Aidan Devine
Updated 11 Jun 2026, 12:25pm
First published 11 Jun 2026, 10:33am
Home prices have been falling over the past three months.
Sydney house price falls have dragged property values down by an average of $75,000 in the past three months – the second-largest nominal drop ever recorded.
Primara and HomeLoanRates.com.au analysis of ABS median dwelling data revealed Sydney’s median house price dropped from $1.56m to $1.485m over the March quarter.
This was the largest nominal fall in prices behind only a $100,000 fall recorded in September 2017 – a period when financial regulators slammed the brakes on the market with investor loan restrictions.
In percentage terms, the March quarterly decline was 4.8 per cent – the largest percentage fall in seven years.
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RBA governor had been expected to announce more rate hikes this year, but the outlook is now less certain. Picture: NewsWire / Christian Gilles
Primara head of research Peter Drennan said the Sydney market was at a turning point.
Recent price falls could be explained by higher interest rates and lower buyer demand but this trend may not necessarily continue, Mr Drennan said.
He explained that the uncertain interest rates outlook, with some banks recently forecasting rate cuts in 2027, could soon put the market on a different path.
“The Sydney market is at an inflection point,” Mr Drennan said.
“Demand has pulled back sharply, sales are down significantly across both houses and apartments, and two (interest) rate rises are still working their way through the market.
“A third in May means quarter two is unlikely to look any different.
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A crowd at a Sydney auction in previous years – when demand was much higher. Picture: James Gourley
Source: HomeLoansRates.com.au
“What makes this moment genuinely uncertain is that some major banks are now forecasting rate cuts rather than further rises.
“If that materialises, the demand that has left this market could return quickly, and a $75,000 price drop starts to look less like a warning and more like a window of opportunity.”
Mr Drennan added that the HomeLoanRates data showed housing supply remained heavily restricted across Sydney.
Some banks have already begun to cut variable rates. Data from Canstar.com.au revealed 11 lenders cut select variable rates in the past six weeks, independent of moves by the RBA.
Canstar insights director Sally Tindall said lenders made the cuts as a way to get more customers.
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NAB last week changed its forecasts for interest rates, walking away from previous predictions of more hikes. The major bank now says it expects no more RBA rate increases this year.
Commonwealth Bank has said it expected two interest rate cuts next year.
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