“July property market report”
Here’s your property market wrap on the results from July 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.
July marked a clear change in direction for Australia’s housing market, with the downturn becoming broader and gathering pace. Cotality’s national Home Value Index fell by 0.7% during the month.
The weakness was concentrated across the capital cities, where values declined by 0.9% in July and 2.5% over the quarter. Regional markets continued to outperform, but they were not immune, with the combined regional index falling by 0.2.
Metropolitan Melbourne
Melbourne recorded a 1.2% decline in dwelling values during July, taking the quarterly fall to 3.4%. Values are now 2.8% lower than a year earlier, with the median dwelling value falling to $797,354.
Melbourne dwelling values are now 5.5% below their March 2022 peak. While the city experienced a period of recovery through 2025, that cycle peaked in November and has since reversed as higher mortgage repayments, reduced borrowing capacity and weaker consumer confidence have weighed on demand.
The current downturn also remains weighted towards more expensive properties. Nationally, upper-quartile dwelling values fell by 3.2% over the three months to July, while values across the lower quartile increased by 0.3%. This highlights the continued importance of affordability, particularly in Melbourne, where buyers are becoming increasingly selective and borrowing limits are placing greater pressure on higher-value markets.
Regional Victoria
Regional Victoria continued to outperform Melbourne on an annual basis, although momentum also weakened during July. Dwelling values fell by 0.3% over the month and 0.4% over the quarter.
Regional Victoria is now 0.6% below its May 2026 peak. The annual figures remain comparatively strong, but the latest monthly and quarterly results suggest that affordability and serviceability pressures are beginning to affect regional buyers as well.
Rental market
Rental conditions remain tight despite some moderation in the pace of growth. House rents were up 5.2%, while unit rents increased by 4.9%. Melbourne’s gross dwelling rental yield rose to 4.0%, the highest among the major capital cities and above Sydney’s 3.3% and Brisbane’s 3.4%.
Regional Victoria recorded a gross dwelling yield of 4.2%, including 4.1% for houses and 4.8% for units. This continues to provide regional investors with a higher income return than the Melbourne market, although changing taxation settings and higher borrowing costs are likely to remain a constraint on investor demand.
Around the Grounds
The strongest annual growth continued to be concentrated across Melbourne’s more affordable outer areas. Sunbury and Brimbank led the city, while Casey, Melton and Bacchus Marsh also remained in positive territory.
Metropolitan Melbourne’s strongest SA3 markets
RankSA3 marketMedian dwelling valueAnnual change
1
Sunbury
$729,763
4.3%
2
Brimbank
$722,595
3.7%
3
Casey – South
$798,141
2.8%
4
Casey – North
$847,981
1.9%
5
Melton – Bacchus Marsh
$665,848
1.7%
The strongest annual growth continued to be concentrated across Melbourne’s more affordable outer areas. Sunbury and Brimbank led the city, while Casey, Melton and Bacchus Marsh also remained in positive territory.
Regional Victoria’s strongest SA3 markets
RankSA3 marketMedian dwelling valueAnnual change
1
Latrobe Valley
$518,889
14.1%
2
Grampians
$390,314
13.5%
3
Loddon – Elmore
$428,908
12.3%
4
Glenelg – Southern Grampians
$457,222
12.1%
5
Ballarat
$639,556
11.4%
The more important trend for sellers is the changing balance between supply and demand. Melbourne had 44,044 properties advertised for sale in June, 19.6% more than a year earlier. Buyers therefore have more choice, particularly across established and higher-value markets, and are less likely to compromise on price, presentation or property condition.
Interest rates, inflation and consumer confidence
The Reserve Bank left the cash rate unchanged at 4.35% in June after increasing rates by a cumulative 75 basis points during the first half of 2026. The RBA indicated that inflation remained too high but that holding rates steady would allow it to assess how the earlier increases were flowing through the economy.
Annual inflation eased to 3.8% in June, down from 4.0% in May, while trimmed mean inflation remained unchanged at 3.6%. Housing costs increased by 6.8% annually and remained the largest contributor to inflation. The figures reduce some of the immediate pressure for another rate increase, although inflation remains above the RBA’s target range and interest-rate relief is not yet assured.
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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