Business · Economy · 16 hrs ago
Cheaper Australian homes fall fastest as property investors retreat
Australian home prices are falling, and the downturn is hitting cheaper properties hardest.
Ray White economist Nerida Conisbee found that the lowest-priced quarter of homes across eight capital cities has shifted from outperforming pricier homes to falling faster.
Budget changes to negative gearing and capital gains tax have helped drive investors away, alongside high interest rates and pressure on household budgets.
One buyer’s agent said investors made up about 70% of her business activity before the shift, compared with about 10% now.
National home prices have dropped 6.7% from their March peak, reducing the median dwelling’s value by $63,400 to $884,855.
Forecasters say the total fall could reach 15%, while Cotality says the current decline is the fastest of any downturn in the past 40 years.
Australian home prices are falling, with cheaper properties now recording the sharpest declines.
Ray White chief economist Nerida Conisbee said federal budget changes to negative gearing and capital gains tax have driven investors from the residential market.
Cotality data show national property prices are down 6.7 per cent from their March peak, while capital city values have fallen 8.1 per cent.
The national median dwelling value has dropped by $63,400 to $884,855.
Investment lending fell 9 per cent in the June quarter, and one buyer’s agent said investor clients had dropped from about 70 per cent of activity to about 10 per cent.
- Who
- Australian home buyers and property investors, with analysts including Nerida Conisbee and Tim Lawless commenting on the downturn.
- What
- Home prices are falling, with cheaper homes bearing the sharpest declines as investors retreat.
- When
- The downturn figures are reported on November 9, 2026; prices are measured from March peaks, and investment lending data cover the June quarter.
- Where
- Australia, including its eight capital cities and regional areas.
- Why
- Analysts cite budget tax changes, higher interest rates, affordability and serviceability constraints, low confidence, and cost-of-living pressures.
This story does not have two clearly opposing sides.
Cheaper houses were outperforming more expensive houses by an average of 1.3 percentage points over three months.
National property prices began their reported decline from the March peak.
The federal budget’s tax changes added downside pressure to the housing market.
More expensive houses were outperforming cheaper houses by 0.18 percentage points.
Investment lending fell 9 per cent.
- National price decline
- 6.7 per cent from the March peak
- Median dwelling value
- $884,855, down $63,400
- Capital city values
- Down 8.1 per cent from the March peak
- Regional prices
- Down 3.1 per cent since the April peak
- Investment lending
- Fell 9 per cent in the June quarter
- Investor share of agent activity
- About 70 per cent previously; currently about 10 per cent
What people are saying
The main driver of this change is the budget’s changes to negative gearing and capital gains tax and the subsequent withdrawal of investors
The federal budget has added to the downside pressure since mid-May
I had around 70 per cent of all activity coming from investors; it’s currently about 10 per cent