House prices fall in Sydney and Melbourne as interest rates and Iran war fallout spook buyers

Data shows slowdown in price growth across the country after consecutive RBA cash rate hikes Follow our Australia news live blog for latest updates Get our breaking news email, free app or daily news podcast House prices in Sydney and Melbourne are falling as interest rate rises and economic uncertainty caused by conflict in the Middle East saw buyers leave the market during the last quarter. New Cotality data shows growth has slowed across the country in the last three months. The slowdown that began in December has continued, due largely to the Reserve Bank interest rate hikes in February and March putting median homes out of reach. The Cotality data shows Australia’s most expensive real estate markets have entered a downturn. In Melbourne, properties priced at the lower end of the market saw values pick up 0.6% in the first three months of 2026. But the top end of the market fell 1.9%. The city’s median home price fell $5,000 to $828,249 over the period, with its eastern suburbs recording the biggest drops. Sydney’s median home price, meanwhile, fell $4,000 over the period to $1,295,387. Its bottom-priced quarter of houses saw values pick up 2.5%, with demand strong in the city’