House prices slide across Australia as Middle East conflict and tax changes begin to bite
Summary
House prices have dropped in several Australian cities, including Brisbane, Adelaide, and Perth, as the housing market slows down across the country. Factors such as higher interest rates, recent tax changes on property investors, and the conflict in the Middle East have contributed to reducing buyer demand since earlier this year.Key Facts
- Brisbane’s median house price fell about $8,000 since May, returning to March’s level of $1.1 million.
- Adelaide and Perth saw median prices drop by around $4,000 from their May peaks, now at $944,000 and $1.03 million.
- Regional Australia’s home values declined overall in June for the first time since January 2023.
- National median home price is $928,000, about $19,000 below the March high.
- Sydney, Melbourne, and Canberra prices also fell since February but remain higher than early 2025 levels.
- Less than 1% of borrowers owe more than their home’s worth (negative equity), and very few are struggling to make repayments.
- The Reserve Bank of Australia began raising interest rates in February 2026, which alongside the May federal budget changes to property investor tax benefits has lowered housing demand.
- Mortgage applications dropped 15% in the second quarter of 2026, according to NAB, with similar trends reported by other lenders.
- Auction clearance rates improved slightly from 47.4% in June to 53.6% recently, but new listing numbers fell as some sellers delay selling.
- The RBA is not expected to raise interest rates at its August 11 meeting.
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