National dwelling values post first fall since 2022

Of the total dwelling value, households owned $12.18 trillion.

The ABS said the retreat came despite continued growth in Australia’s housing stock.

The number of residential dwellings rose by 54,400 over the quarter to 11,531,100, yet this was not enough to offset an $8,200 decline in the national mean dwelling price to $1,100,400.

ABS head of finance statistics, Dr Mish Tan, said weaker prices had driven the first quarterly reduction in the value of the nation’s dwelling stock in almost four years.

“The value of dwelling stock fell for the first time since the September quarter 2022,” she said.

NSW leads value decline

The fall was concentrated in several large markets, particularly NSW, where the total value of residential dwellings dropped 2 per cent, or $92.9 billion, during the June quarter.

Victoria’s dwelling stock value fell 1.6 per cent, or $44.3 billion, while the ACT recorded a 0.7 per cent, or $1.4 billion, decline. The ABS said that dwelling-stock values increased in every other state and territory.

Average dwelling prices followed a similar pattern, with NSW’s mean dwelling prices falling 2.4 per cent or $32,700 over the quarter, while Victoria recorded a 2.1 per cent reduction or $19,600.

The ACT’s mean price declined 1.3 per cent or $13,300, while prices rose in all other states and territories.

NSW nevertheless remained Australia’s most expensive housing market, with a mean dwelling price of $1,304,900.

Queensland ranked second at $1,130,600, narrowly ahead of Western Australia at $1,123,700, while the Northern Territory had the lowest mean price at $614,400.

Inflation remains the RBA focus

The housing slowdown comes as the Reserve Bank of Australia (RBA) maintains a firm focus on inflation, despite the expected effect higher borrowing costs are having on property prices and broader housing activity.

Speaking at The Australian Financial Review Property Summit in Sydney on Tuesday, RBA assistant governor Sarah Hunter said the central bank could lift interest rates again if inflation appeared likely to run ahead of the central bank’s forecasts.

“If there is a sense that inflation is going to be stronger than we think in the context of our forecast, the board may well have to raise interest rates to tackle that,” she said.

“I think the board has been pretty clear, and the staff as well. I’m certainly myself pretty clear that inflation is top priority right now – inflation is above target and has been for some time. We think that the risk to inflation relative to that baseline forecast was skewed to the upside.

“The board have been pretty clear that they don’t really have tolerance for inflation to continue to be… above target for an extended period.”

However, the assistant governor acknowledged that the RBA’s three consecutive rate rises earlier in 2026 were expected to weigh on prices and activity across the housing sector.

“Those three rate hikes at the start of the year, we understand and we know cyclically that will put some downward pressure on house prices and will slow things down a bit in the housing sector more broadly,” she said.

Meanwhile, Australia and New Zealand Banking Group’s (ANZ) global chief economist Richard Yetsenga urged caution against viewing the latest property-price falls in isolation.

“Property prices in Australia have risen 6.5 per cent a year for the last 30 years. We’re down about half of one year’s gain and up 1000 per cent the last 30 years,” he said.

He said the current adjustment should be understood as part of a broader transition in housing-market conditions rather than simply a short-term price movement.

“I do think we need to take a step back and think there are some broader forces going on here. We are probably going through quite a substantial change in the housing market, and one that probably needed to happen, and we’ve done it before,” he said.

[Related: Broker says property downturn creating opportunities for borrowers]