Australia's capital cities are not moving together. Over the year to September 2026, home values rose 11.9% in Darwin and 10.1% in Perth, and fell 7.0% in Sydney and 6.2% in Melbourne. Since March, though, most cities have been heading the same way: down. Cotality's index fell in every capital except Darwin in September, and national values are 5.2% below their March 2026 peak.
That split changes how to buy. Here is what the latest figures show, and how to plan a purchase around them.
What the Latest Figures Show
Cotality (formerly CoreLogic) publishes its Home Value Index on the first business day of each month. The table below is the September 2026 index, released on 1 October 2026.
| City | September | 3 months | 12 months | Median value |
|---|---|---|---|---|
| Darwin | +0.4% | +0.5% | +11.9% | $633,431 |
| Perth | −1.2% | −4.7% | +10.1% | $975,022 |
| Hobart | −0.5% | −1.2% | +7.0% | $741,496 |
| Adelaide | −1.3% | −2.7% | +6.5% | $928,560 |
| Brisbane | −1.5% | −4.7% | +5.9% | $1,048,880 |
| Canberra | −1.1% | −3.2% | −1.6% | $861,744 |
| Melbourne | −0.7% | −3.4% | −6.2% | $780,550 |
| Sydney | −1.4% | −4.9% | −7.0% | $1,198,596 |
| All capitals | −1.2% | −4.3% | −1.8% | $973,525 |
| Regional areas | −0.7% | −1.9% | +5.6% | $758,931 |
| National | −1.1% | −3.7% | 0.0% | $899,236 |
Change in dwelling values to 30 September 2026. The median value is Cotality's modelled value of all homes, not a median sale price. Source: Cotality Home Value Index, released 1 October 2026.
Three things stand out.
- The direction is down almost everywhere. 97% of capital city suburbs lost value over the three months to September. Sydney is 8.6% below its February 2026 peak, Perth 6.0% below its April peak and Brisbane 5.4% below its May peak.
- The yearly figures still split the country. Darwin, Perth, Hobart, Adelaide and Brisbane are higher than a year ago. Sydney, Melbourne and Canberra are lower.
- Homes are taking longer to sell. Capital city homes took a median of 39 days to sell, up from 23 days a year earlier. Listings on the market were 23.1% higher than a year ago, and sales over three months were 19.1% lower nationally.
Cotality puts the fall down to stretched affordability, higher interest rates, living costs and weaker buyer confidence. The cash rate has been 4.60% since 30 September 2026, after four rises this year.
Step 1: Match Your Strategy to Your City
Choose the market before the property. The same plan doesn't work in a city that is up 10% on the year and one that is down 7%.
Up on the year, falling now: Perth, Brisbane, Adelaide, Hobart
- Don't price a home off last year's growth. Values in Perth and Brisbane fell 4.7% over the three months to September.
- Compare sales from the last 90 days, not the 12-month median.
- More listings and longer selling times give you more room to negotiate than buyers had in early 2026.
- In Queensland, owner-occupiers who aren't first home buyers still get the home concession: 1% duty on the first $350,000, a saving of up to $7,175. Model the full upfront cost with the Brisbane stamp duty calculator.
- Investors pay land tax each year once their land holdings pass the state's threshold. Check it with the state revenue office before you buy.
Down on the year: Sydney, Melbourne, Canberra
- Buyers have more negotiating power. Ask how long the home has been listed and whether the price has been cut.
- Prioritise what keeps demand steady: transport, school zones, walkability. Before paying extra for a catchment, run the school zone or school fees calculator.
- Model prices staying flat for three years. If the numbers still work, proceed.
- Check the suburb's yield before you buy. Cotality puts Sydney's gross rental yield at 3.4%, the lowest of the capitals, so rent covers less of the holding cost there.
Darwin: the one capital still rising
- Darwin was the only capital to rise in September (+0.4%), and it leads on the year (+11.9%).
- It also has the highest gross rental yield of the capitals, at 6.5%.
- It is the smallest capital city market, so its figures can swing more from month to month. Check vacancy and selling times for the suburb.
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Step 2: Know What You Can Borrow at Today's Rate
Banks regulated by APRA must test whether you could repay your loan at your interest rate plus 3 percentage points. Lenders also set their own minimum test rate, but at today's rates the 3% buffer is what counts. If your rate is 6.5%, you are tested at 9.5%.
