Domain House Price Report September Quarter 2026: House Prices Fall in Every Capital

Published 24 October 2026. Primary source: Domain House Price Report, September quarter 2026 (released 22 October 2026). Bank calls and market pricing are as at 21 to 23 October 2026; full data dates are in How We Read the Data.

Three months ago, Domain's June-quarter report still had five capitals rising, and Adelaide had just overtaken Melbourne on a record median. The September-quarter House Price Report, released on 22 October, shows house prices falling in every capital city, which Domain says is the first time in 15 years and only the second time on record. Combined-capital house prices fell 4.7% to $1,226,566, a second consecutive quarterly fall that Domain describes as national, and combined-capital unit prices fell 3.5% to $702,858. Domain's news coverage of the report went further: "Australian house prices have registered their steepest decline on record."

The cities that were still rising in June fell furthest. Perth houses dropped 7.4% to $1,115,227, the largest quarterly decline on Domain's record. Brisbane fell a record 5.4%, and Adelaide's 3.0% fall equals its steepest. Sydney (−4.7%) and Melbourne (−3.3%) had their sharpest quarters in four years.

The report lands a week before the ABS September CPI release (28 October) and twelve days before the Reserve Bank's 3 November decision, with the cash rate at 4.60%. With the downturn now in every capital, this analysis asks where repricing has gone furthest, what holding through it costs, and which data would show the falls slowing.

In one sentence (our read): Domain's dollar medians are consistent with a demand-led downturn that now covers every capital, with the sharpest falls in the former boom cities and distress still contained; how far it runs is likely to depend most on interest rates.

Source: Domain House Price Report, September quarter 2026 (22 October 2026), and June quarter 2026 report as first published for the June count; Cotality Home Value Index, all-dwellings series, quarter to 30 September 2026 (October 2026 release); NAB Residential Property Survey Q3 2026 (14 October 2026).

What Did Domain's September Quarter Report Show?

Source: Domain House Price Report, September quarter 2026 (22 October 2026). Medians are Domain's stratified medians; "below peak" figures and peak dates are as stated in Domain's city commentary.

Domain marks four records: Perth houses, Perth units, Brisbane houses, and Adelaide houses (a fall "on par with March 2009, the steepest on record"). On the type of fall: "While signs of distressed sales remain largely contained, weak buyer confidence has contributed to a sharp decline in housing market activity and prices."

How Does the September Quarter Compare With June?

In our June-quarter analysis of Domain's report, only Sydney, Melbourne and Canberra were falling and Adelaide was accelerating.

Source: Domain House Price Report, June quarter 2026 (as first published, July 2026) and September quarter 2026 (22 October 2026); swing is our arithmetic. Canberra's June figure was derived from Domain's published dollar fall. Darwin is excluded because its house series sits on a different base in the two releases.

The southern capitals held their pace. Melbourne and Canberra fell at almost June's rate, and Sydney's fall deepened by 1.4 points in a third consecutive decline.

The former boom cities reversed hard. Perth, Adelaide, Brisbane and Hobart produced the four largest swings. Domain now describes Perth as falling for two consecutive quarters from a March 2026 peak; on Domain's revised June median, Perth's June quarter was about −0.7% and its swing about 6.7 points (our arithmetic).

The price ladder has shifted. Melbourne houses now sit below Canberra as well as Adelaide, making Melbourne the sixth most expensive capital for houses; Adelaide's lead is $81,094 (8.0%), and Brisbane is second behind Sydney (our arithmetic on Domain's medians).

Why Did House Prices Fall in Every Capital at Once?

Interest rates. The Reserve Bank raised the cash rate for the fourth time this year on 29 September, to 4.60%. Cotality's October chart pack estimates the four rises have cut the borrowing capacity of a median-income household by about $90,000 (9%). Domain's June FY27 forecast assumed a 4.35% peak and warned that each further 25 basis points "would remove a further ~2.5% of borrowing capacity"; the September rise was that downside case.

