Cotality’s national Home Value Index (HVI) fell 0.4% in June, the largest monthly decline since December 2022, led by drops in Sydney (‑1.2%), Melbourne (‑1.0%) and the ACT (‑0.6%).

Growth across the mid-sized capitals slowed sharply. Adelaide values were flat over the month, while Brisbane and Perth recorded modest gains of 0.3% and 0.7%, respectively. This is a clear step-down from the March quarter, when Brisbane values rose by an average of 1.9% per month and Perth by 2.5%. As conditions cool, the HVI has been revised lower in recent months, with the June update now showing the national index peaked in March and fell 0.7% over the June quarter.

“The downward revision reflects a market that is changing rapidly. Most regions have seen values revise lower over recent months, with the largest downgrades occurring in Perth and Brisbane, where the May index has been revised 88 and 53 basis points lower with the June update,” said Cotality’s research director Tim Lawless. 

The June quarter marked a clear shift, with capital city values down 1.3%, led by Sydney (‑3.2%), Melbourne (‑2.6%) and the ACT (‑1.3%).

“Weaker conditions through the second quarter of the year are attributable to an array of downside factors. Even before interest rates rose by seventy-five basis points, we were seeing affordability hurdles weighing on buyer demand. Higher cost-of-living pressures, deeply pessimistic sentiment and a further dampening of demand via property taxation changes announced in the federal budget are all contributing to weaker housing conditions," said Mr Lawless.

Signs of softer housing conditions are also evident in weaker auction clearance rates, lower estimated home sales and a rising number of properties listed for sale.‍

Since late May, combined capital city clearance rates have held below 50%, slipping to the low‑40% range from late June. Over the three months to June, capital city home sales are estimated to be 16.2% below a year earlier and 14.5% under the five‑year average, while advertised supply is broadly in line with the five‑year norm but almost 11% higher than a year ago.

“Such low clearance rates indicate a mismatch between buyer and seller pricing expectations. Buyers now have more stock to choose from and less urgency in their decision-making. Higher listings aren’t due to a pick-up in the flow of new listings; it’s a symptom of less demand in the market, which has led to an accumulation of advertised stock," Mr Lawless said.

Regional markets are still outperforming the capitals, with the combined regional index up 0.3% in June and 1.1% over the quarter, although growth is clearly slowing.

Regional Vic recorded the weakest result, with values down 0.1% in June, while values were flat across regional NSW over the month. Regional WA remains the strongest market across the broad regions of Australia, with values up 3.7% in the June quarter.