August property market report
Here’s your property market wrap on the results from August 2026. We’ll cover home prices, rents, the strongest performing regions, current selling conditions, and the economic factors shaping buyer, seller and investor sentiment as we head into spring.
August confirmed that Australia’s housing downturn has broadened considerably. Cotality’s National Home Value Index fell 0.9% during the month, marking the fifth consecutive monthly decline and leaving national dwelling values 3.6% below their March 2026 peak.
The weakness remained concentrated across the capital cities, where dwelling values fell 1.1% in August and 3.7% over the past three months. Regional markets continued to prove more resilient, although the combined regional index also declined 0.4% for the month and 1.2% over the quarter. Despite the recent falls, regional dwelling values remain 7.7% higher than a year ago, compared with annual growth of just 1.1% across the combined capital cities.
Metropolitan Melbourne
Melbourne dwelling values declined by 1.1% in August, taking the quarterly fall to 3.9%. Values are now 4.7% lower than a year ago, with the median dwelling value falling to $786,718.
The latest decline leaves Melbourne values 6.8% below their March 2022 peak. Melbourne has now recorded a 6.3% decline through the first eight months of 2026, highlighting the extent to which higher borrowing costs, reduced household purchasing capacity and weaker buyer confidence are affecting the market.
While higher-value markets continue to experience greater pressure, lower-priced housing is becoming less insulated as affordability and serviceability constraints spread across a wider section of the market.
Melbourne houses recorded a larger fall than units during August, with house values down 1.4% for the month and 5.7% annually, while unit values declined 0.5% for the month and 2.5% over the year. The median Melbourne house value now sits at $920,432, compared with $629,054 for units.
Regional Victoria
Regional Victoria continues to outperform metropolitan Melbourne on an annual basis, although the market also weakened during August.
Dwelling values declined 0.5% during the month and 1.4% over the quarter, leaving the market 1.4% below its May 2026 peak. Despite the recent change in direction, regional Victorian dwelling values remain 4.6% higher than a year ago, with a median dwelling value of $633,907.
The contrast with metropolitan Melbourne remains significant. While Melbourne values have fallen 4.7% over the past year, regional Victoria has recorded 4.6% growth, a difference of more than nine percentage points.
Rental market
Rental conditions remain tight despite some improvement in rental availability.
National rents increased another 0.4% during August and are now 5.7% higher than a year ago, adding approximately $38 per week to the national median rental value over the past 12 months. Over five years, national rents have risen 39%, equivalent to around $200 extra per week.
Melbourne house rents increased 5.1% over the year, while unit rents rose 4.9%. Melbourne’s gross dwelling rental yield has increased to 4.0%, remaining above Sydney at 3.3% and Brisbane at 3.4%.
Regional Victoria continues to offer a stronger income return, with a gross dwelling rental yield of 4.3%, including 4.2% for houses and 4.9% for units. Falling property values combined with continued rental growth have pushed yields higher nationally, with the Australian gross dwelling yield now 3.8%, its highest level since September 2019.
Around the Grounds
The strongest annual growth across Melbourne continues to be concentrated in relatively affordable markets, particularly in the city’s north-west and outer south-east.
Metropolitan Melbourne’s strongest SA3 markets
Rank | SA3 market | Median dwelling value | Annual change |
|---|---|---|---|
1 | Sunbury | $725,708 | 2.7% |
2 | Brimbank | $712,104 | 1.5% |
3 | Maribyrnong | $673,786 | 1.1% |
4 | Casey South | $786,781 | 0.7% |
5 | Melton – Bacchus Marsh | $658,943 | 0.0% |
Regional Victoria continues to present a very different picture, with several affordable regional markets recording double-digit annual growth.
Regional Victoria’s strongest SA3 markets
Rank | SA3 market | Median dwelling value | Annual change |
|---|---|---|---|
1 | Latrobe Valley | $522,268 | 13.6% |
2 | Grampians | $395,119 | 12.5% |
3 | Glenelg – Southern Grampians | $457,001 | 11.2% |
4 | Mildura | $548,121 | 9.0% |
5 | Loddon – Elmore | $445,385 | 8.8% |
Ballarat followed closely with annual growth of 8.8%, Bendigo recorded 7.3% and Shepparton 7.1%, The figures reinforce the continued appeal of comparatively affordable regional markets, despite the broader slowdown now affecting Victorian housing.
Buyers have more choice heading into spring. One of the biggest changes in the current market is the balance between buyers and sellers.
Cotality estimates that Australian home sales are now tracking 15.5% below the same period last year and 11.5% below the five-year average. At the same time, homes are taking longer to sell and advertised stock is accumulating.
Across the capital cities, total advertised listings over the four weeks to 30 August were 24% higher than a year earlier and 8% above the five-year average. Importantly, this has occurred despite the number of newly listed properties being 6% lower than a year ago.
Auction clearance rates have remained below 50%, vendor discounting has increased and buyers generally have more properties from which to choose. As we enter the spring selling season, vendors will need to be particularly realistic about pricing, presentation and the competitive environment surrounding their property.
Interest rates, inflation and consumer confidence
The interest-rate outlook remains one of the most significant risks for housing as we move through spring.
Cotality notes that the latest inflation data came in higher than expected, increasing speculation that the Reserve Bank could lift the cash rate again in either September or November. A further increase would place additional pressure on borrowing capacity and existing mortgage repayments at a time when household budgets are already stretched.
There are still factors providing some support to property values. Unemployment remains comparatively low, new housing supply remains insufficient relative to underlying demand, and first home buyer initiatives including the 5% deposit scheme should continue to support activity at the more affordable end of the market.
However, with weaker transaction activity, above-average listings and the possibility of further interest-rate increases, the spring market is likely to favour well-prepared sellers who respond quickly to buyer feedback and price their property appropriately from the beginning.
For sellers considering a spring campaign, understanding the most recent comparable sales rather than relying on results achieved six or twelve months ago will be critical. Melbourne values have fallen 3.9% in only three months, meaning market conditions can change materially within a relatively short period.
The immediate outlook remains challenging. Another interest-rate rise would reduce borrowing capacity further and could extend the current downturn, particularly in Melbourne where values are already 6.8% below their previous peak.
For Melbourne in particular, the correction has also improved relative affordability compared with many other capital cities. Melbourne’s median dwelling value of $786,718 is now significantly below Brisbane at $1,080,142, Perth at $999,987, Adelaide at $937,207 and Sydney at $1,222,718.
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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