Australia Property Market Outlook: Mid-Year 2026
Is now a good time to buy property in Australia? For the first time in a couple of years, the honest answer applies to most of the country, not just one or two cities. National dwelling values fell for the second straight month in June, according to Cotality’s latest Home Value Index, the sharpest monthly drop since December 2022. And the conditions behind that shift have very little to do with waiting for a rate cut.
Most buyers holding off right now are holding off for the wrong reason. They’re waiting for relief that isn’t signposted anywhere in the current data. Meanwhile the conditions that actually create buying leverage, falling clearance rates, more stock on the market, softer competition, are already here.
This mid-year update covers what the latest Cotality figures show, city by city, and why the second half of 2026 is shaping up as a more useful window for buyers than the headlines suggest.
What the national numbers are showing
National dwelling values fell 0.4% in June, the largest month-on-month fall since December 2022, and are down 0.7% over the quarter. Cotality’s index shows the national market peaked in March and has been drifting lower since. The annual figure still reads as 7.3% growth, but that number is backward-looking and increasingly disconnected from what’s happening on the ground now.
| City | 12-month growth |
|---|---|
| Perth | 23.9% |
| Brisbane | 17.4% |
| Adelaide | 11.6% |
| Sydney | 0.3% |
| Melbourne | -0.9% |
Those annual figures still show a gap between the two largest cities and the rest, but they’re telling last year’s story more than this one. Every one of these markets has slowed sharply since March, and two of them have already turned negative on a monthly and quarterly basis.
Sydney and Melbourne: what’s changed for buyers
Sydney values fell 1.2% in June and are down 3.2% over the quarter, now sitting 3.7% below the January 2026 peak. Annual growth has slowed to just 0.3%, a fraction of the pace recorded through 2024. Properties that were selling above asking price twelve months ago are increasingly sitting on the market, or selling below it.
Melbourne has moved further from its highs than any other capital. Values are down 2.6% over the quarter and now sit 4.0% below the March 2022 peak, the largest gap to a prior high of any major city. Annual growth has turned negative, down 0.9% over the year. Melbourne has been the softest capital for some time, and that softness is now showing up at the upper end of the market too, where properties are taking longer to sell and vendors are more willing to negotiate.
Auction clearance rates: a reliable signal
One of the clearest signs that buyer competition has eased is the auction clearance rate. Combined capital city clearance rates have held below 50% since late May, dropping into the low 40% range through late June, well below where they sat a year ago. Cotality’s research director has pointed to this as a sign of a genuine mismatch between what buyers and vendors expect, with buyers now facing more stock and less urgency in their decisions.
A clearance rate above 70% typically points to a seller’s market: fast decisions, limited room to negotiate. Below 50%, the balance shifts. More properties pass in, more deals happen through private treaty, and there’s more time to do proper due diligence before bidding. That’s roughly where the combined capitals sit right now.
Why buyers are gaining leverage
Advertised listings across the capitals are now running around 11% higher than a year ago, even though the flow of brand new listings hasn’t picked up. Cotality’s view is that this reflects weaker demand rather than a rush of new sellers: properties are simply sitting on the market for longer. At the same time, capital city home sales over the three months to June are estimated to be 16.2% lower than the same period last year.
More stock, fewer transactions. That combination is what shifts negotiating power toward buyers, and it’s happening at the same time as interest rates stay high and sentiment stays soft.
Perth, Brisbane and Adelaide: still ahead, but slowing hard
It would be wrong to read the national slowdown as evenly spread. Perth is still up 23.9% over the past 12 months, Brisbane 17.4%, and Adelaide 11.6%. Stock in those markets remains tighter than in Sydney and Melbourne, and vendor discounting is far less common. For buyers weighing up investment opportunities in Perth or Adelaide specifically, that tighter supply is still the defining feature of those markets.
But the pace has broken hard. Perth’s monthly growth has slowed to 0.7%, down from an average of 2.5% a month through the March quarter. Brisbane’s monthly pace has fallen from 1.9% to 0.3%. Adelaide was flat in June. Cotality has already revised its May figures lower for both Perth and Brisbane, by 88 and 53 basis points respectively, as the market moves faster than the index can be finalised.
For buyers in those three cities, the opportunity still looks different to Sydney and Melbourne. The priority remains access, finding properties before they reach the public portals, rather than negotiating from a position of market weakness.
A second headwind: negative gearing and capital gains tax changes
There’s a factor working through the market that has nothing to do with clearance rates or listings. Proposed changes to negative gearing and capital gains tax settings, announced in the federal budget, are expected to pull back investor demand for established housing. Cotality has flagged this as a genuine headwind, arriving at a time when investors were already dealing with higher holding costs and tighter lending assessments. The stated policy goal is to redirect capital toward new housing supply, but the near-term effect is likely to be less investor competition for existing homes, one more factor adding to the shift in buyer leverage rather than taking away from it.
How long do property downturns usually last?
