Cotality Home Value Index October 2026: Values Fall 1.2% for a Seventh Month as Brisbane and Perth Lead the Decline

Brisbane home values fell 2.0% in October on the Cotality Home Value Index, the largest fall of any capital, and Perth fell 1.7%. Nationally, dwelling values fell 1.2% for a seventh consecutive month, leaving them 6.7% below the March 2026 peak. Cotality puts that at about $63,400 off the median dwelling.

Independent analysis of the Cotality release. Monthly prints are provisional and revised as settlements are recorded.

Source: Cotality Home Value Index, October 2026 results (November 2026 release) (index results as at 31 October, released 2 November 2026); monthly = October 2026, annual = 12 months to October 2026; Cotality final clearance rates, week ending 1 November 2026; RBA, 3 November 2026; lender announcements of 4–5 November 2026.

How Much Did Home Values Fall in October 2026?

Source: Cotality Home Value Index, October 2026 results (November 2026 release), dwellings, index results as at 31 October 2026 (released 2 November 2026), October 2026 vintage.

Sydney is now 10.1% below its February peak, the deepest fall of any capital, and its annual change (−9.4%) is the weakest. Brisbane shows how quickly the annual column is rolling off: it was +5.9% in the September release and is now +0.4%, and Brisbane houses are already lower over the year (−0.2%).

Houses are falling faster than units. National house values fell 1.4% in the month and units 0.8%. The gap is widest in Sydney (houses −1.9%, units −0.7%) and Melbourne (−1.0%, −0.3%). In Brisbane (−2.0%, −1.7%) and Perth (−1.7%, −1.5%) units are falling almost as fast as houses, so they give investors less protection there.

What changed since the September edition: revisions on the latest data

Cotality re-estimates past months as settlements are recorded. This release revised September down in most capitals:

Source: Cotality Home Value Index, October 2026 results (November 2026 release), “Prior month level of revision” (p. 7), comparing the September 2026 and October 2026 vintages; first-published September figures from Cotality's release of 1 October 2026.

How much of the move is revision (an approximation). Working back from Cotality's rounded percentages, the October vintage puts national values about 5.6% below peak at the end of September, against the 5.2% first published. So roughly 0.4 points of the move from −5.2% to −6.7% is revision to earlier months and about 1.1 to 1.2 points is October itself. The same arithmetic gives revisions of about 1.0 point in Brisbane and 1.3 points in Perth, and almost none in Sydney or Melbourne. The split assumes the peak level itself was not revised, and each input is rounded to 0.1 point, so treat it as indicative rather than an exact decomposition.

Is This the Fastest Housing Downturn in 40 Years?

Cotality finding. “The speed of the decline in home values is tracking at the fastest pace seen over the past forty years,” Cotality says, comparing the first seven months of each downturn in the combined capitals. The 2017–19 fall, only 1.2% at the same stage, went on to become “the largest peak to trough decline on record at -8.2%”; today's −8.1% is a tenth of a point short of it.

The RBA's view. The November Statement on Monetary Policy put national housing prices 4.7% below their peak in September and called the downturn “one of the steepest over the past 50 years”. That is a September reading. Cotality's own index was 5.2% below peak in September as first published, about 5.6% on the latest data; the SoMP text doesn't name the series behind its 4.7%, so read the gap as a difference in measure rather than a disagreement. Its outlook chapter adds that “established housing prices have continued to fall more quickly than expected”.

How fast in annual terms. The table converts each city's three-month change to an annual rate. This shows momentum only; it is not a forecast.

Source: Cotality Home Value Index, October 2026 results (November 2026 release), rolling quarterly change, dwellings; annualised rate is our compounding of the quarterly change ((1 + q)⁴ − 1). Momentum measure only; no forecast is implied.

PropTrack's Eleanor Creagh, publishing PropTrack's own three-month annualised rates (about 9.5% for Brisbane and 8.1% for Perth, on a shallower index), calls them “measures of recent momentum, not forecasts of future annual price declines”.

Comparing downturns means comparing vintages and geographies. The 7.0% above is the combined capitals over the first seven months of 2022–23. The full national peak-to-trough fall in that cycle was about 7.5% on Cotality's current revised series (9.1% as first published), so at −6.7% the national index is within about a point of it and still moving.

