Dwelling price growth was already easing ahead of the Federal budget and has continued to slow, with national dwelling prices flat in May. This is the softest monthly outcome since late 2024.
05 June 2026
05.06.2026
Key Points
- Dwelling price growth was already easing ahead of the Federal budget and has continued to slow, with national dwelling prices flat in May. This is the softest monthly outcome since late 2024.
- The slowdown has been most pronounced in Sydney and Melbourne, where prices fell 0.9% and 0.8% mom, respectively. Growth in mid-sized capitals has also moderated but remains strong on a 3m annualised basis.
- Reforms to CGT and negative gearing that reduce incentives for low yielding/high debt investment in established property and come against a backdrop of higher interest rates and elevated uncertainty which had seen the beginnings of a downturn in house prices. A more pronounced cycle is now likely.
- We have revised our housing price forecasts. We expect prices in the 8 capitals to fall 2% this year, driven by 6-7% falls in Sydney and Melbourne and material slowing in mid-sized capitals.
- The rental market remains tight, with vacancy rates near record lows at 1.7%. Advertised rents growth remains elevated at 5.9% yoy.
- Dwelling starts have lifted since late 2023, led by apartments, but starts continue to outpace completions amid challenging supply conditions. This has kept the construction pipeline elevated, with ~235k dwellings still under construction, around 35% above the pre-pandemic (2010-2019) average.
Further detail can be found in the full report.
