Australian property market update for August 2026

Australia’s property market continues to adjust to higher interest rates, affordability pressures, and ongoing economic uncertainty. These factors are shaping conditions for buyers and homeowners alike.

In many areas, conditions are becoming more favourable for buyers. Home values have eased, properties are taking longer to sell, and auction activity is subdued, giving buyers more room to negotiate.

A recent KPMG report forecasts a 1.1% decline in national house prices before a projected recovery in 2027. Housing conditions may remain subdued through the rest of 2026. Unit markets look more resilient, with prices expected to continue rising over the next two years.

Property investors are also navigating a changing regulatory landscape. From 10 August, changes to SMSF borrowing rules add a third clause to the definition of an acquirable asset. Going forward, only property that meets the definition of business real property can be financed through a loan within an SMSF.

Existing arrangements on contracts signed prior to 10 August 2026 remain grandfathered. There is some uncertainty, however, about how many lenders and loan products will stay in this space once the changes take effect. Residential property can still be purchased outright using cash reserves of the SMSF only.

For those looking to buy this spring, having your finance in order is paramount. Chat to us now about organising pre-approval on your home loan. That way, you’ll be ready to jump in when you find your dream home or investment property.

Interest rate news

As widely expected, the RBA has left the cash rate on hold at 4.35% at its latest meeting.

Australia’s annual headline inflation rose 3.8% in the 12 months to June, down from 4% in the 12 months to May. Underlying inflation held steady at 3.6%.

The softer-than-expected inflation data has many economists suggesting the cash rate may have peaked. Several now expect the RBA to leave the rate unchanged for the remainder of 2026, though the timing and direction of the next move remain uncertain.

If you’ve been with the same lender for some time, a home loan review can help you assess whether your current loan still aligns with your circumstances and objectives.

ASIC has also recently highlighted offset account errors affecting some borrowers. You can check whether your offset account links correctly in a few ways, depending on your lender:

• Via your banking app or internet banking
• Via your statements, checking whether your offset balance reduces the amount used to calculate interest
• By contacting your financial institution directly

If you’re unsure, your broker can help confirm the account operates as intended.

Get in touch if you’d like to review your current loan structure. The next cash rate decision is due on 29 September.

Home value movements

Australia’s property prices fell 0.7% in July, the sharpest monthly decline since December 2022, according to Cotality.

Sydney and Melbourne continue to lead the falls, with prices dropping 1.4% and 1.2% respectively last month. The downturn has spread to previously resilient capitals too. Brisbane dropped 0.6% and Adelaide fell 0.2% in July.

“There’s been a really rapid deterioration in conditions in Brisbane, which I think has probably been the most surprising trend that we’ve seen over the last couple of months,” Cotality’s head of research Gerard Burg said.

“The shift is really evident in the total stock available for sale [in Brisbane]. Going back to February, it was around 25 per cent below the five-year average. It’s now sitting up around 6 per cent above that average level.”

Mr Burg said property values would likely continue softening across the country. He also expected more vendors to pull back from the market.

“When vendors look out at the market, they are seeing these challenging conditions and they’re probably thinking that they’ve missed the opportunity to sell at the market peak,” he said. “If they have that choice to wait, they’re going to wait for the next cycle, once conditions improve, to put their home on the market.”

Regional markets also saw prices fall 0.2% in July, the first decline in Cotality’s Combined Regional Index since January 2023.

Home Value Index

Monthly home values figures as of 31 July 2026. Australian auction results, clearance rates, and recent sales for the week ending 9 August 2026. The clearance rate is preliminary and current as of 8:30am AEST on 10 August 2026.

Ready to buy?

Market conditions continue to evolve. Buyers who are prepared and ready to act could be well positioned when the right opportunity comes along.

The spring buying season is fast approaching, and this year motivated sellers are likely to be out in force. Reviewing your finance options beforehand helps you understand your borrowing capacity and move quickly when the right property appears. Get in touch to discuss your finance needs.