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Key pointsToorak\u2019s house prices have fallen -$1,335,000 over the 12 months to June an analysis of data shows.Toorak\u2019s prices are down $2.38 million since peaking in 2024.South Yarra, Balwyn, Elwood, Box Hill\u2019s house prices have also fallen.\u00a0Experts say rising interest rates and changes to tax laws have hit the top end of the market.<\/p>\n
Toorak\u2019s median house price has fallen 36.8 per cent from its peak, after the suburb recorded its sharpest single-year drop on record.<\/p>\n
Higher interest rates, cost of living, changes to the tax treatment of investment properties and a looming Victorian election are being blamed for stopping vendors and buyers in their tracks and pushing prices down.<\/p>\n
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Toorak\u2019s house prices have dropped by millions since the peak.Joe Armao<\/p>\n
Toorak\u2019s median house price peaked at $5.8 million in March 2024, Domain data shows, and has fallen more than $2 million to reach a median price of $3,665,000 by the June quarter.<\/p>\n
Over the past 12 months to June alone, the exclusive suburb\u2019s median price fell 26.7 per cent or more than $1 million, its steepest annual drop on record.<\/p>\n
Though there have been some recent high-profile sales<\/a>, such as a house that Geelong Grammar School sold to a luxury home builder who transformed it and resold for $17 million-plus, overall fewer top-tier homes have changed hands, meaning median prices at the upper end of the market have become more volatile, causing large swings downwards, experts say.<\/p>\n Related Article The Reserve Bank\u2019s recent decisions to hold the cash rate steady may give some reprieve to mortgage holders, but may not be enough to stop further house price falls at the upper end of the market, with governor Michele Bullock warning rates may need to rise again.<\/p>\n South Yarra\u2019s median house price also fell by -11 per cent, or -$471,000 over the year to June.<\/p>\n The suburb is down 21.4 per cent or -$510,000, since its peak in April 2023.<\/p>\n Elsewhere, Balwyn\u2019s slumped -14.2 per cent, Elwood\u2019s -9.3 per cent, and Box Hill\u2019s -10.6 per cent, making up the top five falls in house prices over the 12 months to June.<\/p>\n Each of the three suburbs is down by more than -16 per cent since peaking.<\/p>\n<\/p>\n Domain\u2019s chief residential economist Dr Nicola Powell said there were a number of reasons Melbourne\u2019s prestige market had fallen faster and by bigger numbers than in previous downturns.<\/p>\n \u201cWe were seeing the market slow down after three rate hikes this year, and that compounded with taxation changes which spooked the market completely \u2026 it\u2019s all compounding and compressing house prices,\u201d she said.<\/p>\n Melbourne\u2019s upper end market usually recorded deeper declines in a downturn, with buyers and sellers more affected by a fall in borrowing power and mortgage serviceability, Powell said.<\/p>\n Related Article The top end leads both the downturn and the recovery of the market, she said.<\/p>\n \u201cHistorically premium suburbs recover first and that reflects buyer and seller confidence returning,\u201d Powell said.<\/p>\n Morell and Koren director and prestige buyer\u2019s advocate David Morell said buyers and sellers at the top end of town were sitting on their hands.<\/p>\n \u201cWhat we\u2019ve seen is effectively since the budget the market has stopped,\u201d Morell said. \u201cNo-one wants to go to the market when there is no market.\u201d<\/p>\n With more money than most, sellers were able to wait it out until they got the price they were looking for.<\/p>\n \u201cWhat happens in this market is opportunistic buyers make an offer and then the vendor throws their toys out of the pram and doesn\u2019t want to sell,\u201d he said.<\/p>\n Many deals are being done off-market as vendors test the market, and the depth of buyers\u2019 pockets, Morell said.<\/p>\n Forbes Global Properties director Michael Armstrong agreed.<\/p>\n Related Article \u201cSo far for the year half of the transactions have been off-market,\u201d Armstrong said. Those properties that were selling had terms attached, like a longer settlement.<\/p>\n \u201cTerms are an important part of bringing deals together,\u201d Armstrong said. \u201cI think we\u2019ve got a lot of people who would love to do things at the moment but the commodity that\u2019s in short supply is confidence, not capital.\u201d<\/p>\n Buyer and seller sentiment was being affected by the political landscape \u2013 both at state and federal level as an election was on the horizon in Victoria and the federal budget changed tax arrangements for capital gains and negative gearing.<\/p>\n \u201cOnce that settles people will get off the fence,\u201d Armstrong said. \u201cPeople are in wait-and-see mode.\u201d<\/p>\n![\"Discounting](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/09\/8d3693c7a602a40127639b773d5fcf44ee6ebcde.jpeg\")
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House prices in South Yarra have fallen by more than half-a-million dollars since they peaked.Eddie Jim<\/p>\n![\"The](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/09\/562ef95b590f2c6d693f0d823c45cb2ba4e46b6a.jpeg\")
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