Among the four cities in the table above, the falls the bank's forecasts still imply are largest, in points, in Adelaide, Sydney and Perth. On Commonwealth Bank's view the decline also runs well into 2027. Neither bank presents its figure as certain, and NAB's record since August shows how quickly a forecast can be overtaken by one month of data.
Two dates are already marked. Commonwealth Bank's review of its forecast is expected around November, according to Broker Daily. NAB's Housing Monitor appears monthly, in the first week of the month for each of the last three editions, so its next reading of prices, and of its own forecast, should follow the October price data.
Kooky, from Shaka
Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
