Updated: 11 August 2026
Welcome to our Australian property market update for August 2026. If you’re trying to buy your first home, the Australian property market right now looks confusing on purpose: headlines say prices are falling, your inspection Saturdays say otherwise, and the rules — interest rates, tax settings, deposit schemes — seem to change every quarter.
Here’s the short version: the Australian property market boom has paused, but it has split in two. Sydney is 5.3% below its January 2026 peak and Melbourne 5.5% below its March 2022 peak. The downturn is no longer confined to them — only Darwin, Perth and Hobart rose in July. Rates went up, not down, this year. And government support for first home buyers is the most generous it has ever been. This Australian property market update walks through what’s actually happening, city by city, with every figure sourced and dated.
1. Australian Property Market Update — August 2026 at a Glance
August 2026 finds the market past the turning point. Cotality’s national Home Value Index fell 0.7% in July and is down 1.9% over the quarter. The boom has not just stalled, it has turned — though annual growth is still positive at 5.3%.
Key highlights
The Australian property market has split in two. Only Darwin (+0.8%), Perth (+0.1%) and Hobart (+0.1%) rose in July. Sydney (−1.4%), Melbourne (−1.2%), Canberra (−1.0%), Brisbane (−0.6%) and Adelaide (−0.2%) all fell. Sydney is now 5.3% below its January 2026 peak, and Melbourne 5.5% below its March 2022 peak. Nationally, values sit 2.0% below the March 2026 peak.
Interest rates went up, not down. The RBA raised the cash rate three times in 2026 — February, March and May — taking it to 4.35% and fully unwinding 2025’s cuts, after inflation picked up through late 2025. The RBA has since held at 4.35% at both the June and August meetings, most recently on 11 August 2026. Cotality notes the likelihood of further hikes has faded, though the Governor has signalled the board retains a tightening bias.
The May Budget rewrote the investor rulebook. From 1 July 2027, negative gearing will be limited to newly built homes and the capital gains tax discount reworked. Cotality expects a material pullback in investor demand — which means less competition for first home buyers at entry-level price points.
Sellers are back, buyers have leverage. Capital city auction clearance rates have sat below 50% since late May, and advertised supply across the combined capitals is now 5.7% above its five-year average. Selling conditions are rebalancing toward buyers in the southern capitals.
First-home-buyer support keeps expanding. The 5% Deposit Scheme has had no income caps and unlimited places since 1 October 2025 (over 300,000 buyers helped since 2020, per Housing Australia), and Help to Buy — the federal shared-equity scheme — opened in December 2025.
What this means for buyers
The frantic, miss-out-every-weekend Australian property market of 2025 is over in most cities. If you’re buying in Sydney or Melbourne, time is back on your side. If you’re buying in Perth, Brisbane or Adelaide, the market is still moving — but even there, growth is slowing. Either way, the binding constraint in 2026 isn’t finding a home, it’s borrowing power — which is exactly where preparation pays.
Sources: Cotality Home Value Index, data as at 31 July 2026 (released 3 August 2026); RBA cash rate decision, 11 August 2026; firsthomebuyers.gov.au.
2. Australian Property Market Overview: Prices, Trends & Affordability
Australian property prices have turned
The national median dwelling value sits at $928,421 — up 5.3% over the past year and 27.9% over five years, but down 0.7% in July, according to Cotality’s Home Value Index. Calendar 2025 delivered 8.6% growth, the strongest year since 2021; calendar 2026 is shaping up very differently (see forecasts below). Regional Australia is holding up better than the capitals, easing just 0.2% in July against the combined capitals’ 0.9% fall, and still up 9.7% over the year.
What’s pushing Australian property prices down — and what’s holding them up
Headwinds: three rate rises have cut borrowing capacity; affordability is at record lows; consumer sentiment is deeply pessimistic; and the Budget’s investor tax changes are expected to pull investor demand back from near-record highs.
