Sydney and Melbourne House Prices Fall in June Quarter

Median house prices in Sydney and Melbourne declined during the June quarter of 2026, according to the latest report from Domain. Sydney saw the steepest drop among capital cities, with prices falling 3.3% to $1,733,891, while Melbourne prices decreased 3.1% to $1,041,205.

Economists attribute the downturn to three consecutive interest rate hikes, rising cost-of-living pressures, and muted consumer confidence. Investor activity has also been dampened by reforms to negative gearing and capital gains tax concessions introduced in the May federal budget. Sydney's auction clearance rates have hit their lowest levels since April 2020, although affordable areas in both cities remain buoyant.

Financial institutions anticipate further volatility. The National Australia Bank forecasts Sydney prices will decline approximately 7% over the course of 2026. Market experts warn that the current trend reflects a broader cooling period, with some suggesting the broader Australian housing market may face a prolonged downturn.