Australian Home Prices Forecast to Drop Through April 2027
Reserve Bank of Australia interest rate hikes and tax changes are driving a projected 7.8% decline in average capital city home prices.
The Australian property market is entering a downturn triggered by interest rate hikes from the Reserve Bank of Australia and modifications to property investor taxes implemented by the Parliament of Australia. Shane Oliver, chief economist at AMP, forecasts that average capital city home prices will decline by 7.8% through April 2027, marking one of the most significant drops in forty years.
Economic projections vary by region. National Australia Bank economists predict more severe declines of approximately 10% in Sydney and Melbourne. Conversely, smaller capitals including Brisbane, Perth, Adelaide, and Hobart may see values increase by 2026.
National Australia Bank expects price stabilization by early 2027, with modest growth returning in the second half of the year. This eventual recovery is expected to be supported by a persistent imbalance between housing supply and demand.
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