Tailwinds: Australia added 423,600 people (+1.6%) in the year to September 2025, including 311,000 net overseas migrants. Meanwhile new housing supply can’t keep up: 18,328 dwellings were approved in June 2026, up 7.2% on the month but still short of what the market needs, and the National Housing Accord’s 1.2 million homes target is badly off track — independent trackers put the likely shortfall around 260,000–325,000 homes by mid-2029. Cotality’s read: the most likely path is “a further loss of momentum and a drift towards lower home values, rather than a sharp correction.”
Housing affordability is stretched to records
Cotality’s latest Housing Affordability Report (November 2025) found servicing a new loan takes a record 45% of the median household income, a 20% deposit takes 11 years to save on the national dwelling median, and the median house now costs 8.9 times the median income (versus 6.6 times five years ago). And that report predates this year’s rate rises — serviceability is tighter again now. This is precisely why the 5% deposit and shared-equity schemes matter: they attack the deposit hurdle, which has become the bigger wall.
Mortgage costs and borrowing power
The average new home loan reached $724,415 in the March quarter 2026 — up 9.0% (about $60,000) in a year, per the ABS Lending Indicators. Lenders still assess your application at roughly 3 percentage points above your actual rate, so this year’s rate rises compound: estimates put the 2026 hit to borrowing power at roughly $36,000 for a single average-income buyer and $72,000 for a couple. The practical move isn’t waiting for cuts — it’s getting a current pre-approval, trimming limits on credit cards and buy-now-pay-later accounts, and borrowing to a repayment you can sustain.
Renting vs buying
National rents rose 5.9% over the year to July, the third straight month at that pace, with the national vacancy rate at 1.7% in July, against a ten-year average of 2.4%. Renters now spend a record 33.4% of income on rent (Cotality, November 2025). Rents rising while prices flatline is the classic setup that pushes renters into buying: ABS data shows first home buyer lending up 17.9% in value year-on-year, with the average first-home loan at $614,048.
Sources: Cotality Home Value Index, data as at 31 July 2026 + Housing Affordability Report Nov 2025; ABS Lending Indicators, March quarter 2026 (released 13 May 2026); ABS Building Approvals, June 2026 (released 30 July 2026); ABS National, state and territory population, September quarter 2025.
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3. The Australian Property Market by Capital City
All figures are Cotality Home Value Index, data as at 31 July 2026 (released 3 August 2026).
| City | Median dwelling | Month | Quarter | Year | Median house | Median unit |
|---|---|---|---|---|---|---|
| Sydney | $1,244,617 | −1.4% | −4.0% | −2.0% | $1,529,308 | $889,617 |
| Brisbane | $1,104,094 | −0.6% | −0.6% | +14.8% | $1,207,039 | $875,135 |
| Perth | $1,029,797 | +0.1% | −0.3% | +20.5% | $1,073,500 | $760,708 |
| Adelaide | $944,909 | −0.2% | +0.1% | +10.5% | $1,007,684 | $692,861 |
| Canberra | $883,138 | −1.0% | −2.1% | +1.0% | $1,025,827 | $594,894 |
| Melbourne | $797,354 | −1.2% | −3.4% | −2.8% | $936,528 | $632,021 |
| Hobart | $756,951 | +0.1% | +1.4% | +9.3% | $805,165 | $587,863 |
| Darwin | $642,175 | +0.8% | +2.4% | +16.3% | $755,082 | $475,907 |
| Regional Australia | $769,867 | −0.2% | −0.1% | +9.7% | $786,438 | $675,011 |
Sydney
The country’s most expensive market is in retreat: values fell 1.4% in July and are 5.3% below the January 2026 peak, with advertised supply across the combined capitals 5.7% above its five-year average. For first home buyers that means choice and negotiating power that didn’t exist a year ago. House rents still rose 6.1% over the year, so renting isn’t a refuge. FHB angle: the 5% Deposit Scheme cap here is the nation’s highest at $1,500,000 (also covering the Central Coast, Coffs Harbour–Grafton, the Illawarra, the Mid North Coast, Richmond–Tweed, and Newcastle and Lake Macquarie; $800,000 elsewhere in NSW) — see our NSW stamp duty guide for state concessions.