Why Are Brisbane and Perth Now Falling Faster Than Sydney?

Cotality finding. “The mid-sized capitals, where home values recorded extreme growth conditions over the past six years, are now well and truly in a correction,” said Cotality research director Tim Lawless. “Virtually every suburb across Brisbane, Perth and Adelaide has recorded a drop in values over the past three months.”

The supply side. Cotality's October chart pack had total listings up 60.4% on a year earlier in Brisbane and 64.7% in Perth (four weeks to 11 October), against 19.1% for total listings overall. Over the year to September, median selling time rose from 17 to 38 days in Brisbane and from 11 to 26 days in Perth. The latest HVI adds that capital-city listings are at “the highest level for this time of year since 2019”, even with fresh listings almost 18% below average.

The demand side. Cotality's sales estimate for the past three months is 29% below a year earlier in Brisbane and 30% in Sydney. At auction, Brisbane's final clearance rate for the week to 1 November was 23.8%, the lowest of any capital and below 30% for a fifth consecutive week; Adelaide's was 35.4%, against 77.1% a year earlier (Cotality finals).

Even the strongest suburbs are slowing. Cotality's top-ten SA3 tables rank markets by 12-month growth. The leaders are still positive outside Sydney, Melbourne and Canberra, but their annual growth dropped sharply in a single month, Goldfields aside:

Source: Cotality Home Value Index, September 2026 and October 2026 results, top-ten SA3 tables by 12-month change in dwelling values (p. 5–6 of the November 2026 release).

No SA3 in Cotality's Sydney or Melbourne top tens recorded an annual gain in the October release, and all eight of Canberra's SA3s are lower over the year. In Brisbane, Adelaide and Perth every top-ten SA3 is still up over 12 months, led by Ipswich Hinterland (+7.9%), Gawler-Two Wells (+7.3%) and Mandurah (+9.1%), but most of that growth came before the autumn peaks.

How Much Equity Have Owners Lost, and Who Is Exposed?

Cotality finding. “Homeowners in Melbourne and Sydney aren't in as strong an equity position, with Melbourne home values 7.3% lower than five years ago and Sydney values 1.5% below October 2021 levels.” For the mid-sized capitals Cotality says most owners “are likely to be sitting on a significant equity buffer”, noting that a 20% drop from Perth's record high “would only take the market back to levels recorded in around mid-2025”.

The table applies each city's index changes to a purchase with an 80% loan-to-value ratio (LVR) on an interest-only loan, so the loan is unchanged and only the value moves.

Source: Cotality Home Value Index, October 2026 results (November 2026 release) (from-peak, five-year and ten-year changes in dwelling values); LVR figures are our illustration: 0.8 ÷ (1 + index change), interest-only loan, no principal repaid, the city index applied to an individual purchase. “Further fall” = the additional fall in value from today at which an 80% peak buyer's loan would equal the property's value.

These are index illustrations, not estimates of any borrower's equity. Renovations, how an individual property performed against its city, principal repaid and the lender's own valuation can all move the real figure materially.

Reading the table. The exposed group is recent buyers with small deposits. A peak buyer with a 10% deposit is at about 100% LVR in Sydney, 98% in Brisbane and 99% in Perth; in Melbourne, where the peak was March 2022, a 10% deposit buyer from then is at about 98%. Owners from five or more years ago in Brisbane, Adelaide and Perth hold large buffers, while five-year owners in Sydney and Canberra have no gain to show and Melbourne owners are behind.

Set against the bank forecasts. CommBank's economists (3 November) forecast a national peak-to-trough fall of about 14% (up from about 9% in their 1 September forecast), with Sydney about 16% and Brisbane and Perth about 18%. These are forecasts, and CBA's index base and peak dates may differ from Cotality's. As an illustrative scenario only, if those calls landed on Cotality's index, an 80% peak buyer would sit at about 95% LVR in Sydney and 98% in Brisbane and Perth, still just above water, while a 10% deposit peak buyer would be in negative equity in all three (our arithmetic).

What the RBA found. The October Financial Stability Review estimated that fewer than 1% of borrowers were in negative equity (loan above property value), with a uniform further 20% fall lifting that to around 5% in its stress test. Its data predate October's fall.

