Australian Home Values Fell 0.9% in August as Sydney's Decline Outpaced the 2022 Correction

Cotality's August index showed national Australian home values down 0.9%, a fifth straight monthly fall, with Sydney now 7.1% below its February peak.

Cotality's Home Value Index for August 2026, released on 31 August, put the monthly change in national Australian home values at -0.9% — the fifth consecutive decline. National values now sit 3.6% below their February peak, and the national median stands at $912,885. Around 93% of capital city suburbs registered a fall over the winter months, which makes this a broad correction rather than a story about two overheated cities.

Sydney is falling faster than it did under 425 basis points of tightening

The comparison drawn by Tim Lawless, Cotality's research director, is the one worth pausing on. Sydney values fell 1.4% in August and are down 7.1% from their February high. During the 2022–23 correction — when the Reserve Bank raised the cash rate by 425 basis points — Sydney fell 6.6% in total. The current decline has already exceeded that, and it is running at a faster monthly rate.

Sydney's median remains around $1.2 million, so the fall is measured against a very high base. But the pace, not the level, is what distinguishes this episode.

The strong markets have joined in

What changed in August is geographic breadth. Melbourne and Canberra each fell 1.1%, Brisbane 1.0% and Perth 0.8% — the last two having posted double-digit gains earlier in the year. Darwin was the only capital to record growth, rising 0.6% to a median of $647,000.

Outer suburbs have held up better than inner rings over the past twelve months. Brisbane's Beenleigh and Carbrook recorded annual gains above 14%, and Sydney's outer west, including Camden and Penrith, remained positive on a twelve-month view even as the citywide index turned.

Sales volumes tell the harder story

Price indices lag; transaction counts do not. Sales over the three months to August were 15.5% lower than a year earlier. Lawless summarised the supporting evidence: "Longer selling times, larger vendor discounting and persistently low auction clearance rates all point to a buyer's market."

The policy backdrop explains most of it. The Reserve Bank has raised the cash rate three times in 2026, to 4.35%, and markets moved to price a further increase after July's inflation surprise. Separately, changes to investor tax treatment have reduced demand from the segment that had been most active in Brisbane and Perth.

What a buyer's market does not tell you

Gerard Berg, Cotality's head of research, offered a caution to first-time buyers reading falling values as a signal: "if you are looking to hold the property for an extended period of time, you don't want to try and pick the bottom of the cycle."

On Glopra's own figures, Australia carries a national average of $6,500 per square metre on a gross rental yield of 4.69% and a price-to-income ratio of 8.2, which places it in elevated valuation territory even after five months of falls. A correction that has run 3.6% from peak has not, on those measures, restored affordability — it has only stopped it deteriorating.

Sources: Cotality Home Value Index via Reuters/Investing.com, 31 Aug 2026 https://www.investing.com/news/economy-news/australias-home-prices-extend-declines-in-august-as-downturn-deepens-4882955; CommBank Newsroom, 1 Sep 2026 https://www.commbank.com.au/articles/newsroom/2026/09/buyers-market-housing-prices-continue-downturn.html

Market data: Australia