Melbourne
Australia’s value capital. Values slipped 1.2% in July, annual growth is now negative at −2.8%, and Melbourne sits 5.5% below its March 2022 all-time peak — the deepest of any capital. Five-year growth is now negative at −1.6% (versus Perth’s 85.5%). With a median unit at $632,021, Melbourne offers the cheapest big-city entry point in the country, and yields (3.9% dwellings) are their best since 2013. FHB angle: scheme cap $950,000 (including Geelong; $650,000 rest of Victoria).
Brisbane
Now easing — −0.6% in July, though still +14.8% for the year — and the nation’s second most expensive capital. Units (+17.1%) are outpacing houses, and the growth has shifted to the Logan, Ipswich and Moreton Bay corridors. FHB angle: scheme cap $1,000,000 (including the Gold Coast and Sunshine Coast); QLD also offers $0 stamp duty on new homes at any price, and the $30,000 First Home Owner Grant continues for contracts signed from 1 July 2026 onwards, on new homes under $750,000. Full detail in our Brisbane Property Market Update.
Perth
The nation’s growth leader: +20.5% over the year and +85.5% over five years, though the monthly pace has slowed to +0.1%. House rents rose 7.4% and unit rents 7.8% over the year. Westpac still tips Perth as 2026’s strongest capital (+13%). The catch: at a $1,029,797 median, Perth is no longer the cheap boomtown — it overtook Adelaide and Canberra during this cycle. FHB angle: scheme cap $850,000 ($600,000 rest of WA).
Adelaide
Steady rather than spectacular now: −0.2% in July, +10.5% for the year, median $944,909. Adelaide has grown 68.5% in five years, so the easy gains are behind it, but rents (+4.5% houses) and a 3.4% yield keep investor and FHB demand ticking. FHB angle: scheme cap $900,000 ($500,000 rest of SA) — see our SA first home owners grant guide.
Canberra
Still falling: −1.0% in July, −2.1% for the quarter, and 4.2% below its May 2022 peak. With the highest incomes in the country and a $594,894 median unit, Canberra is arguably the easiest capital for a working couple to buy into. Unit rents grew just 1.9% — the softest in the nation. FHB angle: scheme cap $1,000,000 territory-wide.
Hobart
Quietly recovering: +0.1% in July and +9.3% for the year, though values remain 0.7% below the 2022 peak. At a $756,951 median with 4.3% gross yields, Hobart is back on value-hunters’ lists, and house rents rose 8.3% — second only to Darwin. FHB angle: scheme cap $700,000 ($550,000 rest of Tasmania).
Darwin
The cheapest capital ($642,175 median) and still growing strongly (+16.3%), with the nation’s best yields (6.0% dwellings, 7.2% units) and strongest rent growth (houses +10.5%). FHB angle: the scheme cap is $750,000 in Darwin and $600,000 across the rest of the Territory.
Source: Cotality Home Value Index, data as at 31 July 2026; price caps from firsthomebuyers.gov.au, checked 11 August 2026.
4. Australian Property Market Forecasts for the Rest of 2026
Every major forecaster has cut its 2026 numbers since the autumn rate rises and the May Budget. The current spread for national/capital-city dwelling values:
| Forecaster | National 2026 | Sydney | Melbourne | Notes |
|---|---|---|---|---|
| NAB (Jun 2026) | −2% | −6 to −7% | −6 to −7% | Sees cash rate already peaked |
| CBA (May 2026) | Flat | — | — | Downside scenario nearer −5% |
| Westpac (26 May 2026) | Flat | −3% | −4% | But Perth +13%, Brisbane +9%, Adelaide +7%; assumes two more hikes |
| ANZ (May 2026) | +2.8% capitals | −0.7% | −1.7% | Tips a 2027 rebound |
| SQM Research (revised Mar 2026) | 0% to +3% | −2% to −6% | −1% to −4% | Perth/Darwin still double-digit |
Two things stand out. First, nobody is forecasting an Australian property market crash — the worst major-bank national number is −2% (see Westpac’s housing forecast update for the most detailed city splits). Second, the city splits matter far more than the national figure: the same year is expected to deliver double-digit growth in Perth and mid-single-digit falls in Sydney. National headlines will mislead you in either direction; read your own city’s data.
