Australia Sees Record Drop in House Prices, Regional SA Still Climbing

Domain report shows steepest quarterly fall as RBA rate rise freezes buyer enquiries

By LineZotpaper AI staff

Published24 October 2026

Read Time2 min

Sources2 outlets

Australia's national housing market recorded its steepest quarterly decline on record, falling 4.7 per cent in the three months to September 30, according to the latest Domain property report. Every capital city saw median house prices fall for the first time in 15 years, but some regional markets continue to climb, led by a 19 per cent annual rise in regional South Australia.

The latest Domain property report has revealed Australia's deepest quarterly national house price drop on record, with the median price falling 4.7 per cent in the three months to September 30. Every capital city recorded a decline for the first time in 15 years.

Regional areas fared better in some states. Prices outside Adelaide rose 19 per cent over the past 12 months to a median of $595,000, the strongest regional growth in the country. Across all Australian regional areas, the median house price fell 1.1 per cent in the quarter.

Adelaide University housing economist Chris Leishman said the regional lag was expected, with Sydney and Melbourne typically the first to shift. "There has to be a correction," he said, predicting a downturn lasting six to 12 months before a resumed rise. He noted that Australian markets "tend not to crash".

The Reserve Bank raised interest rates to a 15-year high two days before the end of the quarter. Margot Shortt, a real estate agent in Naracoorte, described the past year as "nothing short of crazy" but said buyer enquiries at her agency had since "absolutely fallen off a cliff", by an estimated 99 per cent. She said it was impossible to know if local prices had fallen because so few sales were being completed.

Helen Burns, who sold her home in the Adelaide Hills and moved 350 kilometres south-east to Penola in April, said the financial calculation made the move a "no-brainer". She said she had "pretty much tripled the land size and doubled the house size for only $20,000 more".

Analysis

Why This Matters

The record national decline signals a broad market cooldown after a historic boom, directly affecting homeowner equity and buyer timing.
The lagging performance in regional markets shows how price cycles move through the economy, with outer areas usually the last to peak and fall.
The RBA rate increase appears to have created an immediate freeze in buyer enquiry, according to agents, raising questions about transaction volume and price discovery.

Background

Australia has been in one of its longest and most pronounced housing booms. A Proptrack report noted that regional South Australian house prices had almost doubled in the five years leading up to 2026. The latest Domain data suggests that boom is decisively slowing.

Key Perspectives

Helen Burns, recent home seller and buyer: Described the move from the Adelaide Hills to Penola as a "no-brainer" given the steep increase in property value for a similar outlay, tripling her land size and doubling the house size for an extra $20,000. Margot Shortt, Naracoorte real estate agent: Said the past year had been "nothing short of crazy" but reported that the RBA rate rise had caused buyer enquiries to drop by an estimated 99 per cent, leaving the agency unable to confirm whether local prices had fallen due to a lack of recent sales. Chris Leishman, housing economist at Adelaide University: Argues that regional South Australia is simply late to the cycle, and that a national correction of six to 12 months of falling prices is likely, though he does not expect an Australian market crash.

What to Watch

The real impact on regional sales volumes if the reported collapse in enquiries continues and prevents normal price discovery.
Whether the expected November interest rate rise materialises and delivers the "another level of pain" that the Naracoorte agent predicts for buyers.
The length of the market correction, and whether the six to 12 month downturn predicted by Professor Leishman holds true.

Sources

Some regions still climbing as nation sees record drop in house prices · ABC News
Some regions still climbing as nation sees record drop in house prices · ABC News

Checked

12 claims in this story checked against 1 source: 9 supported.

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SupportedAustralia’s housing market fell 4.7% in the quarter to September 30, its steepest quarterly drop on record.Latest business news: “The latest Domain property report showed Australia's housing market fell 4.7 per cent , the steepest quarterly drop on record.”
Partly supportedRegional South Australia was still climbing, with prices outside Adelaide up 19% over 12 months to a median of $595,000; the story calls this the strongest regional growth in the country.Latest business news: “The latest Domain property report showed prices outside of Adelaide rose 19 per cent in the past 12 months, with the median price at $595,000.”
Partly supportedThe summary says an RBA rate rise froze buyer enquiries.Latest business news: “Ms Shortt said this, along with broader economic factors, meant calls and messages to the agency had "absolutely fallen off a cliff".”
SupportedEvery capital city saw median house prices fall for the first time in 15 years.Latest business news: “Every capital city has seen the median house price head south for the first time in 15 years.”
SupportedAcross all Australian regional areas, the median house price fell 1.1% in the quarter.Latest business news: “Across all regional areas, the media house price fell 1.1 per cent in the last quarter.”
SupportedLeishman said, “There has to be a correction.”Latest business news: “Across Australia, he failed to see strong growth over the next couple of years and believed there "has to be a correction".”
SupportedLeishman said Australian markets “tend not to crash.”Latest business news: “"Markets tend not to crash though, particularly in Australia," he said.”
SupportedLeishman expected a downturn lasting six to 12 months before prices resumed rising.Latest business news: “He expected six to 12 months of prices going down further, before starting to rise again in the long term.”
SupportedThe RBA raised interest rates to a 15-year high two days before the quarter ended.Latest business news: “Domain's data only runs to September 30; and two days earlier, the RBA lifted interest rates to a 15-year high.”
SupportedShortt described the past year as “nothing short of crazy.”Latest business news: “Naracoorte real estate agent Margot Shortt described the past year as "nothing short of crazy" with many people getting into the market thinking it would keep rising.”
SupportedShortt said enquiries had “absolutely fallen off a cliff,” by an estimated 99%.Latest business news: “Ms Shortt said this, along with broader economic factors, meant calls and messages to the agency had "absolutely fallen off a cliff". "We have seen probably a 99 per cent decline in enquiries."”
Partly supportedBurns said she “pretty much tripled the land size and doubled the house size for only $20,000 more.”Latest business news: “"[I] pretty much tripled the land size and doubled the house size for only $20,000 [more]," Ms Burns said.”