Tax policy. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (Royal Assent 26 June 2026) has two separate property measures from 1 July 2027. Negative gearing: net rental losses are quarantined on established dwellings acquired after 7:30pm (by legal time in the ACT) on 12 May 2026; earlier holdings are grandfathered. CGT: for individuals and trusts, the 50% discount gives way to cost-base indexation and a 30% minimum tax. Qualifying assets held on 30 June 2027 are treated as sold and reacquired at market value just before 1 July 2027, subject to the Act's conditions, but nothing is taxed then. The gain to that date is deferred to the actual sale or other CGT event and keeps the 50% discount; only later growth falls under the new rules. Domain reports that "investors are pulling back in response to tax policy changes, higher borrowing costs and a softer price outlook." The Tax Reform No. 3 Bill (introduced 14 October; 30% minimum tax on discretionary trusts from 1 July 2028) is not yet law.

Confidence and choice. Cotality's October chart pack has capital-city homes taking a median 39 days to sell (23 a year ago), vendor discounts at 4.4% (a five-year high), and total listings 19.1% above a year earlier while September sales ran 20.9% lower.

Timing. Burg and property economist Cameron Kusher both told the ABC that prices peaked last year and had begun to fall before the May Budget. Domain's Sydney and Melbourne house peaks (December 2025) fit that timing; Cotality's national index peaked in March 2026.

Watch the labour market for signs of distress. ABS data show unemployment rose to 4.7% in September, and RBA Deputy Governor Andrew Hauser said "the inflation outlook looks materially worse than we projected in the August report" (RBA transcript, 21 October). Buffers are covered in our analysis of the RBA's October Financial Stability Review.

Perth, Brisbane and Adelaide: How Sharp Is the Reversal?

Perth. Houses fell $88,664 to a one-year low. Cotality's chart pack shows listings up 64.7% on a year earlier and selling times up from 11 to 26 days.

Brisbane. Houses fell $66,001, and houses and units fell together for the first time in 6.5 years. Cotality reports listings up 60.4% and days on market up from 17 to 38.

Adelaide. Houses fell $33,967, ending a 13-quarter run, and units fell 3.8%, the sharpest since 2018.

SQM Research put September vacancy at 0.6% in Perth and Adelaide and 0.9% in Brisbane (the series is on our vacancy rate tracker). Tight rental conditions like these may support rental income; they do not establish an owner's capacity to meet mortgage and holding costs. Gross house yields in the three cities are 3.4% to 3.9% (Cotality HVI, houses series, gross yield, September 2026, October release), and Cotality notes that opportunities for neutral to positive cash flow "remain low" given holding costs. We read the reversal as a repricing of growth expectations while rental demand holds up.

Domain's own FY27 forecast (June 2026) shows how far the outlook has moved:

Source: Domain FY27 Housing Market Forecast (June 2026; assumed 4.35% rate peak); Domain House Price Report, September quarter 2026. Last column: our approximate arithmetic from Domain's current June 2026 medians (Domain's forecast base differs).

Sydney, Melbourne and Canberra: Three Quarters Into the Downturn

Sydney. The September fall of $82,420 took the median to $1,661,167. Domain cites "rising stock levels, weaker auction clearance rates, longer selling times and increased discounting". Cotality data reported by the ABC show Sydney's most valuable quartile fell more than twice as much as its least valuable over the three months to September.

Melbourne. Houses fell $34,192 to a more-than-five-year low. Domain's June forecast said Melbourne's median could fall below $1 million for the first time since 2021; one more quarter at September's pace would take it there. Units fell faster than houses (−3.7%) to a 3.5-year low, 7.0% below their December 2021 peak.

Canberra. Houses fell 2.6% to $1,025,084; units fell 4.2%, the largest unit fall in 6.5 years.

Against Domain's June dollar forecasts for all of FY27, Sydney's one-quarter fall of $82,420 already sits inside its $52,000 to $122,000 range, and the combined-capital fall of $59,870 is almost double the "modest downside risk of up to $32,000" Domain set for the year.

Are Units Still More Resilient Than Houses?

Domain attributes the relative resilience of units to affordability; the capital-city house premium over units narrowed from 76.7% to 74.5% in the quarter (our arithmetic on Domain's medians). In all three exceptions SQM recorded unit asking rents falling over the 30 days to 12 October (Melbourne −1.3%, Adelaide −1.9%, Canberra −1.5%), so a Melbourne unit purchase is now exposed on both capital and income. Our September SQM analysis sets out the rent scenarios.