What Do Sales, Listings and Auctions Say About Demand?

Source: as listed. Clearance figures are Cotality's final series, not Sunday preliminaries. The HVI does not state the geography for the time-on-market and discount figures.

The week to 1 November was the seventh consecutive week with a final clearance rate below 50%, and the rate is 25.7 points below this year's high of 66.4%. Sydney cleared 45.1%, and Melbourne 44.3% over the Cup long weekend. The clearance rates vs cash rate chart tracks the series against each rate change since 2018.

Lawless says buyers “have a lot more stock to choose from, they have more leverage and there isn't the same urgency to buy as there was a year ago”, yet “despite this being a buyer's market, they are noticeably absent, reflecting low confidence and ongoing serviceability barriers.”

What the data can and can't say about cause. These measures fit demand-led weakness, but none separates discretionary from forced selling; arrears data are the better guide to that.

Rents, Vacancy and Yields: Does the Yield Repair Survive the Rate Hikes?

Cotality finding. National rents rose 0.9% over the three months to October (seasonally adjusted), “the lowest since January 2025”, and Cotality's vacancy rate reached 2.3%, “the highest national vacancy rate since January 2022” (HVI release, p. 3). Lawless puts the slowdown down to demand: renters “are likely to be approaching a ceiling on their capacity to pay more, following a 52% surge in rents over the past six years”. Cotality's quarterly Rental Review (9 October), a separate series covering the three months to September, had rents up 0.5% and vacancy at 2.1%.

Vacancy needs a label. Cotality's 2.3% is its own measure, for October. SQM Research, the measure this site tracks monthly, had national vacancy at 1.4% in September, with Brisbane, Perth, Adelaide, Darwin and Hobart all below 1%. The two use different methods and cover different months, so the levels aren't comparable, and SQM's lower reading doesn't contradict the rise Cotality reports. SQM's October figure, due mid-November, will give a same-month comparison.

Interest-cover stress test after the September and November hikes

Formula. Interest cover = gross yield ÷ (0.8 × interest rate), which is a year's gross rent divided by a year's interest on an interest-only loan at 80% of value. A result of 1.0× means rent just covers interest. It is not a cash-flow measure: principal repayments, operating costs, vacancy and tax are all excluded. The table covers units in all eight capitals plus houses in Sydney, Melbourne, Brisbane, Perth and Darwin.

Source: Cotality Home Value Index, October 2026 results (November 2026 release) (gross yields and annual rent change to October 2026 by capital, houses and units); interest cover is our calculation. 6.60% is the RBA's average rate on outstanding investor interest-only loans in August 2026, 6.57% as published, rounded (RBA Table F6, published 8 October 2026); 7.10% is a prospective rate assuming the 29 September and 3 November rises are passed on in full (big four from 13 November), not an effective rate on the analysis date or the rate every investor pays. Gross interest cover is not net cash flow: it excludes strata, insurance, maintenance, management, council rates, land tax, vacancy and tax.

Canberra and Perth units slipped from covering interest to just below it after the two rises; Melbourne units were already fractionally short at 6.60% (0.98×) and are now further behind. At the companion blog's 5.10% cash-rate stress setting (about 7.35% on an interest-only investor loan), Darwin houses fall to about 1.00× and only Darwin units clear interest with room to spare (1.28×). As an illustrative dollar example, a Melbourne unit at Cotality's median of $620,996 and a 5.2% yield earns about $32,300 a year in rent. Interest on an 80% interest-only loan at 7.10% is about $35,300, and an assumed $9,000 of holding costs leaves a pre-tax shortfall of about $12,000 a year, roughly $230 a week. The two rises since September add about $2,500 a year of that. Every input is an assumption; the cash flow calculator lets you use your own.

Lawless: “Although yields have risen to their highest level in more than eleven years, they are still nowhere near the levels needed to deliver a neutral or positive cash flow.” Our RBA 4.85% analysis sets out the weekly gap for a median dwelling in each capital.

Cross-Check: What Does PropTrack's October Index Show?

Source: Cotality Home Value Index, October 2026 results (November 2026 release); PropTrack, realestate.com.au Home Price Report, October 2026 (released 2 November 2026); annual and from-peak figures for some markets as reported by propertyupdate.com.au and Broker News. n/a: not stated in the sources used. Peak months shown for Sydney and Melbourne, where the indexes disagree most.

