House prices slide across Australia as Middle East conflict and tax changes begin to bite

Australia's housing market has experienced a decline across key cities, with Brisbane, Adelaide, and Perth witnessing a decrease in median home prices, according to Cotality data. The nation's median home price has sunk by approximately $19,000 from its March peak. Brisbane's median price has dropped about $8,000, now matching its March level of $1.1m, after an unprecedented 40 consecutive months of price growth.

Adelaide and Perth's median home prices have both dipped about $4,000 below their May highs of $944,000 and $1.03m, respectively. Regional Australia's home values experienced their first decline since January 2023 in June. Nationally, the median price is now $928,000 – a notable $19,000 below the March peak. Sydney, Melbourne, and Canberra's median prices have all fallen since February, with Sydney and Melbourne prices still above January 2025 and Canberra's prices above September 2025 levels.

The Reserve Bank of Australia reported that fewer than 1% of borrowers have fallen into negative equity, with an even smaller percentage struggling to make repayments. The housing market has slowed since February, following the RBA's interest rate hikes and the start of the Middle East conflict. Home loan applications have dropped by 15% since the first quarter of 2026, while NAB, Westpac, Equifax, and Loan Market have independently reported falling mortgage demand.

RBA Governor Michele Bullock expressed surprise at the slump in house prices and housing demand since May, attributing it to falling buyer demand rather than restrictive interest rates. She expects conditions to improve as people adapt to new rules and gain confidence, anticipating a potential price correction as the conflict overseas resolves.