You could be forgiven for thinking Australian property is in freefall. Open a newspaper in August 2026 and you will read about Sydney’s median dropping $69,000 since February, Melbourne sliding steadily, and the downturn reaching Brisbane and Adelaide. The national median sits at $928,000, about $19,000 below its March peak.
And yet. PropTrack data shows house prices rose in 85% of Australian suburbs over the 12 months to June 2026, and unit prices rose in 90%. Of the suburbs that recorded falls, roughly half were declines of less than 3%.
How do both of these stories fit together? The answer reveals something important about reading a property market.
The Headlines and the Head-Scratcher
The downturn story is not fiction. National dwelling values fell 0.7% in July, the largest single monthly decline since December 2022. Sydney dropped 1.2% in June. Melbourne has been softening for months. Brisbane and Adelaide both posted their second consecutive monthly declines.
Now consider this: house prices rose in 85% of Australian suburbs over the year to June. Unit prices climbed in 90%. Where declines occurred, about half were less than 3%. The monthly capital-city aggregate is one story. The annual suburb-level data is another. Both are true.
Where the Growth Actually Is
The suburbs leading the country on annual growth are not in Sydney or Melbourne. Ravenswood in Tasmania posted a 41% gain at a median of $511,000. Home Hill in Queensland rose 40% to $404,000. Waverley, also in Tasmania, climbed 39% to $514,000.
For units, Hillcrest in Queensland, Beenleigh in Queensland, and Orelia in Western Australia each recorded 42% annual growth.
The pattern is clear: affordable regional areas are leading. Geraldton, Bunbury, Busselton, and Albany in WA all posted annual growth above 20%. Morwell, Mildura, and Bendigo in Victoria did the same. In regional NSW, Albury and Wagga Wagga continue to lead while Sydney has softened.
Darwin was the only capital city where prices rose in June 2026. In Hobart, nearly 90% of suburbs recorded house price growth over the June quarter, led by Clarendon Vale with a 9% quarterly gain and 21% annually.
City-to-region moves outnumbered the reverse flow by 29.7% in the March quarter 2026. The shift is driven by affordability and remote-work flexibility. By early 2026, an estimated 35 to 40% of knowledge workers had some form of flexible or hybrid arrangement, reducing the need to commute five days a week. Buyers priced out of capitals are finding value further afield without giving up their career.
Why “National” Reporting Often Misses the Mark
The structural problem: monthly and quarterly “national” releases cover only the eight capital cities. They ignore 17 cities with populations above 100,000, along with more than 400 other towns. Roughly 10 million Australians are absent from “national” reporting.
In the June quarter, just one of those eight capital cities recorded an annual decline in dwelling values: Melbourne, at 0.4%. Meanwhile, 95% of the nation’s 400-plus cities and towns recorded house value growth between 0% and 4%.
The quarterly weakness that generated so many headlines is geographically concentrated. In the June quarter, 50% of Australian suburbs fell into negative territory. But 70.58% of those were in NSW and 68.96% in Victoria. The quarterly story was really about two states.
Then there is the “Rest of State” problem. Bundling regional areas into a single “Rest of NSW” line showing 7% growth hides that Wagga Wagga grew 24%, Armidale 20%, and Port Macquarie 5%. These are markedly different markets treated as one.
What Is Actually Driving the Two-Speed Market
Interest rates have done much of the work. The RBA cut once and then hiked three times in the first half of 2026, pushing the cash rate to 4.35%. Variable rates for new owner-occupier loans reached 5.93%. That reduces borrowing capacity, and it bites hardest in the most expensive markets.
The May 2026 Federal Budget abolished negative gearing for established homes and reduced the CGT discount. NAB reported a 15% fall in home loan applications from Q1 to Q2 2026. Investor sentiment cooled quickly.
But the biggest force reshaping the market right now is affordability. REA Group senior economist Anne Flaherty describes it as “the dominant force shaping the market.” First-home buyer activity is surging in affordable suburbs, backed by the expanded Australian Government 5% deposit scheme. First-home buyers reached 29% of owner-occupier lending nationally in the March quarter, above the decade average of 27.6%.
You can see it in the numbers. Units are outperforming houses in four of eight capitals. The lowest 25% of dwellings by value is outperforming the top 25% in every capital except Hobart and Canberra. Buyers are cascading down the price ladder, and that flow of demand is what keeps 85% of suburbs in positive territory.
Why a Floor Exists Under Prices and Where We Go from Here
Supply constraints remain a powerful structural support. Listings in many markets were more than 50% below normal earlier in 2026. Even in Brisbane, where supply rebounded from 25% below the five-year average in February to 6% above by August, the turnaround reflects a return to normal rather than any glut.
Low unemployment at 4.4%, continued population growth, and the difficulty of new construction all provide a floor. Cotality head of research Gerard Burg put it plainly: “If unemployment remains quite low, we don’t have a lot of forced sales. That could limit that degree of supply side pressure to really drive values much lower.”
The RBA has reported fewer than 1% of borrowers are in negative equity, and an even smaller share cannot make repayments.
365 suburbs joined Australia’s million-dollar median club in the 12 months to May 2026, lifting the national total to 1,600. Even as high-end markets in Sydney and Melbourne cooled, equity built up over years has redistributed into new price tiers.
