Property News
Australian home values have now fallen for seven months in a row, and the latest data shows the pain shifting towards markets that were the strongest performers of the past two years. According to figures released on 1 November and reported by Bloomberg, Brisbane recorded the sharpest capital city decline in October at 2.0 per cent, ahead of Perth at 1.7 per cent, Sydney at 1.6 per cent and Adelaide at 1.2 per cent.
The release lands two days before the Reserve Bank Board meets on Melbourne Cup Day, with financial markets and the major banks expecting a further 0.25 percentage point rise in the cash rate from 4.60 per cent. For borrowers anywhere in the country, the combination of rising rates and falling values matters for three things: equity, refinancing options and borrowing power.
Bloomberg's report on the Cotality figures puts the combined capital city index down 1.4 per cent in October and 8.1 per cent lower over the past seven months. Other coverage of the release has the national index down about 1.2 per cent for the month, which would leave national values roughly 6.7 per cent below the March 2026 peak. The two measures cover different geographies, so the headline numbers differ, but the direction is the same and the monthly pace of decline has been accelerating since mid-year.
For comparison, Cotality's September index showed a 1.1 per cent national fall, with values 5.2 per cent below peak and 97 per cent of capital city suburbs recording declines over the quarter. The October result is a larger monthly fall than September and extends the longest run of consecutive declines since the 2022 to 2023 correction.
| Market | October 2026 change | What stands out |
|---|---|---|
| Brisbane | -2.0% | Sharpest capital city fall for the month |
| Perth | -1.7% | Previously among the strongest markets, now correcting |
| Sydney | -1.6% | Extends the slide from the February peak |
| Adelaide | -1.2% | Lowest of the four reported capitals, but still negative |
| Combined capitals | -1.4% | Down 8.1% over seven months |
Sources: Bloomberg reporting of Cotality Home Value Index, 1 November 2026. Figures are preliminary and should be checked against the full Cotality release.
Through 2024 and 2025, Brisbane, Perth and Adelaide delivered the strongest growth in the country as buyers moved to cheaper markets and interstate migration supported demand. That strength meant these cities entered 2026 with higher entry prices relative to incomes. When the RBA lifted the cash rate four times this year, the cities with the least affordability buffer reacted fastest.
Perth is the clearest example. Reports on the September data still showed Perth values around 10 per cent higher than a year earlier, which means many owners remain well ahead on paper. But the pace of monthly decline has picked up, and buyers who purchased in the last six to nine months at or near peak pricing are the group most exposed.
The fall is not uniform within cities. Higher priced homes have generally fallen faster than entry-level properties, and units in some markets have held up better than houses. A national average hides wide differences by suburb, price point and property type.
The main mortgage consequence of a price fall is a higher loan to value ratio, or LVR. Lenders price and assess loans largely on LVR, so a change in your property's value can affect the rate you can access and whether you can borrow additional funds. The table below shows the effect of a 6.7 per cent fall on a property purchased at peak for $800,000.
| Original loan | LVR at purchase | Value after 6.7% fall | LVR now (before principal paid) |
|---|---|---|---|
| $640,000 | 80% | $746,400 | 85.7% |
| $720,000 | 90% | $746,400 | 96.5% |
| $760,000 | 95% | $746,400 | 101.8% |
These are illustrative figures only and do not account for principal repaid or any offset balance. They show why recent buyers with small deposits are the most sensitive to a downturn. A borrower who started at 80 per cent and has lost the 80 per cent threshold may find that a lender will not offer its best refinance rate, while a borrower above 100 per cent has negative equity on paper.
Banks assess new loans at a serviceability buffer above the actual rate, so each cash rate rise cuts the amount a household can borrow. Combined with falling values, that squeezes buyers from two directions: a lower maximum loan and a lower price at which sellers are willing to transact. Buyers with strong deposits and stable income are gaining negotiating power. Buyers who depend on a high LVR are finding fewer lenders willing to proceed.
The RBA's decision on 3 November will shape the next few months. A further rise to 4.85 per cent would push variable rates higher again, and our earlier analysis showed how repayments change on a $700,000 loan. The more useful step is to understand where your own loan sits now.
Compare up to three loan structures side by side. P&I vs I/O, fixed vs variable, any combination.
Sources: Cotality Home Value Index (September and October 2026 releases) as reported by Bloomberg and other outlets, Reserve Bank of Australia, and bank economist forecasts. October figures were published on 1 November 2026 and may be revised.
Yes, but the lender will use a fresh valuation, and a lower value raises your loan to value ratio. If your LVR stays at or below 80 per cent you can usually access the sharpest rates. Between 80 and 90 per cent, many lenders will still refinance but may charge a higher rate or require lenders mortgage insurance on any new borrowing. Above 90 per cent, options narrow and a broker can help identify which lenders still assess the loan favourably.
Falling values give buyers more negotiating power and less competition, but borrowing capacity is also tighter after four RBA rises this year. The question is less about timing the bottom and more about whether you can comfortably service the loan if rates rise again and whether you plan to hold the property for at least five to seven years. A pre-approval assessed at today's buffers will show what you can really borrow.
Negative equity only matters if you need to sell or refinance. If you can keep meeting repayments, the shortfall is a paper loss that recovers as values rise. Problems arise if repayments become unaffordable. If you are concerned, speak to your lender early about hardship options and talk to a broker about whether a restructure, such as extending the term or moving to a lower rate, can ease pressure.
Disclaimer: This article is general information only and does not constitute financial, mortgage, or credit advice. Property values and rate forecasts are estimates and may not occur. Before changing your loan structure, refinancing, or buying, speak with a qualified mortgage broker or financial adviser who can assess your situation. Mankin Finance Pty Ltd holds Australian Credit Licence 389087.
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