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Australia has made history once again, though not everyone is celebrating. For the first time in 15 years – and only the second time on record – home values have simultaneously fallen across every Australian capital city. It may be tough news for those looking to sell, but it really shouldn’t come as a surprise.
Australia's property market first showed signs of cracking in June, with prices falling for the first time in three years. Now, Domain’s September Quarter 2026 Report reveals combined capital city house prices plummeted 4.7 per cent ($59,870) to a median of $1,226,566 – the steepest quarterly fall on record. Meanwhile, unit prices declined 3.5 per cent ($25,129) over the September quarter to $702,858, marking their sharpest fall in 7.5 years.
Domain chief residential economist Dr Nicola Powell said, “Confidence has become one of the market’s biggest headwinds. Higher interest rates and persistent cost-of-living pressures are reducing how much buyers can borrow and their willingness to transact. When buyers expect prices could fall further, there is less urgency to act and greater incentive to wait.
“It’s a significant reversal for Perth, Brisbane and Adelaide. These were among the strongest markets of the previous growth cycle, but affordability constraints and weaker sentiment have caught up with them, resulting in some of the sharpest quarterly falls on record.”
Perth experienced the largest property value downturn of any Aussie capital, recording record falls across the board. House prices fell 7.4 per cent ($88,664) to a median of $1.115 million, while units dropped 6.5 per cent ($45,487) to $659,561.
Brisbane followed with the second-largest house price decline, recording its sharpest quarterly price fall on record. Dropping 5.4 per cent ($66,001) to $1.15 million, this brings an end to almost four years of uninterrupted growth for the River City.
The country’s two largest housing markets also took a severe hit, with Sydney and Melbourne recording their sharpest quarterly declines in four years and the third consecutive quarterly decline. In Sydney, house prices fell 4.7 per cent ($82,420) to $1.66 million, leaving the Harbour City a substantial $143,062 below its December 2025 peak. Meanwhile, Melbourne house prices dropped 3.3 per cent ($34,192) to $1.014 million, putting the city at risk of slipping below the million-dollar threshold it first claimed in June 2021.
Across the remaining capital cities, house prices retreated by between 2.6 per cent and 3.0 per cent over the September quarter. You can read more about the quarterly changes in the latest Domain House Price Report here.