How a minor or major housing downturn could impact your city
New Cotality modelling data shows what property prices could look like across the capitals if the market fell by 5, 10, 15 or 20 per cent.
A minor or major housing downturn could have varying impacts on cities across Australia. Property data firm Cotality found that even a double-digit decline in home values would not significantly undo the gains made during the country's five-year housing boom. The analysis presents four scenarios: a 5%, 10%, 15%, and 20% market downturn, showing potential outcomes for capital cities.
Melbourne, which experienced peak dwelling values of $840,000 in November 2025, would need a fall of more than 10% to return to pre-pandemic levels, according to Cotality's head of research, Gerard Burg. In contrast, markets like Perth, Brisbane, and Adelaide have greater room for error as they had exceptional growth over the past five years.
Economists warn that the current market downturn is driven by restrictive interest rates, tax policy changes, and global uncertainty. The latest figures show Sydney and Melbourne prices have declined more than anticipated, while Brisbane and Perth have started falling earlier than expected. Concerns are mounting as auction clearance rates sit below 50% in major markets, signaling weak market conditions.
While some economists suggest a GFC-type scenario would be required for a 20% drop, others believe a 5% decrease is more likely given the ongoing downward trend in inflation. RBA governor Michele Bullock stated that the board is monitoring the housing market downturn, but it is not the primary focus for future rate decisions. The RBA expects house prices to continue declining gradually over time due to factors such as excess capacity, tight labor markets, the Middle East conflict, and the AI boom.
Written by urgent.news from ABC News AU's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
