House Prices Fall Hardest in Brisbane and Sydney as National Values Drop 5.2%

House prices in Brisbane and Sydney have fallen faster than in most other Australian cities as a national property slowdown intensifies, according to new data from Cotality released on Thursday.

The figures show that house values have dropped in almost every suburb across Australia's largest cities, with Brisbane recording steeper declines than Sydney. Nationally, prices have fallen 5.2% from their peak in March, bringing values back to roughly where they stood a year earlier.

Interest rates squeeze borrowing capacity

The slowdown has been linked to higher interest rates, which have reduced how much buyers are able to borrow and, in turn, how much they are willing or able to pay for property. As borrowing capacity has tightened, demand has cooled across the housing market, putting downward pressure on prices in cities that had previously seen strong growth.

The scale of the decline in Brisbane marks a notable shift, given the city had been one of the strongest-performing property markets in the country in recent years. Sydney, long Australia's most expensive housing market, has also recorded widespread falls, though at a somewhat slower pace than Brisbane.

Cotality's data suggests the downturn is broad-based rather than confined to a handful of suburbs, with declines recorded across the large majority of markets tracked in both cities.

The report does not specify when the current cycle of price falls might stabilise, and further movements will likely depend on the trajectory of interest rates and broader economic conditions in the months ahead.