Property

House prices fall in every capital for first time in 15 years

Domain recorded the sharpest quarterly fall in combined capital house prices, with Perth suffering its biggest decline and conditions shifting in buyers' favour.

A Ray White auction sign on a suburban front lawn as buyers gather

An auction sign outside a suburban home. Digitally illustrated image.

By Bushletter Newsroom · 22 October 2026

TLDR

Australian house prices dropped across all eight capital cities in the September quarter, only the second time on record, as rate rises and cost-of-living pressures squeezed buyers. Perth recorded its steepest quarterly fall ever at 7.4 per cent, while the combined capital median slid to $1,226,566.

The scale of the falls

Combined capital city house prices fell 4.7 per cent over the September quarter to a median of $1,226,566, with every capital city recording a decline for the first time in 15 years and only the second time on record.^[1] Domain's September 2026 House Price Report, released 22 October, confirmed the breadth of the downturn.

Perth bore the sharpest pain, with house prices dropping 7.4 per cent to $1,115,227, the city's largest quarterly fall on record.^[1] Sydney fell 4.7 per cent and Melbourne 3.3 per cent, both their steepest quarterly falls in four years.^[2]

Combined capital unit prices fell 3.5 per cent to $702,858, their steepest decline in seven and a half years.^[1]

What is driving the downturn

The Reserve Bank of Australia lifted the cash rate target by 25 basis points to 4.60 per cent at its meeting on 29 September 2026, effective the following day.^[3]

"What began as weakness concentrated in some cities has broadened considerably," Domain chief residential economist Nicola Powell said.^[5] She said conditions had shifted to be more favourable for buyers.^[5]

"Confidence has really evaporated. Affordability is very stretched and borrowing capacity is reduced dramatically," property economist Cameron Kusher said.^[5]

What it means for buyers and sellers right now

Auction activity has roughly halved from last year, with 1,423 auctions across capital cities last week, according to Cotality.^[5]

The Reserve Bank's next rate decision is due in November, with the cash rate at 4.60 per cent.^[4]

KEY TAKEAWAYS

01Every Australian capital city recorded a house price fall in the September quarter, the first in 15 years.

02Perth house prices fell 7.4 per cent to $1,115,227, the city's largest quarterly fall on record.

03Sydney house prices fell 4.7 per cent, their steepest quarterly decline in four years.

04Combined capital unit prices fell 3.5 per cent to $702,858, their sharpest drop in seven and a half years.

05The RBA lifted the cash rate by 25 basis points to 4.60 per cent, effective 30 September 2026.

This article contains analysis and commentary on market conditions. It does not constitute financial, investment, or professional advice. Past performance is not indicative of future results. Always consult a qualified adviser before making financial decisions.

SOURCES & CITATIONS

FREQUENTLY ASKED QUESTIONS

When did Australian house prices last fall across all capital cities simultaneously?

The September 2026 quarter was only the second time on record, and the first time in 15 years, that every Australian capital city recorded a house price decline in the same quarter, according to Domain's September 2026 House Price Report.

Which city recorded the biggest house price fall in the September 2026 quarter?

Perth recorded the largest quarterly decline, with house prices falling 7.4 per cent to $1,115,227. Domain described it as Perth's biggest quarterly drop on record.

What is the current RBA cash rate?

The Reserve Bank of Australia lifted the cash rate target to 4.60 per cent at its 29 September 2026 meeting, effective 30 September 2026.

Are unit prices also falling?

Yes. Combined capital city unit prices fell 3.5 per cent to $702,858 in the September quarter, their steepest decline in seven and a half years, according to Domain.