Australian Capital City Home Prices Mixed in May After Strong Multi-Year Gains

Median home prices in Australia’s capital cities fell in May 2026, the first monthly decline since January 2025, Cotality reported on Monday. Sydney, Melbourne and Canberra recorded lower median house prices than at the end of 2025, and cheaper homes in those cities also lost value. Nationally, prices were flat over the month.

Brisbane, Perth, Adelaide, Hobart and Darwin posted gains, but the pace of growth in those cities slowed. The number of homes listed for sale rose in most cities while the number of completed sales slipped. Auction clearance rates reached a new low for the year.

5 percent of homes listed for auction sold, according to Cotality’s preliminary national data. The final rate is typically lower, and clearance levels could approach the lows last seen during the 2020 lockdowns. 35 percent since February 2026, returning rates to their 2024 highs.

Economists have forecast a modest national price decline for 2026, and analysts at Morgan Stanley have said values could fall as much as 10 percent. Cotality’s Tim Lawless said the May drop in capital-city prices could mark the start of a year-long decline that reaches even the smaller cities that recorded earlier gains.

“In the context of such a significant upswing over the past five years, a 10 percent drop doesn’t seem unreasonable,” he said.

Home prices have risen about 35 percent nationally over the last five years. The Albanese government’s proposed tightening of property-investor tax breaks has added to market uncertainty. Housing minister Clare O’Neil said on Sunday that the tax changes were not the main driver of the price moderation.

“The tax changes we are making in the budget are not the main driver of that,” she told ABC’s Insiders. She added that renters would gain a better chance of buying homes because of the reforms. 9 percent, the highest level since September 2024.

5 percent, matching the record lows recorded in 2022 and 2023 when asking rents rose more than 10 percent a year. The Reserve Bank is not expected to cut interest rates until late 2027 at the earliest. 8 percent by June.