Australia’s property market has shifted again, with the latest Cotality Home Value Index showing national home values fell 0.4% in June. It was the largest monthly fall since December 2022 and confirms that the market slowdown is no longer isolated to a few pockets.
According to Cotality, the national market appears to have peaked in March, with values now down 0.7% over the June quarter. Capital city values fell 1.3% over the same period, led by Sydney, where values dropped 3.2%, and Melbourne, where values fell 2.6%.
While headlines about falling values can sound negative, the picture is more nuanced. For some homeowners, the data may be a prompt to review their position. For buyers, it could signal a more balanced market with more choice, less urgency and greater negotiating power.
The market is moving, but not evenly
The latest data shows clear differences between capital city markets.
Sydney recorded the sharpest monthly fall, with values down 1.2% in June. Melbourne followed with a 1.0% fall, while Canberra declined 0.6%. In contrast, Brisbane, Perth, Hobart and Darwin still recorded monthly growth, although the pace has slowed materially in some of the previously stronger markets.
Brisbane rose 0.3% in June and Perth increased 0.7%, but Cotality noted that this was a significant slowdown compared with the March quarter, when Brisbane values were rising at an average monthly pace of 1.9% and Perth at 2.5%.
This matters because it suggests the market is not simply “falling” or “rising”. Instead, different cities and regions are responding differently to affordability pressure, interest rates, local supply, investor activity and buyer confidence.
Regional markets are also continuing to outperform the capitals. Cotality reported that combined regional values rose 0.3% in June and 1.1% over the quarter, compared with a 1.3% quarterly fall across the combined capital cities. Regional WA was the strongest broad regional market, with values up 3.7% over the June quarter.
Why buyer demand is slowing
Cotality has pointed to a combination of factors behind the weaker conditions: stretched affordability, higher cost-of-living pressures, pessimistic consumer sentiment, higher interest rates and uncertainty around property taxation changes announced in the Federal Budget.
For buyers, higher interest rates affect borrowing capacity. Even where property prices soften, the ability to borrow, service a loan and meet lender requirements remains a major part of the equation.
For investors, the picture is becoming more complex. Proposed changes to negative gearing and capital gains tax settings have added uncertainty, particularly for investors considering established residential property. At the same time, rising holding costs, insurance, maintenance, strata fees and tighter serviceability assessments are making the numbers harder to stack up.
Cotality’s rental data shows rents are still rising, with national annual rental growth sitting at 5.9% over the financial year. National vacancy rates remain low at 1.6%, well below the decade average of 2.5%. However, Cotality also noted that only 0.8% of suburbs had the potential to offer a cash flow positive investment opportunity, assuming a 20% deposit and average mortgage rates.
In simple terms, rental demand remains strong, but that does not automatically mean every investment property makes financial sense.
Buyers may have more room to negotiate
One of the clearest signs of the market shift is the change in auction and listing conditions.
Cotality reported that the combined capital city auction clearance rate has remained below 50% since late May, falling into the low 40% range from late June. Capital city sales over the three months to June were estimated to be 16.2% lower than the same time last year and 14.5% below the five-year average for this time of year.
At the same time, advertised stock across the capitals is almost 11% higher than a year ago. Cotality’s research director Tim Lawless said this reflected an accumulation of stock due to lower demand, rather than a surge in new listings.
For buyers, that can create opportunity.
More stock can mean more choice. Lower clearance rates can mean less competition. Longer selling times can create more space to negotiate. This does not mean every vendor will discount heavily, but it does change the dynamic from the rapid, competitive conditions many buyers experienced during stronger phases of the market.
For pre-approved buyers with secure income, a clear budget and a good understanding of their borrowing capacity, this may be a market where preparation matters more than speed.
What this means for homeowners
For existing homeowners, softer market conditions do not automatically mean there is a problem. Property is a long-term asset, and many markets are still well above where they were several years ago.
However, this data is a useful reminder to review the basics.
If your fixed rate has ended, your repayments have increased, or you have not reviewed your loan recently, it may be worth checking whether your current loan is still competitive. Even in a softer property market, your lending position can make a significant difference to your monthly cash flow and long-term plans.
For homeowners considering selling, pricing expectations may also need to be realistic. In a market where buyers have more options, overpricing can lead to longer campaigns and weaker negotiation outcomes.
What this means for investors
Investor decisions now require a sharper lens.
Rental growth remains strong in many areas, but higher borrowing costs and proposed tax changes mean the old assumptions may no longer apply. Investors need to assess not just whether a property could grow in value, but whether they can comfortably hold it under different interest rate, rental and tax scenarios.
This is particularly important for investors looking at established dwellings, where proposed policy changes may affect future demand and after-tax outcomes.
On the other hand, a slower market can also create openings. Investors with strong borrowing capacity, good cash flow and a clear strategy may find less competition and better negotiating conditions. The key is not to chase a discount for the sake of it, but to understand whether the property still fits the broader financial plan.
What buyers should do next
The biggest mistake in a shifting market is relying on headlines alone.
A national fall of 0.4% tells part of the story, but property decisions are local and personal. A buyer in Sydney may be facing very different conditions to a buyer in Perth, Adelaide, regional WA or regional Queensland.
Before making a move, buyers should understand:
- What they can comfortably borrow, not just what they can technically borrow.
- How different interest rate scenarios could affect repayments.
- Whether the property type and location suit their long-term goals.
- How much room there may be to negotiate.
- Whether now is the right time to act, or whether waiting makes more sense.
The bottom line
The latest Cotality data confirms the housing market has softened, particularly across Sydney, Melbourne and the broader capital city market. But for buyers, this is not necessarily bad news.
After a long period of rapid growth, tight supply and strong competition, market conditions are becoming more balanced. Buyers have more stock to choose from, less urgency and potentially more room to negotiate.
For homeowners and investors, the message is also clear: this is a market where strategy matters. The right finance structure, realistic assumptions and good advice can make a meaningful difference.
Speak with a mortgage broker in Melbourne
Whether you are buying your first home, upgrading, investing or reviewing your current loan, softer market conditions can create opportunities — but only if you understand your numbers first.
A UFinancial mortgage broker in Melbourne can help you assess your borrowing capacity, compare loan options and understand what the latest property market data could mean for your next move.
If you are thinking about buying, refinancing or investing, speak with the UFinancial lending team today.
Book a chat with a UFinancial mortgage broker in Melbourne and get clear on your next step.
If you want clearer guidance before your next financial move, speak with UFinancial. We can help you review your lending, cash flow and broader financial position so your next decision is backed by strategy, not guesswork.
