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Sydney house prices have recorded their biggest quarterly fall in four years, dropping by $82,420 in three months (July 1 to September 30). And it’s not just Sydney: for the first time in 15 years, home values have fallen across every Australian capital city at the same time.
According to Domain’s September Quarter 2026 Report, Sydney house prices fell 4.7 per cent to a median of $1.66 million, leaving them $143,062 below their December 2025 peak. It marks the city’s third consecutive quarterly decline.
The downturn is part of a broader national reversal. Combined capital city house prices fell 4.7 per cent ($59,870) to a median of $1,226,566, the steepest quarterly fall on record. Unit prices also declined 3.5 per cent ($25,129) to $702,858, their sharpest drop in 7.5 years.
RELATED READ: Revealed: The Sydney suburbs where property values have fallen by up to $353,500
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 recorded the steepest downturn of any capital city, with house prices falling 7.4 per cent to a median of $1.115 million. Brisbane followed with a 5.4 per cent decline to $1.15 million, ending almost four years of uninterrupted growth.
In Melbourne, prices fell 3.3 per cent to $1.014 million, bringing the city close to slipping below the million-dollar mark.
Across the remaining capital cities, house prices fell between 2.6 and 3.0 per cent over the September quarter. You can read the full Domain House Price Report for more details.
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