Capital city home prices fall as experts predict Australia’s property slump could last a year and cut values by 10%

Buyers abandon auctions and Sydney, Melbourne and Canberra median house prices end May lower than they were at the end of 2025 Follow our Australia news live blog for latest updates Get our breaking news email, free app or daily news podcast Home prices in Australia’s capital cities have begun to fall, with experts predicting the decline could last at least a year and wipe as much as 10% from values. The median capital city home price fell in May, the first decline since January 2025, as high interest rates and inflation stretched buyer budgets, Cotality reported on Monday. Auction success hit a new low for the year. Sydney, Melbourne and Canberra median house prices ended May lower than they were at the end of 2025. Even homes at the cheaper end in those cities fell in value, losing the momentum maintained at the start of 2026. The Reserve Bank since February has returned interest rates to their 2024 highs, putting the official cash rate at 4.35% and lowering the borrowing power of potential buyers. Nationally, prices were flat over May, with slow growth in the regions outweighing metropolitan declines. Prices rose in Brisbane, Perth, Adelaide, Hobart and Darwin – but the rate