Regional unit samples are thin, so the mix of sales can move one quarter's regional figure.

Cotality's gross yields of 4.4% for Sydney units and 5.2% for Melbourne units, against 3.0% and 3.5% for houses (Cotality HVI houses and units series, gross yield, September 2026, October release), explain why some investors still favour units there; our units versus houses guide covers the resale and strata risks that offset the yield.

Why Are Domain's Numbers Different From Cotality's?

Stratifying sorts sales into groups before the medians are combined, which reduces (without removing) the effect of an unusual mix of sales. The table uses Cotality's houses series. Cotality's headline all-dwellings series, houses and units together, had the combined capitals down 4.3% and Sydney 4.9%; it is a different measure, so figures quoted in media coverage of Cotality's release may not match the table.

Source: Domain House Price Report, September quarter 2026 (22 October 2026); Cotality Home Value Index, houses series, quarter to 30 September 2026 (October 2026 release). Gap is our arithmetic.

Our reading: where Domain fell further (Perth, Hobart, Darwin), one explanation consistent with both series is that fewer high-end homes sold this quarter, which pulls a median down more than an index.

What Happens Next, and What Would Change This Read?

What agents expect

NAB's Q3 Residential Property Survey (14 October) recorded its index falling 18 points to −4, negative for the first time in six years. By state, against Domain's realised falls:

Source: NAB Residential Property Survey Q3 2026 (14 October 2026), around 228 respondents; Domain House Price Report, September quarter 2026. NAB figures are state-wide survey expectations, not NAB forecasts; small-state samples are thin.

NAB respondents saying their market is "approaching the bottom" rose to 13% from 4%, though 53% still describe it as declining. Western Australian respondents expect the smallest fall of the mainland states despite Perth's record quarter.

What forecasters expect

Peak-to-trough calls use different geographies and measures, so only some can be set against the fall so far on Cotality's national index:

Source: CBA and AMP as linked, with AMP's 10% to 15% range via Mortgage Professional Australia (1 October); ANZ via Capital Brief (11 August); HSBC via savings.com.au (8 September); Cotality HVI, national all-dwellings series, 5.2% below peak (October 2026 release). Last column: our illustrative calculation, (1 − forecast) ÷ 0.948 − 1.

CBA's and AMP's calls therefore imply roughly 4% to 10% further on Cotality's national index. That is our illustrative calculation from two comparable forecasts, not a consensus; CBA's predates the 29 September rate rise. Our house price forecast review compares the full set.

The rate decision

Westpac, ANZ and, since 21 October, Goldman Sachs (Newsquawk) expect a rise to 4.85% on 3 November. CBA reaffirmed its hold call on 23 October while warning the risks are building (CommBank newsroom); NAB and AMP had hold base cases as at early October. Market pricing reported by the ABC on 21 October, from Bloomberg data, implied a 51% chance of a November rise.

Source: our scenarios, built on the data in this article and bank calls as at 21 to 23 October 2026; they are not forecasts.

What would change this read

Our central view is a broad, demand-led downturn with further falls into 2027 and no wave of forced selling. We would revise it if:

• Cotality's October and November results show these together: monthly declines narrowing in Sydney and Melbourne, sales volumes improving relative to new listings, days on market stabilising, and final clearance rates firming. That would mean buyers are absorbing stock and the low is nearer than forecast.
• NAB's December-quarter survey shows the "approaching the bottom" share overtaking "declining".
• In the other direction, arrears or forced-sale listings rise materially, or unemployment reaches 5%, which would bring the upper end of the forecast range into play.

What Should Property Investors Do With This Report?

The five profiles below are hypothetical illustrations and general information, not personal advice.

Profile 1: The Perth or Brisbane holder thinking of selling

Situation: Bought a house in 2023 with a large paper gain and is now thinking of selling.

Reasoning: Annual growth is still positive, and negative gearing is grandfathered because the purchase predates 12 May 2026. The separate CGT transition under the Tax Reform No. 1 Act treats the house as sold and reacquired at market value just before 1 July 2027, but nothing is payable then. The gain to that date is deferred to the actual sale and keeps the 50% discount; only later growth is taxed under the new rules.

