Data from the property insights platform Cotality, pulled exclusively for Guardian Australia, shows property prices outside the scheme\u2019s price caps began falling in April.<\/p>\n
Properties below the caps rose faster in price, for longer, but began to fall in June.<\/p>\n
Chart showing slower decline of first home buyer property prices <\/a><\/p>\n Lauren Jones, a Brisbane buyers\u2019 agent, said she had seen only some first home buyers out and about, despite the quieter market working in their favour.<\/p>\n \u201cThis is what first-time buyers have been waiting for \u2026 and they\u2019re just not taking the opportunity,\u201d Jones said.<\/p>\n The Reserve Bank\u2019s interest rate rises have pushed the average new loan rate above 6% annually, likely forcing some first home buyers to give up.<\/p>\n Jones said buyers had also been spooked by falling prices.<\/p>\n \u201cThey freak out when the market\u2019s freaking out,\u201d she said.<\/p>\n \u201cFirst time buyers are out there putting in aggressive offers when the market\u2019s hot, but the moment the market cools down, they back off.\u201d<\/p>\n Expensive property demand collapses<\/p>\n While more affordable homes are starting to cool, Australia\u2019s most expensive homes are recording deeper declines.<\/p>\n Higher-end home prices are slumping in Sydney, Melbourne and Canberra. Sydney\u2019s top quartile \u2013 the top 25% of the market \u2013 has seen a median price fall of about $90,000 in the last three months.<\/p>\n The top quartiles are made up of homes worth about $1.8m and over in Sydney, $1.1m in Melbourne, $1.4m in Brisbane, $1.2m in Adelaide and $1.3m in Perth.<\/p>\n In Hobart, where most home prices are still rising, the top quartile of the market has seen prices go backwards in the three months to June. Lower demand has translated to slower price growth for expensive properties in Brisbane, Adelaide and Perth.<\/p>\n Chart showing decline in prices of expensive homes<\/a><\/p>\n Jones said Brisbane buyers had grown pickier about top-priced properties, looking for fully renovated homes and ignoring or getting big discounts on houses that need work.<\/p>\n \u201cThe unrenovated stuff is just sitting there and will be dropping in price quite a bit.\u201d<\/p>\n But buyers could not afford to be so picky over more affordable homes, she said.<\/p>\n \u201cThat\u2019s probably happening more at the top end than it is at the bottom end [where] they\u2019ll still just take what they can get.\u201d<\/p>\n skip past newsletter promotion<\/a>Free newsletter | When needed<\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n after newsletter promotion<\/p>\n Investors cutting back<\/p>\n In mid May, the federal budget cut off access to negative gearing for investors buying existing homes<\/a>. Banks responded by slashing investors\u2019 borrowing capacity by about 20%, National Australia Bank reported.<\/p>\n Investor lending was rising at 10.3% annually in May, its fastest rate in a decade, Reserve Bank data shows. Regulator data shows Commonwealth Bank, ANZ, Macquarie and Westpac lent the most.<\/p>\n Investor loans fell by a fifth from the budget to mid-June while owner-occupier demand held steady, Westpac said.<\/p>\n Before the budget, investors had grown to account for about 40% of new home loans at major banks. Westpac\u2019s chief executive for consumer, Carolyn McCann, said in June investors had fallen towards the historical average of about 33% of the bank\u2019s lending.<\/p>\n \u201cWe\u2019re expecting people are sitting on their hands a bit while they understand the rules,\u201d McCann said.<\/p>\n Chart showing number of home loans taken out by investors<\/a>Investors buying new<\/p>\n Investors remain interested in buying new homes thanks to the budget giving those tax advantages over existing property.<\/p>\n Labor\u2019s reforms allow investors buying or building new dwellings to continue to negatively gear them and, when they sell, choose between the new or old capital gains tax discounts.<\/p>\n Loan Market data indicates new homes are surviving the slump in investor spending, with the brokerage receiving 31% more applications from such investors this June from last June.<\/p>\n Chart showing number of investors wanting new homes<\/a><\/p>\n New builds rose even further as a proportion, from 4.5% of Loan Market\u2019s 2025 total to 7% of its 2026 total. It\u2019s small but significant, since national ABS data shows new builds accounted just 4% of all investor loans since the start of 2025.<\/p>\n Nick Marino, head of sales at Swooper, a land developer in south-west Sydney, said the downturn was hitting the new-build market, with inquiries down and some developers offering $20,000 discounts.<\/p>\n But those in the market for a new home on the urban fringe have been keen to buy, Marino said. Investors had held steady, accounting for 20% of Swoopland\u2019s business.<\/p>\n \u201cOur transactions are very, very healthy,\u201d Marino said. \u201cWe are starting to see more investors coming to the market, but it\u2019s a tricky market.\u201d<\/p>\n Home sales slumping<\/p>\n The most obvious sign the market is in turmoil is the collapse in auction sales, leaving more homes on the market for longer.<\/p>\n Since late May, fewer than half of homes listed for auction each week have successfully sold<\/a>. The rate is even lower in Sydney.<\/p>\n![\"Newsroom](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/07\/1919.jpg\")
Newsroom edition: House prices in Australia are falling \u2013 will it hurt Labor? \u2013 Full Story podcast<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/06\/2998.jpg\")
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