High‑end homes in Australia’s biggest markets are experiencing the steepest price falls, while more affordable properties remain comparatively resilient, new data shows. The downturn has hit the upper‑quartile of the market hardest, leaving buyers in Sydney and Melbourne to feel the impact most acutely.
According to analysis from Cotality, upper‑quartile house values in Sydney and Melbourne are now more than 10% below their peaks. The disparity between high‑ and low‑value housing is most pronounced in those two cities, whereas Perth, Adelaide and Brisbane recorded more even – and modest – price declines over the winter.
Cotality’s head of research, Gerard Burg, said the market correction has become more widespread, but the largest drops remain concentrated among expensive homes. “Higher‑value dwellings in Sydney, Melbourne and Canberra were the first to turn and continue to record the largest cumulative falls,” he added. In Sydney, upper‑quartile houses are valued at $2.1 million and above; in Melbourne and Canberra they are priced at about $1.2 million and above.
Australia’s property market is undergoing a rare price correction, driven by rising interest rates and less favourable tax settings for investors. National dwelling values fell 3.1% over the past three months, although price growth remained positive over a 12‑month period. High‑end homes tend to move more sharply because they are often viewed as speculative purchases driven by sentiment.
Despite the decline in luxury properties, buying activity has stayed robust at lower price ranges, especially for homes below the caps that allow first‑home buyers to access the government’s 5% deposit scheme. The cap in Sydney is $1.5 million, while first‑home buyers can use the scheme for homes up to $950,000 in Melbourne and $1 million in Brisbane. Lower‑quartile values in Sydney and Melbourne were down less than 6% and 4% from their peaks, respectively. While rising oil prices linked to the Iran conflict add pressure on interest rates, employment remains strong, and the single biggest risk to the overall housing market is unemployment, according to economist Peter Esho of 13x.
