Valuers tip more home price falls before next spring

Broad decline, clear timeline

The Australian Property Institute released a survey of 384 property valuers on 13 October 2026 forecasting national home prices will fall eight to eleven per cent from their March 2026 peak, with a recovery expected around the September 2027 quarter.^[1] The API Market Outlook Index scored 4.3 out of 10 for the September quarter, with Victoria recording the weakest state reading at 3.7.^[1]

Eighty per cent of API survey respondents named further interest rate rises as the main risk to the housing outlook.^[1] Rate hikes have curbed buyer demand since mid-2022, and the majority of valuers surveyed see more rises as the key threat to any stabilisation.

Where values stand now

Cotality's Home Value Index shows national dwelling values are already 5.2 per cent below their March 2026 peak.^[2] An eleven per cent total fall from that peak would return Sydney and Melbourne prices to early-2021 levels, based on the same index.

Tim Lawless, Research Director at Cotality, said "97 per cent of capital city suburbs were down in value over the three months to end of September, highlighting the broad-based scope of this negative housing cycle."^[2]

Rental vacancy edges higher

Australia's national rental vacancy rate rose to 1.4 per cent in September 2026, up from 1.3 per cent in August, with 42,290 dwellings vacant nationally.^[3] Sydney reached 1.8 per cent, while Perth and Adelaide remained tight at 0.6 per cent.

Louis Christopher, Managing Director of SQM Research, said "the national vacancy rate rising to 1.4 per cent suggests we are beginning to see a gradual easing in rental conditions, led by Sydney and Melbourne, where available rental stock has increased over the past year."^[3] The API survey places the forecast recovery window at around the September 2027 quarter, giving buyers and renters a rough marker for when conditions may shift.