iscover 
New figures from Cotality showed the national Home Value Index fell 0.7 per cent over the month – the largest monthly decline since December 2022 and outpacing June’s 0.4 per cent fall – taking values down 1.9 per cent over the July quarter.
Annual growth, however, remains at 5.3 per cent nationally.
Sydney remained the weakest-performing capital, with values falling 1.4 per cent during the month, followed by Melbourne, down 1.2 per cent. Brisbane slipped 0.6 per cent and Adelaide lost 0.2 per cent, marking the second consecutive month of declines in both cities after historical revisions.
Perth was one of just three capitals to avoid the decline, edging 0.1 per cent higher, while Darwin again led the country with values up 0.8 per cent.
According to Cotality, the median house price in Australia now sits at $928,421, or just over $1 million for the combined capitals and $769,867 for the regions.
Separate figures from REA Group’s PropTrack also pointed to a weakening market, with national home prices falling 0.3 per cent in July for a fourth straight monthly decline.
PropTrack reported the national median home price in July was $894,000, while the median across the capital cities reached $992,000.
Momentum fades across the country
Cotality’s latest figures indicate the slowdown in house prices is no longer confined to Australia’s largest housing markets.
Both Brisbane and Adelaide had previously been among the country’s strongest-performing markets, but revised figures now show values have fallen for two consecutive months. While Brisbane has also slipped into quarterly decline, down 0.6 per cent, annual growth remains robust.
Adelaide dwelling values have grown 10.5 per cent annually and Brisbane 14.8 per cent.
The overall slowdown, however, is being felt by brokers and lenders alike. National Australia Bank has reported that total home lending applications fell 15 per cent in the June quarter.
At the same time, broker group Loan Market has also seen mortgage applications fall 26 per cent by volume and 23 per cent by value between early February 2026 and the end of June.
Brokers on the ground have also recently reported softer sentiment and increasingly cautious buyers.
Head of research at Cotality, Gerard Burg, said affordability constraints, three cash rate increases this year, higher fuel prices and weak consumer confidence had combined to weigh on buyer demand.
“These revisions highlight the rapid evolution in the market, particularly across the mid-sized capitals,” Burg said.
“Perth, in particular, has seen significant shifts, with June growth revised 120 basis points lower in our latest update, which pulled the once-booming city into negative territory for that month.”
Following months of growth, Perth’s property market has now started to cool.
The number of properties on the market in the Western Australian capital surpassed 6,000 at the end of June, while data from the Real Estate Institute of Western Australia found that three in 10 properties were now selling below their listing price.
REA Group senior economist Anne Flaherty said the market remained under pressure from high borrowing costs and weaker confidence.
“High interest rates are weighing on prices, with the impact of reduced borrowing capacities being exacerbated by ongoing cost-of-living pressures,” Flaherty said.
“Budget tax changes are also likely impacting overall buyer confidence, while ongoing price falls could be driving some buyers to delay purchasing until prices stabilise.”
Price point split and buyer behaviour changes
The latest data also showed the market remained split between price points.
National upper-quartile home values fell 3.2 per cent over the three months to July, while lower-priced properties continued to prove more resilient, rising 0.3 per cent over the same period.
According to Australian Finance Group data, first home buyers, as well as investors, have seen particular declines, while upgraders have proven more resilient.
Meanwhile, the slower housing market has had an impact on both buyers and sellers, brokers have reported.
According to brokers speaking to Broker Daily, buyers are now becoming more measured and disciplined in their purchasing decisions, opting to buy more comfortably within their borrowing capacity. Vendors are also either stepping back or opting for private treaty sales rather than risking an auction campaign in a weaker market.
Burg said the gap between buyers and sellers was beginning to reshape market activity.
“We have observed a deterioration in the flow of new listings across the country in recent weeks, led by Sydney, as potential vendors assess a weak market and choose to wait until conditions improve.”
Even so, advertised stock continues to build. Total listings across the combined capitals are now 5.7 per cent above the five-year average, while auction clearance rates have remained below 50 per cent since late May.
Regional markets finally lose ground
Regional Australia also lost momentum in July, ending a run of resilience that had continued since early 2023.
Cotality’s combined regional index fell 0.2 per cent over the month, its first monthly decline since January 2023, with regional NSW recording the largest fall at 0.4 per cent.
However, the picture was less severe in PropTrack’s data, which showed regional home prices were broadly steady over the month and continued to outperform capital cities.
[Related: Investor split emerges as mortgage demand cools]
Want to see more stories from trusted news sources?Make Broker Daily a preferred news source on Google.