That test is why rate rises cut borrowing power. Four rises in 2026 took the cash rate from 3.60% to 4.60%, and lenders passed the September rise on in full from 8–9 October. If your lender passed on all four, your test rate is 1 percentage point higher than in January. On a 30-year loan, that cuts the most you can borrow by about 8%.
James earns $98,000 in Perth. In January 2026 his bank pre-approved him for $640,000. With the same income and expenses, the same bank would now lend him about $587,000. A pre-approval from before October 2026 is likely out of date, so ask your lender to redo it.
APRA also limits how much high-debt lending banks can do. Since 1 February 2026, no more than 20% of a bank's new owner-occupier loans, and separately its new investor loans, can go to borrowers whose debts are 6 or more times their income.
Example: Priya earns $120,000 as a software developer in Brisbane. She wants a $750,000 investment property with a 20% deposit, so she borrows $600,000 over 30 years. At a 6.5% loan rate, her bank tests the loan at 9.5%: a repayment of about $5,045 a month. Her actual repayment at 6.5% is about $3,792 a month. The $1,253 gap is the cushion the test builds in: rates would have to rise 3 percentage points before her repayment reached the tested amount.
Step 3: Understand Your LVR Before You Fall in Love With a Property
Your Loan-to-Value Ratio (LVR) is the percentage of the property's value you are borrowing. It determines whether you pay LMI, which lenders will offer the sharpest rates, and your buffer if prices move against you after purchase.
| LVR | What It Means |
|---|---|
| ≤60% | Best rates; no LMI; most lender choice |
| 61–80% | Good rates; no LMI required |
| 81–90% | LMI usually required; on a $500,000–$800,000 home, published estimates run from about $8,000 to $32,000 |
| >90% | Very few lenders; significantly higher LMI premiums |
Step 4: Structure the Purchase to Minimise Tax From Day One
How you buy is as important as what you buy. The structure you choose at settlement determines your tax position for the life of the investment.
| Structure | Best For | Key Consideration |
|---|---|---|
| Individual name | First-time investors, simplicity | Marginal tax rate applies to all rental income |
| Joint names (50/50) | Couples with income gap | Splits income between partners |
| Discretionary trust | Multiple properties, asset protection | Costs thousands to set up; ongoing accounting required |
| SMSF | Retirement strategy, long hold | 15% tax in accumulation; strict usage rules |
The Negative Gearing and CGT Changes
If you're buying an established home as an investment, the rules changed in 2026. For contracts signed after 7:30pm (AEST) on 12 May 2026, rental losses can only be offset against residential rental income or residential capital gains from 1 July 2027, not against your salary. From the same date, the 50% capital gains discount is replaced by indexation, with a minimum tax of 30% on the real gain; gains built up to 30 June 2027 keep the 50% discount. New builds are excluded from both changes. The law passed in June 2026. The negative gearing calculator and the CGT calculator show the effect on your numbers, and the 12 May contract rule explains which purchases are caught.
Stamp Duty Concessions for First Home Buyers
| State | First home buyer duty (October 2026) |
|---|---|
| NSW | No duty up to $800,000; concession to $1 million |
| VIC | No duty up to $600,000; concession to $750,000 |
| QLD | No duty on an established home up to $700,000 (concession to $800,000); no duty on a new home or vacant land at any price |
| WA | No duty up to $600,000; concession to $800,000 (contracts from 7 May 2026) |
| SA | No duty on a new home or vacant land at any price; no relief on an established home |
| TAS | The established-home exemption ended for settlements after 30 June 2026 |
| ACT | No duty for eligible buyers at any price, with no income test (from 1 July 2026) |
| NT | No concession on an established home; house-and-land packages bought from a builder are exempt for contracts to 30 June 2027 |
Checked October 2026 against each state's revenue office. Thresholds change, so confirm before you sign.
