Home Prices Have Fallen for Six Months in a Row. Here Is What Actually Matters

New figures released today confirm what a lot of buyers and sellers have already sensed this year. Cotality's Home Value Index fell 1.1 per cent nationally in September, the sixth consecutive monthly decline, leaving values 5.2 per cent below the peak reached back in March. Sydney and Melbourne have led the falls among the larger cities. Darwin is the only capital still rising.

If you are trying to work out what this actually means for you, whether you are buying, selling, or simply own a home, the headline number only tells part of the story.

What the figures actually show

Among the capitals, Brisbane recorded the sharpest monthly fall at 1.5 per cent, followed by Sydney at 1.4 per cent and Melbourne at 0.7 per cent. Adelaide and Perth also declined. Cotality's research director Tim Lawless noted that 97 per cent of capital city suburbs recorded a value decline over the three months to the end of September, which tells you this is a broad pullback rather than a few postcodes dragging down the average.

Zoom out to a full year and the picture is more mixed. Nationally, values are flat over the past twelve months. Perth and Darwin are still up strongly on an annual basis, over 10 per cent in both cities, while Sydney and Melbourne have slipped into negative annual territory. Sydney values now sit close to 9 per cent below their February peak, and Melbourne around 7 per cent below its own high point.

It is not just prices that are softening. Sales activity over the past year is down around 19 per cent nationally compared with the prior year, and the typical time it takes to sell a home has stretched from 23 days to 39 days. Homes are taking longer to find a buyer, and there are more of them sitting on the market at once.

Why values are falling

Two forces are doing most of the work here. The Reserve Bank has raised the cash rate four times this year, taking it to 4.60 per cent, which has pulled back how much buyers can borrow and how comfortable they feel stretching their budgets. Alongside that, the changes to negative gearing and capital gains tax that passed earlier this year have cooled demand from property investors specifically, which matters because investors have historically made up a meaningful share of buyer activity in Sydney and Melbourne in particular.

Lawless made an interesting observation worth sitting with: a lot of prospective buyers simply do not have the confidence or financial capacity to buy right now, even with prices easing. A softer market does not automatically translate into easier access for the people who most need it.

How far could this go

Here the views start to diverge, and it is worth being upfront that nobody has a reliable crystal ball on this. Lawless himself has suggested a peak to trough fall somewhere in the order of 10 per cent to 15 per cent is a reasonable estimate. Other economists cited in Reuters reporting have pointed to a figure closer to 10 per cent, which would still make this the largest downturn in roughly three decades. HSBC has floated a steeper 13 per cent fall if rates were to rise further. At the more cautious end, AMP's chief economist Shane Oliver has flagged a worst case scenario of around 20 per cent, a scenario he associates with real risk to the broader economy rather than the housing market alone. You may want to treat all of these as informed estimates rather than firm predictions, and it would be sensible to check for updated commentary as the next few months of data come in.

What this means if you are buying, owning, or selling

If you are a first home buyer, softer prices in some markets are a genuine silver lining, but they do not undo the effect of higher rates on how much you can actually borrow. The two forces are pulling in opposite directions, and the honest answer is that your real borrowing capacity, not the listed price of a home, is still the number that matters most.

If you already own your home, a run of monthly declines is unsettling to read about, but it is not a reason to make a rushed decision. Property values move in cycles, and most owners are not planning to sell in the next six months regardless of what the index says this week.

If you are selling, the longer time on market is the figure to pay attention to. Pricing realistically from the outset, rather than testing the market at last year's number, tends to produce a better outcome than a string of price drops later.

None of this replaces a proper look at your own numbers. If you want to understand what a changing market means for your specific borrowing power or timing, a conversation with a Claremont Financial broker will tell you far more than any national average.

Figures in this article are drawn from Cotality's Home Value Index for September 2026 and commentary from Cotality research director Tim Lawless, alongside Reuters reporting on economist forecasts from HSBC and AMP. All figures were current at time of publication and should be confirmed against your own circumstances.

This article is general information only and does not take into account your personal objectives, financial situation or needs. Please speak with a Claremont Financial broker before making any borrowing decision.