Australia’s housing downturn has reached markets that had previously outperformed, shifting the focus from Sydney and Melbourne to Adelaide, Brisbane and Perth. National dwelling values fell for a seventh consecutive month in November, and the latest figures suggest buyers’ reduced borrowing capacity is now weighing on a broader range of cities.
Realestate.com.au’s November Home Price Index puts the national median dwelling value at $871,000, down 0.3 per cent for the month and 1.9 per cent over the year. The measure is now 4.3 per cent below its peak. Across the capital cities, values also slipped 0.3 per cent in November; the annual decline there was steeper, at 3.7 per cent.
Adelaide and Brisbane take the sharpest monthly falls
Adelaide recorded the largest monthly decline among the capitals for the second month in a row. Its median dwelling value fell 0.6 per cent to $907,000. Brisbane was next, down 0.4 per cent to $1.014 million.
House values show a similar split between declining markets and a city holding its ground. Adelaide and Sydney both recorded monthly falls of 0.6 per cent, leaving their median house values at $981,000 and $1.508 million respectively. Hobart was the exception: house values remained at $788,000 while every other capital city posted a decline.
Hobart also held steady across all dwellings, with its median at $734,000 for a second consecutive month. That steadiness stands out against the broader capital city measure, but it doesn’t change the national direction: most metropolitan markets are still adjusting.
Unit performance was mixed. Brisbane had the largest monthly fall, with values down 0.3 per cent to $810,000. Canberra moved the other way, recording the strongest unit value growth among the capitals: 0.3 per cent, taking its median to $590,000.
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Home values are dropping around the nation. Pic: istock
The downturn has widened
Realestate.com.au senior economist Eleanor Creagh says the geography of the decline has changed. The first phase was concentrated mainly in Sydney and Melbourne; the sharper recent falls are emerging in Brisbane, Adelaide and Perth, cities that had been among the country’s strongest performers.
Those markets benefited for years from strong demand and relative affordability. After substantial price growth, however, that affordability advantage has narrowed. Higher borrowing costs and more expensive homes have left buyers with less room to absorb further increases, in Creagh’s view. The reversal in these cities points to a downturn that has broadened beyond its initial centres.
Creagh warned that another Reserve Bank of Australia rate rise, expected that week, could add to downward pressure and weaken buyer confidence. “That will certainly reinforce the downward pressure already weighing on home prices around the country,” she said. She added that further price falls were likely in the coming months, particularly where affordability had deteriorated most sharply.
The pressure is not evenly distributed by property type. Creagh says units and other relatively affordable options have generally held up better than houses, though results vary between cities. With borrowing capacities significantly reduced after four interest rate rises that year, some buyers are reconsidering their budgets and making trade-offs on location or dwelling type. That can broaden the pool of potential buyers for lower-priced homes.
Realestate.com.au senior economist Eleanor Creagh
Regional results offer a more varied picture
Outside the capitals, dwelling values fell 0.2 per cent in regional New South Wales, Queensland and Tasmania. Regional Victoria, South Australia and Western Australia were unchanged. For houses, the steepest declines were in regional NSW, Queensland and Tasmania, while regional Western Australia held steady.
Regional unit values were firmer in parts of the country. Victoria led with a 0.5 per cent monthly rise, just ahead of Tasmania at 0.4 per cent. New South Wales, Western Australia and the Northern Territory each recorded a 0.1 per cent decline. Queensland and South Australia were unchanged.
The pattern supports Creagh’s assessment that more affordable regions and property types are better placed to withstand the current squeeze on purchasing capacity. It also shows why national averages need careful reading: the month’s results range from declines across several regional markets to modest growth in regional units.
Prices and housing supply are moving in different directions
Ray White Group chief economist Nerida Conisbee points to a tension between falling established home prices and the cost of adding new housing. Higher interest rates are pushing established values lower, while the Budget has further weakened the supply of rental properties, she said.
Conisbee’s concern is that lower resale prices can make new projects harder to justify. If fewer developments proceed, fewer homes are built, adding pressure to an existing shortage. She cautions that a shortage doesn’t prevent prices from falling when higher rates reduce buyers’ borrowing capacity. At the same time, fewer homes being added to the market could make a prolonged downturn harder to sustain.
Her account of the post-Budget market combines several pressures: established values are declining, rents continue to rise, new housing is becoming more expensive, and approvals remain below the level Australia needs. Conisbee said weaker established prices could discourage development while retreating investor demand leaves the country with fewer rental homes and fewer new builds.
Ray White Group chief economist Nerida Conisbee
For market participants, the November reading is notable less for the national monthly fall alone than for where the pressure is showing up. Adelaide led the capital declines, Brisbane also slipped, and previously strong markets have joined the correction. Hobart’s stability and the firmer results for some unit markets offer useful counterpoints, while regional outcomes remain uneven. The next rate decision and its effect on buyer confidence will help shape whether this broader weakness deepens.
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