Weekly Market Update (25 September 2026)

1. Is Australia’s Housing Market “Broken”? 40 Years of Data Say Otherwise (Source: Australian Property Update)
   Australia’s current housing-market divergence may look unusual, but 40 years of data suggest it is part of a recurring cycle. Research by Charter Keck Cramer identified 46 periods since the 1980s when one of Australia’s five largest capital-city markets moved at least 10% above or below its historical relationship with the others, with 39 of those dislocations — 85% — eventually recalibrating. Melbourne houses are currently around 17.1% below their historical relative value, Melbourne units 26.5% below and Sydney units 15.8% below, while Adelaide units stand out at 35.5% above their historical position. The research suggests market differences can correct through prices rising, falling, or a combination of both, and that current divergences remain within the range seen during previous cycles.
   
   

2. Blame the 20-Year Growth Cycle, Not the Government (Source: Property Update)
   Melbourne property has significantly underperformed over the past decade, with median house prices increasing by only around 1.8% annually since 2017 — below the roughly 3% average inflation rate over the same period. Property Update argues that the main explanation may be Melbourne’s unusually long preceding growth cycle rather than individual government policies. Between 1997 and 2016, Melbourne house prices rose for almost 20 years, far longer than the typical 8–11-year growth cycles seen in other capitals. The article estimates Melbourne houses are now around 21% below their long-term trend and apartments around 29% below, while factors including constrained supply, population growth and improving rental yields could influence the market going forward. 

3. 75% of Australian Buyers Willing to Cut Spending for a Home (Source: Australian Broker)
   Housing affordability pressures are influencing household spending decisions, with three in four Australian buyers surveyed saying they have already cut, or plan to cut, lifestyle spending to afford a home. The finding comes from Cotality’s Q2 2026 Consumer Sentiment Report, which surveyed recent and prospective buyers across Australia, New Zealand, the US, Canada and the UK. Australian respondents identified a median mortgage rate of 4.9% as the level that would encourage them to enter the market, compared with 4.5% across all five countries. Meanwhile, mortgage applications were down 14.1% year-on-year in August, marking the fifth consecutive monthly decline, while first-home-buyer applications fell 20%.

4. How Much Australian Property Is Overvalued by Now? (Source: The Age)
   New analysis from AMP chief economist Shane Oliver suggests Australian capital-city houses remain significantly above their long-term value relative to rents, despite recent price falls. Across the capitals, houses are estimated to be 38% above their historical rent-based valuation, with Brisbane at 61%, Sydney at 41%, Melbourne at 24% and Perth at 28%. Oliver stresses that the figures do not mean prices are necessarily set to fall by the same percentages; rather, the measure indicates that house prices remain high compared with the relationship between prices and rents observed over roughly four decades. Units generally appear less overvalued, with Melbourne units slightly below the historical benchmark.

5. Australia Is Wealthier Than Ever, So Why Are We Less Happy? (Source: Property Update)
   Australia has become substantially wealthier and living standards have improved, but the article argues that greater material prosperity has not translated into higher levels of happiness and life satisfaction for everyone. Younger Australians in particular face higher housing costs, delayed life milestones and greater financial pressure, while social media has intensified comparisons with peers and previous generations. The article highlights that wealth can provide security, freedom and choice, but additional income tends to have diminishing effects on happiness once basic financial needs are met. Housing is presented as particularly important because home ownership can provide not only shelter but also stability, control and a sense of permanence.

6. With Falls Accelerating, How Far Could Australia’s Property Market Drop? (Source: SBS News)
   Australia’s housing downturn has broadened, with national home values sitting 3.6% below their March 2026 peak and 93% of capital-city suburbs recording price declines by August. Sydney experienced the sharpest monthly fall among the capitals at 1.4%, while Darwin was the only capital to record an increase over the month. The downturn has prompted major institutions to revise their forecasts, with Commonwealth Bank estimating a potential 9% national decline from the March peak, while AMP expects around a 10% fall. Forecasts vary by city, with Sydney and Melbourne facing larger projected declines, highlighting the uncertainty around the depth and duration of the current correction.

7. Why Building More Homes May Not Make House Prices Cheaper (Source: Australian Property Update)
   Building more housing is important for population growth and rental supply, but new construction does not automatically translate into lower prices, according to housing and construction analyst Dr Robert Sobyra. His argument is that prices are primarily established in the much larger existing-home market, where buyers compete for properties currently listed for sale. New developments are generally viable only when expected selling prices cover land, construction, finance, tax and planning costs. As a result, falling established-home prices can actually make new projects less financially viable and lead to delayed or abandoned developments. The article notes that more supply can improve affordability over time, but its impact depends on the scale, location and conditions of the additional housing.

8. CoreLogic Auction Results (Week ending 20 September 2026)

        (Total Auction / Clearance Rate)
       – Sydney: 569/ 46.2%%
       – Melbourne: 918/ 54.3%
       – Brisbane: 176/31.4%
       – Perth: 10/50%
       – Canberra: 56/53.6%
       – Adelaide: 112/ 46.4%
       – Tasmania: NA/ NA
     Combined Capitals: 1841/49.1%