Brisbane and Sydney Lead Falls in Australian House Prices as Values Drop 5.2%

House prices are falling across almost every suburb in Australia's largest cities, with Brisbane recording steeper declines than Sydney as the property market slowdown intensifies, according to new data released on Thursday.

Data from property analytics firm Cotality shows that national house values have fallen 5.2% from their peak in March to levels seen a year earlier, reflecting a broadening downturn across the country's housing market.

Interest rates squeeze borrowing power

The decline has been attributed in part to elevated interest rates, which have reduced how much buyers are able to borrow and, in turn, weighed on the prices they are able to pay. Brisbane, which saw some of the sharpest price growth during the post-pandemic property boom, has now emerged as one of the hardest-hit markets in the current downturn, with prices falling faster there than in Sydney.

Sydney, Australia's most expensive housing market, has also recorded broad-based declines, though the pace of the pullback there has been somewhat more moderate compared with Brisbane, according to the data.

The nationwide pattern suggests that affordability pressures tied to borrowing costs are affecting property values broadly, rather than being confined to a single city or region. Analysts have pointed to constrained borrowing capacity as a key driver, as higher rates limit the size of mortgages many prospective buyers can secure.

It remains to be seen how long the current downturn will persist, with the trajectory of prices likely to depend heavily on future movements in interest rates and broader economic conditions affecting household budgets.