The downturn began when prices first eased in March, and has since accelerated. Cotality data shows national prices have fallen 5.2 per cent from their peak, pushing values below where they stood a year ago, with deeper falls in Sydney and Melbourne. House prices have almost doubled since 2014 across Australia, according to Cotality.
For many renters, the slump is the first real chance they have seen to escape the rental market. Mike, a 50-year-old Sydney software developer, said: "After never being able to afford to buy a house, maybe now I will." A Melbourne couple in their 30s, who work in the social sector, said the insecurity of renting had stopped them starting a family. Rents have risen 25 per cent in four years across Australia. "We're hoping to start a family but have held off the past couple of years until we had secure housing," they said. They now hope to buy next year.
Others are more sceptical. George Lucas, a 26-year-old Canberra student, was doubtful when prices first began to ease. "They were talking about it falling and then it didn't fall that much. That was the moment I was like, 'oh, it's all a bit ruined'," he said. "I guess what everybody wants to know is, are they going to fall enough that it finally tips the dial and people can get in? Or is it going to fall a bit, but leave everybody locked out?"
Tracey, a 47-year-old single parent and primary school teacher who asked not to be named, missed her chance to buy into rural south-east Queensland and has seen her rent nearly triple in a decade. She now lives with her son in a cabin on a friend's property. "By the time I'm actually approaching a bank and saying, hey, I want a loan, I won't have enough years pre-retirement to be able to pay one off," she said. She believes she has "probably missed that boat", but hopes her 17-year-old son may still have a chance "if house prices slow enough".
The federal government reformed property investor tax breaks in the May budget, a change housing affordability advocates cheered, though many renters were muted in their support. The government initially predicted the reform would shave 2 per cent off price rises and help an extra 75,000 Australians into home ownership over a decade. But prices have fallen far further as the tax change combines with four interest rate rises and persistent inflation, and the decline is now expected to endure into late 2027.
There are roughly 3 million households renting in Australia, about the same as the number who own without a mortgage, and about 120,000 Australians enter the housing market each year. Some renters, surprised by the extent of the downturn, are already taking the chance to buy at a discount. First home buyers are also eligible for a federal government 5 per cent deposit scheme.