Monthly Property News 10th Edition 2026

September property market report

Here’s your property market wrap on the results from September 2026. We’ll cover home prices, rents, the strongest performing regions, current auction conditions, and the market factors now shaping buyer, seller and investor sentiment.

September confirmed that Australia’s housing downturn is continuing to broaden. Cotality’s national Home Value Index fell 1.1% during the month, marking the sixth consecutive monthly decline. Higher interest rates, elevated living costs, reduced purchasing capacity and weaker consumer sentiment are all weighing on housing demand.

The weakness remains concentrated across the capital cities, where values fell 1.2% in September and 4.3% over the quarter. Regional markets continued to prove more resilient, although the combined regional index also declined 0.7% during the month and 1.9% over the quarter.

Metropolitan Melbourne

Melbourne dwelling values declined by 0.7% in September, taking the quarterly fall to 3.4%. Values are now 6.2% lower than a year ago, with the median dwelling value falling to $780,550.

Melbourne values are now 7.2% below their November 2025 cyclical high and 7.5% below the record peak reached in March 2022. The result highlights the extent to which higher borrowing costs, affordability constraints and weaker buyer confidence have affected the market.

Melbourne continues to offer relative affordability compared with several other capital cities. Its median dwelling value of $780,550 remains below Brisbane at $1,048,880, Perth at $975,022, Adelaide at $928,560, Canberra at $861,744 and Sydney at $1,198,596.

Regional Victoria

Regional Victoria continues to outperform metropolitan Melbourne on an annual basis, although values also weakened during September.

Dwelling values declined 0.3% during the month and 1.3% over the quarter, leaving the market 1.6% below its May 2026 peak. Despite the recent change in direction, regional Victorian values remain 3.6% higher than a year ago, with a median dwelling value of $634,360.

The contrast with metropolitan Melbourne remains significant. While Melbourne values have fallen 6.2% over the past year, regional Victoria has recorded growth of 3.6%, a difference of almost 10 percentage points.

Rental market

Rental conditions remain tight despite a gradual improvement in rental availability.

Australia’s national vacancy rate increased to 2.0% in September, up from the record low of 1.5% recorded in February. National rents increased by another 0.3% during September, the smallest monthly increase since May 2025. Rents are now 5.5% higher than a year ago and have increased by approximately $200 per week over the past five years.

Melbourne house rents increased 4.9% over the year, while unit rents rose 4.8%. Regional Victoria continues to offer a stronger overall income return, with a gross dwelling rental yield of 4.3%, including 4.2% for houses and 4.9% for units.

Around the Grounds

The strongest annual results across Melbourne continue to be concentrated in relatively affordable areas, only two of Melbourne’s five strongest SA3 markets recorded positive annual growth in September

Metropolitan Melbourne’s strongest markets

Regional Victoria continues to present a different picture, with several affordable markets recording double-digit annual growth. These regional figures reinforce the continued appeal of regional markets.

Regional Victoria’s strongest SA3 markets

Buyers have more choice this spring

One of the biggest changes in the current market is the balance between buyers and sellers. It is estimated that Australian home sales over the past three months were 19.1% lower than the same period last year. 

At the same time, advertised stock is accumulating. Across the combined capital cities, the number of newly listed properties was 9.2% lower than a year ago, but total advertised inventory was 23.1% higher.

Capital city homes are now taking a median of 39 days to sell, compared with just 23 days a year ago. 

Housing policy, economics, interest rates and confidence

The Reserve Bank lifted the cash rate to its highest level in 15 years this week. Higher mortgage rates will unfortunately reduce borrowing capacity for prospective buyers and add to repayment pressure for existing borrowers. Australian shares recorded their strongest session on 30 September since early August after lower than expected inflation was released which has eased concerns about another imminent interest rate increase.

Housing policy is also becoming an important issue ahead of Victoria’s state election. The Liberal and National Coalition has promised to restore the general land tax-free threshold from $50,000 to $300,000, increase the first home buyer stamp duty exemption from $600,000 to $1 million, and remove or reduce the Emergency Services Levy on primary residences.

If implemented, these policies could reduce holding costs for investors and homeowners, while supporting first home buyer activity. However, increased buyer demand without additional housing supply could also place upward pressure on prices.

Broader economic indicators remain mixed.  Anthropic’s reported US$42 billion net loss highlights the volatility surrounding global technology investment. Consumer behaviour is also changing rapidly, with an electric vehicle now sold in Australia every 100 seconds, increasing the importance of home charging, solar power and energy-efficient features for future property buyers.

Remember, the information provided is of a general nature only. You should always seek independent legal, financial, taxation or other advice based on your own circumstances.

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