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Australian House Prices Fall a Record 4.7% as RBA Hike Odds Rise
Why are Australian house prices falling today?
Australian house prices fell a record 4.7% in the September quarter to a median $1,226,566, Domain reported on Thursday, as higher interest rates cut buyers' borrowing power and confidence.
Key numbers
| Capital city house prices, Sep quarter | -4.7%Steepest quarterly fall on record |
|---|---|
| Perth house prices | -7.4%Largest fall of any capital (median $1.12M, per [2]) |
| Capital city median house price | $1.23MDown $59,870 in the quarter (per [2]) |
| Capital city unit prices | -3.5%Second straight quarterly fall |
| RBA cash rate | 4.60%15-year high |
| Odds of November RBA hike | ~51%Up from 22% a day earlier (per [4]) |
What happened
Australian house prices fell a record 4.7% in the September quarter to a median $1,226,566, Domain reported on Thursday, as higher interest rates cut buyers' borrowing power and confidence. Perth fell the most at 7.4%, while Sydney dropped 4.7% and Melbourne 3.3%. Apartments and townhouses (units) fell 3.5%, their second straight quarterly drop. It is the first time in 15 years that all eight capitals fell together, and prices over the past year are now lower for the first time in more than three years. The Reserve Bank of Australia (RBA) raised its cash rate to 4.60% in September.
Why it matters
Australian house prices matter because a home is the biggest asset most families own, so a record fall can make households feel poorer and spend less. The Reserve Bank of Australia (RBA), the central bank that sets borrowing costs, may still raise rates, with traders giving about 51% odds of a rise on 3 November. That would make mortgages dearer even as home values slide.
Who this affects
- MarketbearishHigh impact
- Sellers lose value; buyers gain bargaining power.
- CompanybearishMedium impact
- Home owners face lower values and possible pricier loans.
- CompetitorsbearishMedium impact
- Perth hit hardest; Melbourne's fall was smaller.
- IndustrybearishMedium impact
- Real estate sellers face slower sales and price cuts.
All capital cities vs Perth, Sydney, Melbourne
| All capital cities | -4.7% | $1.23M |
|---|---|---|
| Perth | -7.4% | $1.12M |
| Sydney | -4.7% | $1.66M |
| Melbourne | -3.3% | $1.01M |
As of 2026-10-22
How we got here
RBA raises its cash rate to 4.60%, a 15-year high, as inflation stays above target.
RBA Deputy Governor Hauser calls the inflation outlook 'materially worse'; November hike odds jump to about 51%.
Domain reports a record 4.7% quarterly house price fall, with every capital city down.
What to watch
- RBA decision on a possible 0.25-point rise to 4.85% (one report says 2 November).2026-11-03
- September and third-quarter inflation figures, due next week, after August inflation hit 4%.Q4 2026
- Domain's next quarterly report, to show whether house price falls continue.Q1 2027
Educational content only. Not investment advice.
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