Australian house prices drop for sixth straight month and more falls expected

A wide shot of dozens of houses in a built-up suburb with cars travelling on a road. — Cotality’s Home Value Index fell 1.1 per cent in September taking cumulative declines to 5.2 per cent below March’s peak. (ABC News: Declan Bowring)

In short:

Cotality’s Home Value Index dropped 1.1 per cent in September.

All capital cities except Darwin recorded a drop in September.

What’s next?

Experts warn the property market could experience peak-to-trough falls of up to 15 per cent nationally.

Australian house prices fell for a sixth straight month in September, and experts say the property market could experience falls of up to 15 per cent in the coming months off the back of higher interest rates and cuts to housing tax breaks.

Cotality’s Home Value Index fell 1.1 per cent in September, taking cumulative declines to 5.2 per cent below March’s peak.

Brisbane saw the sharpest monthly drop among capitals (-1.5 per cent), while Sydney fell 1.4 per cent and Melbourne fell 0.7 per cent.

Darwin (+0.4 per cent) was the only housing market to avoid a fall.

Across the capitals, 97 per cent of suburbs recorded value declines over the past three months, which Cotality’s research director Tim Lawless said showed the broad-based scope of the negative housing cycle.

Tim Lawless sitting at a desk with a laptop. — Tim Lawless predicts house values will continue to fall into 2027. (ABC News)

Mr Lawless predicted housing values would continue falling into 2027 because of higher rates.

“I think a 10 per cent to 15 per cent drop is probably a fairly reasonable estimate at the moment,”

he said.

“It really depends on how far do interest rates rise and when do we actually start to see the RBA moving into a more dovish period where rate cuts might be on the agenda.”

Developer says more builders will go under

Mr Lawless is not the only expert predicting house price falls.

Queensland developer Soheil Abedian has built tens of thousands of homes and is behind luxury developments on the Gold Coast, including Australia’s tallest building, Q1, and the former Palazzo Versace resort.

Soheil Abedian sitting in an office. — Property developer Soheil Abedian is predicting further property price falls. (ABC News: Glenn Mullane)

He said the Middle East war, the federal government’s budget changes to negative gearing and the capital gains tax, plus interest rate hikes, would continue to dent property prices and could lead to more builders going under.

He said if interest rates continued to rise over the next six to 12 months, the construction sector would see more bankruptcies.

“You cannot do any development in Australia that is not bankable,” Mr Abedian told ABC News in an exclusive interview.