Australia’s two largest housing markets are now in their first downturn since the early stages of the COVID-19 pandemic as buyers react to mounting cost pressures.
Cotality’s rolling daily home value index shows prices in Sydney and Melbourne have been falling since February and were 0.04% lower as of Sunday.
Nationally, overall dwelling values are still rising because gains in Perth, Brisbane and Adelaide are outweighing the big-city declines.
Cotality’s research team links the weakness in Sydney and Melbourne directly to rising interest rates combining with sharply higher fuel costs, which together hit household budgets and borrowing capacity.
The firm tracks auction clearance rates alongside its price data and notes that values in the two largest cities have been easing for more than three months.
Clearance rates have not stayed at today’s softer levels for that entire period but the price trend keeps edging lower.
Analysts view that pattern as a clear signal that demand is no longer strong enough to absorb available stock at previous price points.
Historically, Cotality counts only about five periods in the past 15 years when auction clearance rates have held around these weaker levels for an extended stretch.
Every one of those episodes coincides with a housing downturn, reinforcing the view that Sydney and Melbourne are now in a genuine downswing rather than a brief pause.
The backdrop contrasts sharply with Perth, Brisbane and Adelaide, where ongoing price growth is still propping up the national index.
Australia’s housing market looks increasingly fragmented, with pressure on big-city borrowers from higher living and borrowing costs emerging as the key fault line.