Sources: as dated per row; NAB via Capital Brief; Westpac Housing Forecast Update (primary); SQM Research media release.
5. Government Help for First Home Buyers (August 2026)
The federal schemes all now live at firsthomebuyers.gov.au (the old Housing Australia pages redirect there).
5% Deposit Scheme — buy with a 5% deposit and pay no LMI. No income caps, no place limits since 1 October 2025. Price caps by capital: Sydney $1,500,000 · Melbourne $950,000 · Brisbane $1,000,000 · Perth $850,000 · Adelaide $900,000 · Canberra $1,000,000 · Hobart $700,000 · Darwin $750,000 ($600,000 rest of the Territory). Lower caps apply outside capitals and listed regional centres.
Help to Buy — the government co-owns 30% (existing home) or 40% (new build) of your home, and you need just a 2% deposit. Income caps of $103,000 (individual) / $165,000 (single parents and joint applicants), indexed each 1 July, and 10,000 places a year. Applications opened in December 2025 and it is available in all states and territories. Note Help to Buy is citizens-only, where the 5% Deposit Scheme also admits permanent residents. Price caps are broadly the same as above, except Sydney’s is $1,300,000.
First Home Super Saver — save your deposit inside super and withdraw up to $50,000 (plus deemed earnings) per person.
5% Deposit Scheme — Single Parents stream (formerly the Family Home Guarantee) — single parents and legal guardians can buy with a 2% deposit.
State grants and concessions — each state adds its own first home owner grants and stamp duty concessions on top, and they change often (Queensland’s $30,000 grant, for example, applies to new-build contracts signed on or after 20 November 2023 and continues for contracts from 1 July 2026). Check our state guides: QLD, NSW, WA, SA.
Sources: firsthomebuyers.gov.au (5% Deposit Scheme + Help to Buy pages and price-cap tables); ATO; Queensland Government. All checked 11 August 2026.
Would you like to learn about your situation?
Navigating the Australian Property Market: Next Steps
Start with a budget, not a suburb. Three rate rises have moved everyone’s number. Get a current borrowing-capacity estimate before you fall in love with anything — our borrowing power calculator is the two-minute version.
Use the schemes before you save the “old-fashioned” 20%. At 11 years to save a full deposit on the national dwelling median, the 5% Deposit Scheme and Help to Buy aren’t shortcuts — they’re the difference between buying in 2026 and buying in 2037.
Match your strategy to your city. Falling market (Sydney, Melbourne, Canberra): negotiate hard, take your time, buy quality. Rising market (Perth, Brisbane, Adelaide, Darwin): preparation and fast, clean finance win. Either way, pre-approval first.
Consider units and second-ring suburbs. Unit growth is outpacing houses in the strongest markets, and the value gap between houses and units has never been wider.
Watch the dates. RBA meetings, the Help to Buy income caps that index each 1 July, and the Budget tax changes from 1 July 2027 — this market now moves on policy dates as much as auctions.
Get advice that’s current. Most of what you’ll read online about the Australian property market was true eight months ago and wrong today. A broker who watches this daily can tell you what your borrowing power, scheme eligibility and repayments look like this month. Speak with a mortgage broker.
Need help?
The Hunter Galloway team works with first-home buyers daily. We can help you:
- understand your borrowing capacity
- compare 30+ lenders
- secure fast pre-approval
- position your offer competitively
Getting this groundwork sorted dramatically increases your chances of buying the right home at the right price.
This article is general information only and does not take your personal financial circumstances into account. Always seek independent advice before making financial decisions.