Strategy: There is no need to sell before July 2027 to keep the discount on gains to date. Compare the after-tax result of selling now with holding in the Sell or Hold Planner; our guide to the 1 July 2027 CGT changes has the mechanics and the valuation evidence to keep.

Profile 2: The Sydney buyer with pre-approval

Situation: Pre-approved in winter and watching medians fall.

Reasoning: Capital-city vendor discounts are at a five-year high (Cotality), and a rise on 3 November would cut borrowing capacity again.

Strategy: Ask the lender or broker whether the pre-approval would hold at a 4.85% cash rate (APRA expects serviceability to be assessed at least 3 percentage points above the loan rate), base bids on recent comparable sales, and walk away from vendors still pricing to peak.

Profile 3: The Melbourne value buyer

Situation: Wants an established house at a more-than-five-year low.

Reasoning: A purchase now falls after the 12 May 2026 cut-off, so from 1 July 2027 any net rental loss is quarantined: it can offset other residential rental income and later residential capital gains, but not salary.

Strategy: Buy only if the cash flow works without the salary deduction.

Profile 4: The unit investor in Melbourne or Canberra

Situation: Holds units in markets where units fell faster than houses.

Reasoning: Both are at multi-year lows, with unit asking rents softening (SQM).

Strategy: Stress-test the holding at zero rent growth and a longer vacancy. If it fails, the negative equity guide shows how to compare a sale with refinancing.

Profile 5: The first-time investor waiting for the bottom

Situation: Has a deposit and wants to time entry.

Reasoning: Few of NAB's respondents think their market is near the bottom, and on our illustrative calculation CBA's and AMP's forecasts leave roughly 4% to 10% to fall.

Strategy: Set entry triggers in advance: two months of narrowing falls on Cotality's index, rising clearance rates on Cotality's final series, and a rate decision that removes the next hike.

Source: Domain House Price Report, September quarter 2026; the conditions are our analysis, not Domain's, and are general rather than personal advice.

The Bottom Line

The largest swings in Domain's September quarter came from Perth, Brisbane and Adelaide, the cities still rising in June, while Sydney and Melbourne are three quarters into their falls. Units are falling more slowly than houses on the combined figure, but not in Melbourne, Adelaide, Canberra or the regions.

For investors, the June quarter's two-speed market has gone and distress is still contained. Holding decisions rest on cash flow and the enacted tax rules; buying decisions rest on comparable sales and a higher rate assumption.

What to monitor: CPI on 28 October, the RBA on 3 November, the Labour Force release on 19 November, and whether Cotality's October (2 November) and November results show narrower falls with steadier selling times and firmer final clearance rates. Domain's December-quarter report in late January will show whether the southern capitals, which turned first, are also the first to slow.

How We Read the Data

Domain's method. Domain's capital-city figures are stratified medians of house and unit sales recorded in each quarter; other geographies use a middle sale price. Quarterly and annual changes are Domain's. Domain revises earlier quarters as late sales are recorded, so June-quarter changes here are labelled "as first published" where they come from the June release. Darwin's house series sits on a different base in the June and September releases, so Darwin comparisons use the September release only.

Cotality series. City house and unit comparisons use the houses and units series of Cotality's Home Value Index; national and "below peak" figures use its all-dwellings series. The two are different measures and are labelled where used.

Our arithmetic. Swings, rankings, the house-unit premium, the Domain-versus-Cotality gaps, the FY27 growth-needed column and the remaining-fall calculation are our calculations from the published figures.

Data as at. Domain: September quarter 2026, released 22 October 2026. Cotality: Home Value Index, October 2026 release (results to 30 September 2026). NAB: Q3 2026, released 14 October. SQM: September 2026, released 13 October. ABS unemployment: September 2026. Price forecasts: CBA 1 September 2026, AMP 1 September and about 1 October, ANZ 11 August, HSBC early September. Rate calls: CBA 23 October 2026; Westpac, ANZ and Goldman Sachs as published to 21 October; NAB and AMP as at early October. Market pricing: 21 October 2026 (Bloomberg data, as reported by the ABC). Tax law: the Tax Reform No. 1 Act as enacted on 26 June 2026.