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Find My Investor Tax Deductions → Free · No account needed · ATO 2025–26 rulesStep 5: The Due Diligence Checklist Before You Sign
Before Making an Offer
- Building and pest inspection — use a licensed inspector, not one referred by the agent
- Strata report (for apartments) — look for outstanding levies and upcoming capital works
- Flood and bushfire risk maps — check your council's planning portal
- Comparable sales from the last 90 days — not 12 months; use recent data only
- Days on market and price reduction history — tells you how negotiable the vendor is
- Land tax obligations in your state (investors only)
After Offer Accepted, Before Exchange
- Section 32 / Vendor Statement reviewed by a conveyancer — not just yourself
- Finance clause allowing at least 14 days — never waive this
- Any pest issues discovered: renegotiate the price, do not just ask for repairs
An Australian guide to the buying process, from finance and inspections to contracts and settlement.
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Shop on Amazon AU →Frequently Asked Questions
Is 2026 a good time to buy property in Australia?
It depends on the city, and the direction has changed. Cotality's September 2026 index shows values falling that month in every capital except Darwin, and national values 5.2% below their March 2026 peak. Over 12 months the split is wide: Darwin up 11.9% and Perth up 10.1%, Sydney down 7.0% and Melbourne down 6.2%. Homes are also taking longer to sell, which gives buyers more room to negotiate.
How much have the 2026 rate rises cut borrowing power?
Four rises in 2026 took the cash rate from 3.60% to 4.60%, where it has been since 30 September 2026. Banks test your loan at your interest rate plus 3%, so if your lender passed on all four rises, your test rate is 1 percentage point higher than in January. On a 30-year loan that cuts the most you can borrow by about 8%: a $640,000 pre-approval from January 2026 would be about $587,000 now.
What is the APRA serviceability buffer and how does it affect my borrowing?
Banks must test whether you could still make repayments at your interest rate plus 3%. If your rate is 6.5%, they test you at 9.5%. Lenders also set their own minimum test rate, but at today's rates the 3% buffer is what counts. It lowers the most you can borrow, and it means you can cope if rates rise after you buy.
Do I need Lenders Mortgage Insurance (LMI) when buying property?
Usually, if you borrow more than 80% of the price, meaning your deposit is under 20%. On a $750,000 home with a 10% deposit, published estimates run from about $14,000 to $30,000, depending on the lender and insurer. First home buyers can avoid it with a 5% deposit through the Australian Government 5% Deposit Scheme (formerly the Home Guarantee Scheme; details at firsthomebuyers.gov.au).
What stamp duty concessions are available for first home buyers in 2026?
They vary by state. NSW: no duty up to $800,000, with a concession up to $1 million. Victoria: no duty up to $600,000, concession to $750,000. Queensland: no duty on an established home up to $700,000 (concession to $800,000), and none on a new home or vacant land at any price. WA: no duty up to $600,000, concession to $800,000, for contracts from 7 May 2026. SA: no duty on a new home or vacant land at any price. ACT: no duty for eligible buyers at any price from 1 July 2026. Check your state revenue office before you buy, as thresholds change.
Does the negative gearing change affect a property I buy now?
Yes, if it's an established home bought as an investment under a contract signed after 7:30pm (AEST) on 12 May 2026. From 1 July 2027, rental losses on it can only be offset against residential rental income or residential capital gains, not against your salary. New builds are excluded. The law passed in June 2026.
Should I wait for a bigger price correction before buying in 2026?
Prices are already falling in most capitals: Sydney is 8.6% below its February 2026 peak and Brisbane 5.4% below its May peak (Cotality, September 2026). Nobody can pick the bottom. What you can check is whether you could still afford the loan at your rate plus 3%, and whether you would hold the home long enough to ride out a further fall. If rates rise again, waiting also cuts what you can borrow.
Should I buy property in a trust or in my own name?
For most first-time investors, your own name, or joint names, is the usual starting point. A trust can spread income between family members and protect assets, but it costs thousands of dollars to set up and needs ongoing accounting. Trusts are usually considered by people with several properties or high rental income. Talk to a registered tax agent first.
Sources
- Cotality — Home Value Index, September 2026 (released 1 October 2026)
- Reserve Bank of Australia — Cash Rate Target
- APRA — Lending Standards and DTI Requirements
- ATO — Rental Properties and Investment Deductions
- Queensland Government — Transfer duty concessions
- WA Government — 2026–27 Housing Taxation Package
- ACT Revenue Office — Home Buyer Concession Scheme
- money.com.au — Lenders mortgage insurance costs