Creagh expects “weaker housing market conditions are likely to extend into 2027.” PropTrack's national annual figure moved from +0.1% in the September release to −1.9%, partly through revisions (PropTrack recalculates its history each month). PropTrack and Cotality use different hedonic models, data and coverage, so their monthly sizes aren't comparable; our PropTrack tracker holds the monthly series.

What Happens Next After the 4.85% Rate Hike?

The rate change. The RBA raised the cash rate to 4.85% on 3 November, with big four variable rates rising from 13 November. Cotality, writing before the decision, estimated another hike would take the cycle's fall in borrowing capacity to “around 11.5%, or more than $105,000”, more than the $63,400 fall in the national median value.

Cotality's outlook. “The balance of risks remains skewed to the downside, with the decline in home values on track to be the largest in at least forty years.” Its central case is still “a gradual drift lower in housing values rather than a more material downturn”. Unemployment was 4.7% in September and the trimmed mean 3.7% over the year (ABS, as cited by Cotality; see our September-quarter CPI analysis).

Source: our scenario analysis on Cotality's October 2026 index. Method: each monthly change is applied to the November, December and January prints (released early December, early January and early February) and compounded from October's level of 93.3% of peak; for example, base low = 0.933 × 0.992³ ≈ 0.911, or −8.9%. The paths hold each monthly rate constant and don't allow for revisions to October, changes in the rate outlook, shifts in the mix of dwellings sold, or capital cities moving differently from the national index. The triggers are conditions we would look for, not Cotality indicators. The base case is our central assessment, conditional on the triggers shown, not a point forecast.

October's −1.2% landed at the steeper end of the base range we set out a month ago (−0.7% to −1.2%). CommBank's 14% national peak-to-trough call implies a further fall of about 7.8% on Cotality's index from here (our arithmetic); at October's pace that would take around seven more months. CBA expects prices to stabilise in the second half of 2027, and our companion price forecast scorecard compares the bank and industry calls.

Dated signals to watch: Cotality's weekly final clearance rates (every Thursday); the big four's repricing on 13 November; Cotality's November chart pack (mid-November); ABS Labour Force for October (19 November); the monthly CPI for October (25 November); Cotality's November index (1 December); and the RBA's decision on 8 December.

What would change the base case: two monthly falls under 0.5% that survive revision, with finals back above 50% (bull; our rule of thumb, not a Cotality benchmark), or rising unemployment and arrears turning a demand-led correction into a distressed one (bear).

What Does the October HVI Mean for Investors?

Tax settings depend on the asset, the owner and the date. Under the enacted Treasury Laws Amendment (Tax Reform No. 1) Act 2026:

• Negative gearing. From 1 July 2027, losses on established dwellings acquired (generally, contracted) after 7:30pm ACT time on 12 May 2026 are quarantined: they offset residential rental income and, under the Act's ordering rules, residential capital gains, with the balance carried forward rather than lost. Earlier acquisitions keep existing treatment while held. Complying super funds, widely held unit trusts and eligible new dwellings are outside the quarantine.
• CGT. The 12 May grandfathering doesn't apply here. Most property held by resident individuals and trusts is deemed sold and reacquired at market value on 30 June 2027; the gain to that date is deferred to the real sale and keeps the 50% discount, while later growth is taxed on a CPI-indexed base with a 30% minimum tax. Eligible new dwellings keep the discount on later growth.

Our CGT countdown guide and grandfathering guide set out the mechanics; get personal tax advice before acting.

Illustrative investor profiles; situations are hypothetical.

We update the Cotality Home Value Index tracker on release day.

The Bottom Line

Compared with the September 2026 edition of the Cotality Home Value Index, two things changed: Brisbane and Perth overtook Sydney as the fastest-falling capitals, and revisions again made the mid-sized capitals weaker than first reported.

The evidence is still consistent with a demand-led fall rather than forced selling, though arrears data, not the index, would show a shift. Recent buyers with small deposits are the exposed group, while long-term owners in the mid-sized capitals hold large buffers. The 3 November rate rise reaches repayments from 13 November, after this index was compiled.

A floor would show first in clearance rates and sales volumes, and neither has turned yet.