Australian Home Prices Fall for a Seventh Month as a Rate Hike Looms
Australian home prices fell again in October 2026. Property data firm Cotality said national home values dropped 1.2% in the month, the seventh fall in a row, leaving values 6.7% below their March peak and 2.8% lower than a year ago. The fall comes just before the Reserve Bank of Australia is widely expected to raise interest rates again on November 3.
What happened
Cotality said capital city home values are now falling at their fastest pace in 40 years, down 8.1% in just seven months. That is a larger seven month fall than the 7% drop seen in 2022 to 2023, when the central bank raised rates sharply after the pandemic. Brisbane led the October declines, with home values down 2.0%, followed by Perth at 1.7% and Sydney at 1.6%. Sydney values are now 1.5% below where they were five years ago. Property sales have also slumped, falling 23% from a year earlier and standing 18% below the five year average. Sydney transaction volumes are down 30% from a year ago.
Cotality research director Tim Lawless said buyers have more stock to choose from and more leverage, but many are staying away because of low confidence and difficulty meeting loan repayments. Reuters reported the figures on November 2, 2026, and Dow Jones Newswires reported the same Cotality figures, including a fall of about 63,400 Australian dollars in the value of the median home since March.
Why it matters for beginners
A home value index tracks the typical price of homes across the country. When it falls for seven months in a row, it usually means buyers are cautious, sellers face more competition, and homes take longer to sell. Higher interest rates matter here because they raise monthly mortgage costs, which can limit how much buyers can borrow. That link also helps explain the expected rate decision: the Reserve Bank is trying to bring inflation down, and its next move could push mortgage costs higher even as home prices fall. For background, Australia inflation rose to 4.3% in September.
For a beginner, the key point is simple. Falling prices do not by themselves make buying easy, because borrowing costs, job security, and savings for a deposit still matter. This post is educational only and is not a buy or sell recommendation.
What to watch next
Watch the Reserve Bank of Australia decision on November 3. Markets imply nearly a 90% chance of a quarter point rise to 4.85%, which would be a fifth rise this year and an 18 year high, with a 20% chance rates could reach 5.1%. Also watch whether sales volumes recover, whether Brisbane and Perth keep falling faster than Sydney, and whether policymakers change their view on housing as a risk to the wider economy. The Reserve Bank has said most mortgage holders would still be in positive equity if prices fell 20%, and it has been sanguine about financial stability risks from a property downturn.
FAQ
How far have Australian home prices fallen from their peak?
National home values are 6.7% below their March peak, and capital city values are down 8.1% in seven months.
Which cities fell most in October?
Brisbane fell 2.0%, Perth fell 1.7%, and Sydney fell 1.6% in October.
Why is a rate rise expected on November 3?
Inflation has stayed above target, and markets imply nearly a 90% chance of a rise to 4.85%, which would be the fifth rise this year.