Looking ahead, fragmentation is set to continue. Hobart is forecast to grow 6% this year and 7% in 2027, with Perth the only capital expected to grow faster at 8% in 2026. RBA Governor Michele Bullock expects conditions will settle as buyers and sellers adjust to the new tax rules and rates environment. The most likely path is not a uniform national downturn but different markets moving at different speeds, shaped by affordability, supply, and local demand.
Frequently Asked Questions
What percentage of Australian suburbs still have rising house prices?
House prices rose in 85% of Australian suburbs and unit prices rose in 90% over the 12 months to June 2026, according to PropTrack data. Of suburbs where prices fell, roughly half recorded declines of less than 3%. The June quarter weakness was concentrated in NSW and Victoria, while the annual figures show most locations remain ahead.
Which Australian suburbs have had the strongest price growth?
Ravenswood in Tasmania led with 41% annual house price growth at a median of $511,000, followed by Home Hill QLD at 40% ($404,000) and Waverley TAS at 39% ($514,000). Units: Hillcrest QLD, Beenleigh QLD, and Orelia WA each recorded 42% annual growth. The common thread is affordability, all sit well below the national median.
Why do headlines say the market is falling if 85% of suburbs are still up?
The downturn headlines draw from monthly and quarterly capital city data. Sydney and Melbourne, which together represent roughly 55 to 60% of national housing value, are in decline. But those reports ignore 400-plus towns and 17 cities with populations over 100,000 where growth has continued. The annual suburb-level data captures the gains made through late 2025 and early 2026.
Is the housing downturn spreading beyond Sydney and Melbourne?
Yes, the quarterly slowdown has reached Brisbane and Adelaide, which recorded declines of 0.6% and 0.2% in July 2026 after both set record highs earlier in the year. Perth managed a 0.1% increase. Brisbane and Adelaide prices remain well above year-ago levels, and Darwin was the only capital to record a price rise in June.
Are regional property markets still outperforming the capitals?
Yes. Regional areas have broadly outperformed capital cities since mid-2024. City-to-region moves outnumbered the reverse flow by 29.7% in the March quarter 2026, as buyers priced out of Sydney and Melbourne find value in Albury, Wagga Wagga, Bendigo, Mildura, and Geraldton. Remote-work flexibility has reinforced the trend, with fewer workers needing to commute five days a week.
What is driving the current property market weakness?
Three RBA rate hikes in 2026 pushed the cash rate to 4.35% and variable mortgage rates near 6%, reducing borrowing capacity. The May 2026 Federal Budget abolished negative gearing for established homes and reduced the CGT discount. NAB reported a 15% fall in home loan applications from Q1 to Q2 2026. These factors have cooled demand most sharply in the most expensive markets.
Are first home buyers in a better position now?
Yes. First-home buyers reached 29% of owner-occupier lending nationally in the March quarter, above the decade average of 27.6%, supported by the expanded Australian Government 5% deposit scheme. In softening markets like Sydney and Melbourne, buyers have greater negotiating power. The shift toward more affordable suburbs and units aligns with first-home buyer budgets.
How many Australian suburbs now have a million-dollar median price?
As of May 2026, 365 suburbs joined Australia’s million-dollar median club over the preceding 12 months, lifting the national total to 1,600. This occurred even as higher-end markets in Sydney and Melbourne cooled, reflecting broad accumulation of housing equity across the country.
Where are homes selling fastest in Australia right now?
Gray NT recorded the fastest-selling houses at nine median days on market, followed by Wanguri NT, Woodvale WA, and Skye VIC at 10 days each, according to PropTrack data. For buyer demand, Rocklea QLD leads houses with 145 enquiries per listing, followed by West Tamworth NSW (144) and Crows Nest NSW (142). Concord West NSW leads units at 156 enquiries. The common thread across all these suburbs is relative affordability.
Could Australian property prices crash?
Most analysts see a crash as unlikely. Supply remains tight, with listings in many markets more than 50% below normal for much of the year. Unemployment at 4.4% is low and fewer than 1% of borrowers are in negative equity. Cotality’s Gerard Burg described the outlook as “perhaps a prolonged, but not necessarily enormously deep, downturn.”
Are units or houses performing better right now?
Units are outperforming houses in four of eight capitals as affordability pushes buyers toward lower-priced property. Brisbane units recorded 21.8% annual growth against 18.6% for houses; Perth units gained 27.8% versus 25.6% for houses. The most affordable quartile of dwellings is outperforming the most expensive in almost every capital.
What does the RBA expect to happen with house prices?
RBA Governor Michele Bullock said in August 2026 she was surprised by the slump in prices and housing demand since May, attributing it to falling buyer demand rather than rates alone. She expects conditions will settle as buyers and sellers adjust to the new tax rules and rates environment.
The property market in 2026 is not one story. It is hundreds of local stories, most of which remain positive. The 85% figure reflects genuine demand flowing into affordable suburbs, regional centres, and unit markets.
If you are buying, selling, or holding property, the best thing you can do is look past the capital-city aggregates and examine your specific suburb or town. That local picture will almost certainly look different from the national headline, and right now, it is likely to look better.