Property value growth continued a patchy downward trend in July, due mainly to falls in the more expensive home market, new figures show.
Cotality’s monthly national Home Value Index (HVI) fell 0.7 per cent in July, the largest single-month decline since December 2022.
Sydney and Melbourne continue to lead the decline, with home values dropping by 1.4 per cent and 1.2 per cent respectively over the month. Values in Melbourne peaked in November last year, while Sydney reached its highest point in January.
Data from July confirmed that the downturn has now extended to previously robust mid-sized markets, following sizeable increases across the December and March quarters.
Home values in Brisbane and Adelaide fell by 0.6 per cent and 0.2 per cent respectively, with historical revisions indicating this marks the second consecutive month of declines for both cities. Perth managed a modest 0.1 per cent increase following a revised 0.5 per cent contraction in June.
The decline is patchy, however, and remains heavily weighted toward higher-value properties. Upper-quartile home values fell by 3.2 per cent nationally over the three months to July, compared with a 0.3 per cent gain across the lower price tier.
Cotality Head of Research Gerard Burg noted that recent revisions reflect how quickly conditions are changing across individual markets.
"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."
Buyer and seller expectations are also shifting to reflect the evolving market. Demand-side factors, such as affordability and mortgage serviceability constraints evident late last year, cash rate hikes, higher fuel costs and lower consumer confidence due to the Iran conflict and the policy changes coming out of the budget, have pulled in the same direction. Sellers have arguably been slower to adjust, but a shift is becoming apparent.
Nationally, total home listings sat 1.1 per cent below the five-year average over the four weeks ending 26 July, up from 25.9 per cent below average in mid-January. Among the combined capitals, advertised supply is now 5.7 per cent above average.
“There remains a mismatch between the pricing expectations of buyers and sellers”, Burg said.
“Capital city auction clearance rates have remained below 50 per cent since late May, although they have moved up from the low 40s range in mid-to-late June.”
While regional markets have consistently outperformed the capital cities since the peaks of October 2025, the demand-driven loss of momentum has also hit these markets with the combined regional index falling by 0.2 per cent in July, the first decline in this measure since January 2023.