Real Estate market cools, house prices

tipped to fall Australia wide

July 2026 Up to $122,000 could be wiped off the value of the typical Sydney house over the next year, while Melbourne's median house price could drop below $1 million, Domain forecasts. The real estate platform has published housing price forecasts for the next financial year and has tipped substantial falls for the Sydney and Melbourne markets, with prices in Canberra also facing downward pressure. The look-ahead comes after months of the property market losing momentum, with national dwelling values flatlining in May, and Sydney, Melbourne and Canberra already seeing falls, according to Cotality. Domain's forecasts for the 2027 financial year noted "a more fragmented and constrained market", as higher interest rates and tax policy changes affect both borrowing capacity and buyer demand. The Reserve Bank hiked rates in February, March and May this year, and the full effects are still washing through the economy. Domain chief residential economist Nicola Powell said the housing market was no longer moving in lock-step around the country. While the Sydney, Melbourne and Canberra markets are forecast to see falls, price growth is expected to continue in Brisbane, Adelaide and Perth. Across most markets, units are tipped to outperform houses, with Domain noting that first-home buyer schemes and affordability constraints will drive the price divergence, particularly in Sydney, Brisbane and Perth. It said the hit to borrowing capacity from interest rate rises had constrained purchasing power, meaning first-time buyers were increasingly entering the market via units. Domain’s forecasts have assumed the RBA’s cash rate will peak at the current level of 4.35 per cent, and there will be a rate cut in the second quarter of 2027. However, the prospect of further rate hikes has been acknowledged as the “principal downside risk” to their forecasts, which would push prices toward the lower end of the ranges published in the report. On Wednesday, Housing Minister Clare O’Neil described the recent cooling market conditions as a “correction” after years of extraordinary growth. “House prices have gone up just in that time by more than 50 per cent and we are seeing a correction on that,” the minister said.

Greek Tribune Adelaide, South Australia