Why a vacuum at the top could drive Australia's housing market down
SBS News
β’Sun, 13 Sep 2026 19:37:47 +0000
π° What Happened
New data from property firm Cotality shows high-end home prices are falling faster than cheaper ones. In Sydney and Melbourne, the top 25 per cent of houses have dropped more than 10 per cent from their peak.
Cheaper homes have only fallen about 3.9 to 5.4 per cent. This month a Balmain East mansion sold for $12.8 million after selling for almost $20 million in 2022.
Experts say the top of the market usually moves first in a property cycle. Cotality research director Tim Lawless said the upper end peaked in October or November last year.
π The Backstory
Rising interest rates are squeezing buyers. Borrowing costs are hovering around 9.5 per cent, which cuts how much people can borrow.
A household on a middle income now spends more than half its pre-tax pay to cover an average mortgage. Buyers who once looked at mid-range homes are being pushed towards cheaper ones.
Auction numbers are down 31.1 per cent on last year. Politicians are arguing about the cause. The opposition blames tax changes; the Treasurer blames high debt and interest rates.
π― Why It Matters
Falling prices help first home buyers, but they also mean less work for builders and lower wealth for owners. The rest of the market may follow the top end down.
New data from property firm Cotality shows high-end home prices are falling faster than cheaper ones. In Sydney and Melbourne, the top 25 per cent of houses have dropped more than 10 per cent from their peak.
Cheaper homes have only fallen about 3.9 to 5.4 per cent. This month a Balmain East mansion sold for $12.8 million after selling for almost $20 million in 2022.
Experts say the top of the market usually moves first in a property cycle. Cotality research director Tim Lawless said the upper end peaked in October or November last year.
Rising interest rates are squeezing buyers. Borrowing costs are hovering around 9.5 per cent, which cuts how much people can borrow.
A household on a middle income now spends more than half its pre-tax pay to cover an average mortgage. Buyers who once looked at mid-range homes are being pushed towards cheaper ones.
Auction numbers are down 31.1 per cent on last year. Politicians are arguing about the cause. The opposition blames tax changes; the Treasurer blames high debt and interest rates.
Falling prices help first home buyers, but they also mean less work for builders and lower wealth for owners. The rest of the market may follow the top end down.