Aussie Housing Falls Just Broke a 40-Year Record

Key Takeaways

• Home values across Australia's five biggest capitals have had their largest fall on record.
• The downturn is spreading to Brisbane and Perth as high interest rates bite.
• Owning several properties is not the same as being diversified.

Australia's housing downturn just passed a major milestone, and it's not a good one. It could also be about to get much worse. Home values in Sydney, Melbourne, Brisbane, Adelaide and Perth fell by a combined 8.7% from March to 11 November. That covers houses and units in the five major cities taken together and measured as an index. This is the largest fall recorded since the records started being made in 1980, passing the 8.6% fall of 2017-2019 (CBA, 3 November 2026 (https://www.commbank.com.au/articles/newsroom/2026/11/home-prices-record-downturn-commbank-economists.html)).

The speed stands out even more: the last fall in housing prices was 2017-2019 and it took roughly 19 months to reach the bottom. The fall we just saw went even further in only 8 months.

Data seems to show that rather than recovering, the problem is spreading. Brisbane and Perth are beginning to feel more pressure, with both in their fastest downturn on record. This just shows that it's not always as easy as moving money from one city to another. There are other bigger factors at play which affect the whole country. High interest rates are one of these factors and they have been squeezing the market by absorbing capital into mortgage payments and cutting out buyers.

A housing shortage seems like it should be a cure to this. But does the need for a home create the ability to generate a higher income and pay a bigger deposit that the bank is asking for? The RBA is still fighting inflation, lifting the cash rate to 4.85% on 3 November, and that means high interest rates on top of the current high cost of living.

The falling housing prices can hurt heavily mortgaged owners the most. Just because the price of the property or properties falls does not mean their existing loan shrinks. It's times like this when buying multiple properties as a "hedge" meets the reality that all the money is in the same exact asset: no diversification.

Gold could potentially start playing more of a role like it has been since 2008 and the GFC. It has outperformed property in Australia in general, it's mobile (A$1 million can fit in a carry-on bag), and one doesn't need to kick a tenant out of a gold bar for not paying rent for several months. Ainslie Bullion offers a full range of gold bullion (https://ainsliebullion.com.au/Buy).

Not everyone expects a long slide: CBA sees prices stabilising in the second half of 2027, helped by tight underlying supply and eventual rate cuts.

The continuation of this fall may heavily depend on inflation and interest rate decisions in reaction to it.

This article is general information only and does not constitute financial advice. Past performance is not indicative of future results. Always conduct your own research or consult a licensed financial adviser before making investment decisions.