r/AusMoneyMates • u/Diligent-Medicine-48 • 15d ago
Australian house prices have fallen for six months in a row
https://www.abc.net.au/news/2026-10-01/australian-house-prices-fall-for-sixth-straight-month/107206782House prices dropped another 1.1% in September, bringing the total decline to 5.2% from the March peak. Sydney fell 1.4% and Melbourne 0.7%, while experts are warning that further falls could follow as higher interest rates continue to affect borrowing capacity. Is this finally making Australian housing more affordable, or is it creating a different set of problems for homeowners and the economy?
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u/McTerra2 15d ago edited 15d ago
Why are people freaking out / spending so much time about these falls, they are still less than the drop in 2019 and 2022 (both 8% declines) and no one cared so much back then.
Yes this time it may go slightly further but it hasn’t yet.
I get that prices are higher now and 8% is more in dollar terms today than back then , but it’s not as if this hasn’t happened before, twice, in the past 7 years.
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u/T_J_Munster 15d ago
Because not everyone was in on it yet!
Regional areas, small towns with no work, Townsville in qld, Geraldton in the west, there is no bargains left. Everyone is in on the game.For some reason everyone thinks house prices have always gone up 5 percent a year forever!
Anyways… everyone is in so now everyone is talking about it
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u/BareNecessities09 15d ago
Nah that isn’t the reason.
House prices fell during the international world wide COVID pandemic which disrupted….well…everything. That was an uncontrollable event that impacted everyone.
Housing prices are falling now because of government policy.
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u/McTerra2 15d ago
2019 and 2023 were not covid years. Prices in Australia rose during Covid.
You could argue 2023 was a response to the insane COVID price rises in some locations (regional) but not overall
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u/BareNecessities09 14d ago
“Covid 19” wonder what the 19 is for?
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u/McTerra2 14d ago
Is your memory really that short? Lockdown started in Australia March 2020.
House prices fell in 2019.
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u/BareNecessities09 14d ago
So Covid did start in 2019? Just checking cause before you said 2019 wasn’t a Covid year….even tho it was literally named coronavirus 19.
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u/Interesting-Cut6994 15d ago
But if it’s not post/reported about it won’t get ad revenue. And if you do post about it people may start buying houses because they may think they’ll go up again which increases prices again.
Won’t anybody think of the media corporations bottom line and the property investors equity!?!? /S
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u/NegotiationLife2915 14d ago
Lol I know right. My property on real estate currently reads Down 4% last month, up 160% for 10 years. It's still wildly over valued
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u/hypercomms2001 14d ago
Good, it should fall enough so that young people can afford to buy their own home... As I was...
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u/NeonsTheory 14d ago
Budget gets all the talk and investor expectations matter but... So far the anti money laundering changes are the only official things to have gone through. I don't see talk on the latter
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u/Vast_Dare8583 15d ago
It isn't good news, and it creates a new set of problems. People will default because the cost of living has gone up so has their mortgage on the house they bought that isn't now worth what they paid for it.
I get it, everyone wants to buy a house but when you bring all these factors together to flow on effect may not necessarily mean people can afford to buy homes.
Banks still need to have enough money to loan, and guess what happens if people start defaulting.
Dropping house prices isn't the answer.
Increasing productivity and wages and keeping house prices and interest rates stable is better for Australia.
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u/McTerra2 15d ago
House prices do not make mortgages less affordable, nor does negative equity.
The RBA estimates that if house prices drop 20%, then up to 5% if house owners will be in negative equity. That doesn’t mean they cannot afford the loan. So realistically a 20% drop may badly affect perhaps 1-2% of owners who also cannot afford their mortgage or who have to sell.
Yes, a 10% drop and stability for 5 years is a better outcome than a 20% drop today.
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u/Over_Tha_Rainbow 15d ago
People default when cost of living and interest rates go up and they can no longer afford the loan. The person you’re replying to literally said that in their opening paragraph.
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u/Stonp 14d ago
True but very exaggerated. If you got your $700k loan on 5.5%, the bank factored in you can pay 8.5% on $700k. 3 rate hikes aren’t going to impact households in the way you think.
The people are affected is anyone that went fixed on 2.2% in 2021, but those fixed rates have been long-gone for a while now so they’re back on 5.5% fixed rates already, and they can refinance to a new 30 year mortgage if required.
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u/tttommyyttt 12d ago
If they can afford to… the banks new factored interest affordability will now be 9% not the original 5.2 % on their 2.2% mortgage, and knowing rates will continue to rise, they will factor that in as well
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u/Stonp 12d ago
But they will have been 5 years into their mortgage repayments. Refinancing to 30 years a $700k mortgage from 2021 will be around $46k off their principal not considering any extra payments or an offset account is quite feasible to refinance
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u/tttommyyttt 12d ago
You have a lot of ifs and buts in your statement, now consider the opposite scenario.. they now have a child or 2 and on similar wages plus childcare… no bank will touch them ..
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u/Stonp 14d ago
How has their mortgage gone up on the house they’ve bought? Their mortgage only ever gets paid down not increased
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u/Vast_Dare8583 14d ago
When Interest Rates increase people on variable rates have to pay more and not only that the worth of the asset has decreased so it's a double whammy.
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u/Stonp 14d ago
Yeah the repayments go up, but the mortgage doesn’t go up
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u/Vast_Dare8583 14d ago
I think you get the point. By degrees it goes up, even thought it's not in writing.
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u/Ok_Guarantee_3370 15d ago
I think house is like, it's a place, and when the price changes, for all the people who own and also for all the people who don't, the price has changed. And this changes things a lot. So seeing the price change, up or down, can cause some pretty significant changes. Stay aware.
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u/FantasticChemical161 15d ago
There is volatility, its all about Wall Street and the Dow Jones. Markets. Madoff
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u/Albeg2 15d ago
We need more panic. At this rate, this catastrophic loss to investors could set us back, 5, hell even 10 months!