Property Prices August 2026: Why Falls Are Concentrated at the Top
National home values fell 0.7% in July 2026, the steepest monthly decline since December 2022. But the headline number hides something more interesting: premium properties are falling roughly three times faster than affordable ones. Here is the full breakdown, city by city and price tier by price tier.
How much have Australian property prices fallen in 2026?
National home values fell 0.7% in July 2026, the largest monthly decline since December 2022. Sydney led the falls at 1.4%, followed by Melbourne at 1.2%, Brisbane at 0.6%, and Adelaide at 0.2%. Perth was the only capital city still recording a gain, up 0.1% for the month. The falls are heavily concentrated at the top of the market: upper-quartile (premium) property values fell 3.2% over the three months to July, while lower-quartile (affordable) values actually rose 0.3% over the same period.
Key Takeaways
- 1National home values fell 0.7% in July 2026, the steepest monthly decline since December 2022.
- 2Sydney fell 1.4% and Melbourne fell 1.2%, the two steepest falls of any capital city.
- 3Brisbane (-0.6%) and Adelaide (-0.2%) have now joined the downturn after two years of strong growth.
- 4Perth was the only capital still positive in July, up just 0.1%, with momentum clearly slowing.
- 5Upper-quartile (premium) property values fell 3.2% over the three months to July, while lower-quartile (affordable) values rose 0.3% over the same period.
- 6The combined regional index fell 0.2% in July, its first decline since January 2023, led by Regional NSW at -0.4%.
The National Picture: Steepest Fall Since 2022
Cotality's Home Value Index recorded a 0.7% national fall in July 2026, the steepest single-month decline since December 2022. It builds on a downturn that broadened through the middle of the year, with the three forces of higher interest rates, negative gearing and CGT reform, and the SMSF residential lending ban all continuing to weigh on demand from the buyer segments that drove the 2024 to 2026 boom.
Monthly Price Change by City, July 2026
Percentage change in dwelling values, month on month
Source: Cotality Home Value Index, July 2026. Perth is the only capital city still recording a monthly gain.
The table below sets out the full picture, including the regional trend that has now turned negative for the first time in over three years.
| City | July monthly change | Note |
|---|---|---|
| Sydney | -1.4% | Steepest fall of any capital, most investor-exposed market |
| Melbourne | -1.2% | Second-steepest fall, close behind Sydney |
| Brisbane | -0.6% | Second straight monthly fall after two years of strong growth |
| Adelaide | -0.2% | Now in mild decline after joining the downturn in July |
| Regional | -0.2% | First regional decline since January 2023, Regional NSW weakest at -0.4% |
| Perth | +0.1% | Sole capital still in positive territory, though barely |
The Real Story: A Two-Tier Market
The most revealing data point in the July figures is not the national average, it is the gap between price tiers. Over the three months to July, upper-quartile (premium) property values fell 3.2% nationally. Lower-quartile (affordable) property values, over the same three months, actually rose 0.3%.
Price Change by Tier, 3 Months to July 2026
Upper quartile (premium) vs lower quartile (affordable) property values
Affordable properties have continued to grow in value even as the national average falls, a genuinely two-speed market by price point, not just by city.
This pattern is consistent with what is driving the downturn. Higher borrowing costs and the withdrawal of negative gearing benefits on established property hit expensive, investor-heavy purchases hardest, exactly where premium properties sit. Affordable properties, more often bought by owner-occupiers and first home buyers using government schemes, have been comparatively insulated. For buyers priced out of the top of the market, this divergence is itself a signal worth watching.
Sydney and Melbourne: Leading the Falls
Sydney's 1.4% July fall was the steepest of any capital, extending a decline that has been building since auction clearance rates first crashed in May. As Australia's most expensive and most investor-heavy market, Sydney is also the market most exposed to the premium-tier weakness described above. Melbourne, close behind at 1.2%, shows a similar pattern.
Both cities combine the highest average property values with the highest concentration of investor activity, which is exactly the combination that the current mix of higher rates and reduced tax concessions punishes hardest.
Brisbane and Adelaide: The Boom Cities Turn
Brisbane and Adelaide were, until recently, two of the strongest-performing markets in the country. Both have now recorded consecutive monthly falls, a sharp reversal after roughly two years of rapid, largely investor-fuelled growth. Brisbane's July fall of 0.6% and Adelaide's 0.2% are modest in isolation, but the direction of travel matters: both cities are now falling in the same month, for the first time this cycle.
Perth remains the exception, still positive at 0.1% for the month, though that is a marked slowdown from the double-digit annual growth rates Perth recorded through 2025.
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Raj Bhangu
Principal Mortgage Broker, iSmart Finance Group
Raj Bhangu is the principal broker at iSmart Finance Group, specialising in investment property finance and helping clients navigate changing market and regulatory conditions across Sydney and beyond.
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