This is one of the most common questions buyers ask when sentiment softens, and the historical data is instructive.
| Cycle | Trigger | Duration | National decline |
|---|---|---|---|
| GFC 2008 | Global financial crisis | ~12 months | -4.7% |
| 2017-2019 | APRA credit tightening | ~20 months | -8.38% |
| COVID 2020 | Pandemic lockdowns | ~3-4 months | -1.7% |
| 2022-2023 | RBA rate hikes (+300bps) | ~9-10 months | -8.4% |
| Late 2024 | Affordability and sentiment | ~3 months | ~-0.1% |
Three of the five cleared in under four months. The deepest, the 2022-23 rate-hiking cycle, was over in under ten months despite being the largest peak-to-trough decline of the group. In every case, the market recovered and went higher. And in every case, by the time sentiment had visibly improved and headlines turned positive, prices had already moved. The buyers who acted during the quiet period captured equity that buyers who waited did not.
Should you wait for a rate cut?
This is the question behind most of the hesitation right now, and the data doesn’t support waiting. The Reserve Bank held the cash rate steady in June at 4.35%, having already raised it three times this year, and the language coming out of that meeting was about inflation risk rather than easing. Underlying inflation remains above target and the labour market is still tight.
The major banks don’t agree on what happens next. Westpac is forecasting two further hikes this year, which would take the cash rate to 4.85%. CBA, ANZ and NAB expect the cash rate to hold at 4.35% for the remainder of 2026, and none of the four is currently forecasting a cut before 2027.
There is no scenario in current forecasts where rate relief arrives before the end of this year. Property markets have also tended to move before rate cuts land, not after them. Waiting for confirmation that rates are falling isn’t a conservative strategy. Historically, it’s been an expensive one.
What off-market access means right now
With on-market stock elevated across most cities, the real value of a buyers agent isn’t finding another listing on the portals, there are already plenty of those. It’s cutting through them, and finding the properties that never reach realestate.com.au or Domain at all. Off-market and pre-market properties are transacted through direct relationships: buyers agents speaking to selling agents, developers and owners who haven’t yet decided to sell publicly.
At Cohen Handler, our team sources and secures properties every week that never appear on the major portals. In a market with more advertised stock than usual but fewer genuine transactions, that access matters more, not less. It’s the difference between sorting through noise and finding the right property.
What to look for in a buyers agent in 2026
Not all buyers agents operate the same way. In a market where conditions vary sharply by city, suburb and property type, the value of a buyers agent comes down to three things.
Access. Can they show you properties that aren’t publicly listed? Analysis. Can they tell you whether a property is fairly priced against comparable sales, particularly now that many vendors are still pricing to their peak expectations from twelve months ago? Negotiation. Can they consistently achieve outcomes that a buyer negotiating independently cannot?
The buyers agents sending you portal links aren’t providing any of those three things. The distinction matters more in a market like this one than it does when everything is rising regardless.
Mid-year 2026 summary: what buyers should know
The Australian property market in mid-2026 isn’t one market, but for the first time in a while, most of it is moving in the same direction. Sydney and Melbourne have already turned negative on a quarterly basis. Perth, Brisbane and Adelaide are still up strongly over the past year, but the monthly pace across all three has slowed sharply, and Cotality’s own figures have already been revised lower.
Clearance rates below 50%, listings running well above where they were a year ago, and softer sales volumes all point the same way: buyers have more room to negotiate than they’ve had in some time. Add proposed changes to negative gearing and capital gains tax, and investor competition for established housing is likely to ease further.
Waiting for a rate cut isn’t a viable strategy for anyone planning to buy this year. None of the major banks expect one before 2027, and the conditions creating opportunity today exist independently of interest rates. They won’t necessarily persist once sentiment turns.
If you’re considering purchasing this year and want to understand what current conditions mean for your specific brief, city, budget, property type, speak with one of our buyers agents.
Frequently asked questions
Is now a good time to buy property in Australia?
For much of the country, yes. Cotality’s June 2026 data shows national values falling for a second consecutive month, auction clearance rates below 50%, and listings up around 11% on a year ago. Conditions still vary by city, but buyer leverage has improved across most of the country.
Why are Sydney and Melbourne property values falling in 2026?
Sydney values are down 3.7% from their January 2026 peak and Melbourne is down 4.0% from its March 2022 peak. The main drivers are high interest rates, softer sentiment, more properties for sale, and weaker demand from investors ahead of proposed changes to negative gearing and capital gains tax.
Will interest rates come down in Australia in 2026?
Not according to any of the four major banks. CBA, ANZ and NAB expect the cash rate to hold at 4.35% through the rest of 2026, with cuts unlikely before 2027. Westpac is forecasting two further rate rises this year, which would take the cash rate to 4.85%.
How long do Australian property downturns usually last?
Recent cycles have typically run between three and twenty months. The COVID correction cleared in three to four months, the 2022-23 downturn (the deepest on record at 8.4% nationally) was over in under ten months, and the 2017-19 APRA-driven slowdown took closer to twenty months. In every case, values recovered and went on to reach new highs.
How are the proposed negative gearing and capital gains tax changes affecting property investors?
The changes are expected to reduce investor demand for established homes, adding to the softening already underway from higher interest rates and tighter lending. Cotality has flagged this as a genuine headwind for established housing demand, though the stated policy goal is to redirect investor capital toward new housing supply.