Australia Housing Market Slows in May 2026

Australia’s housing market showed clearer signs of slowing in May, with Cotality’s national Home Value Index remaining flat. The data suggests that momentum is easing across most regions as buyers face affordability pressure, tighter borrowing capacity and broader demand-side challenges.

The slowdown was most visible in Sydney and Melbourne, where dwelling values fell by 0.9% and 0.8% respectively over the month. Both cities are now below their recent market peaks recorded in November last year. The ACT also softened slightly, with values down 0.2%.

However, the market remains highly uneven. Perth and Darwin recorded the strongest monthly gains at 1.5%, followed by Brisbane and Hobart at 0.9%, and Adelaide at 0.5%.

Cotality Research Director Tim Lawless noted that Australia’s housing market is moving at different speeds. Over the past five years, Perth home values surged 91.4%, while Melbourne rose only 3.3%, highlighting the gap between stronger and weaker city markets.

Sales activity is also cooling. National home sales over the past three months were estimated to be 2.2% lower year-on-year and 4.1% below the five-year average. Sydney and Melbourne recorded the sharpest annual falls in sales, down 17.0% and 14.2% respectively.

Outlook

Looking ahead, Australia’s property market is expected to remain selective rather than broadly weak. Cities with stronger population growth, tighter supply and better affordability may continue to outperform.

For buyers, rising listings and softer auction clearance rates could create more room to negotiate. For sellers, realistic pricing will be increasingly important as market conditions become more balanced.