Housing market loses momentum as rental pressures persist
Australia’s residential property market shifted into a more cautious phase during the June quarter, with national house and other dwelling prices recording their first quarterly declines in several years.
The national median house price decreased by 1.2 per cent to $1,135,560, its first quarterly decline since September 2024. The median price for other dwellings fell by 0.9 per cent to $751,839, the first decline since March 2023.
Despite the quarterly falls, annual growth remained positive at 7.9 per cent for houses and 6.1 per cent for other dwellings.
Real Estate Institute of Australia President Jacob Caine said the figures showed a clear change in market momentum.
“Households have absorbed three cash-rate increases during 2026, alongside heightened international pressures and uncertainty following the housing tax changes proposed in the May Federal Budget,” Mr Caine said.
“While the quarterly figures cannot isolate the precise impact of each factor, the breadth of price declines shows that the market has entered a more cautious and uncertain phase.”
Conditions varied across the capital cities. Hobart recorded the strongest quarterly result for houses, rising 3.9 per cent, while Adelaide increased marginally and Brisbane remained stable. House prices declined elsewhere, led by Melbourne, down 3.1 per cent, and Perth, down 2.0 per cent.
For other dwellings, Canberra was the only capital to record an increase, rising 3.2 per cent. Prices remained stable in Sydney and Darwin and declined across the remaining capitals.
Mr Caine said softer sale prices did not mean Australia’s housing affordability challenge had been resolved.
“Higher borrowing costs continue to place substantial pressure on prospective buyers, while conditions in the rental market remain exceptionally tight,” he said.
The national median rent for a three-bedroom house increased by 1.2 per cent over the quarter to $651 per week and was 4.8 per cent higher over the year.
Darwin recorded the sharpest increase, with the median house rent rising by 12.7 per cent over the quarter and 19.5 per cent annually. Hobart and Perth also recorded continued quarterly and annual rent growth.
The national median rent for a two-bedroom other dwelling declined by 1.1 per cent over the quarter but remained 4.0 per cent higher than a year earlier.
Vacancy rates remained below the 3.0 per cent benchmark for a balanced rental market in every capital city. Adelaide remained the tightest market at 0.7 per cent, followed by Brisbane at 0.9 per cent and Hobart at 1.1 per cent. Darwin’s vacancy rate fell to 1.5 per cent.
“The contrast between softer sale prices and continuing rental pressure reflects Australia’s structural shortage of homes,” Mr Caine said.
“Market sentiment and prices can change quickly, but the underlying imbalance between housing demand and available supply remains.
“Policies that weaken investment confidence, reduce project feasibility, or create prolonged uncertainty risk making that imbalance worse.
“Every housing policy should be judged against a straightforward test: will it increase the number of homes available to Australians?
“Governments must accelerate planning and approval decisions, deliver enabling infrastructure, improve construction capacity and productivity, and provide stable and predictable settings for investment.
“Australia needs more homes, delivered sooner, across both the ownership and rental markets.”
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Media contact:
Cody Vella, REIA Media and Communications Manager
0447 611 102 | cody.vella@reia.com.au
