Australian property in 2026: Why some markets are falling while others grow
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Australian property prices are falling nationally, but that does not mean every market—or every property portfolio—is moving backwards.
Some locations are still attracting buyers and recording growth. Others are facing weaker demand as borrowing costs and household budgets come under pressure. Investors are also reconsidering where they put their money as tax settings and funding conditions change.
For anyone who owns investment property, the question is practical: how are these changes affecting your holdings, and does your plan still work?
Our April 2026 Cash Rate Outlook examined three pressures on the property market: Budget changes, credit conditions and global economic forces. The figures reported in early September show why investors need to consider all three together.
What is happening to Australian property prices?
Cotality’s August 2026 Home Value Index recorded a 0.9 per cent fall in national dwelling values for the month, with the pace of decline more than doubling from July.
That tells us conditions weakened nationally. It does not tell us how every suburb, price bracket or property type performed.
Source: Cotality Home Value Index, August 2026.
An investor can own one property in a market with limited supply and steady buyer demand, and another where buyers have become more cautious. Both contribute to the national result, but their prospects may be quite different.
The national figure provides context. Decisions about buying, holding or selling need evidence closer to the property itself: comparable sales, local supply, rental demand and the costs of ownership.
Will the RBA raise interest rates in September 2026?
During the week of 7 September, market pricing indicated roughly a 70 per cent probability of an interest rate rise at the September RBA meeting.
That was a probability at a particular point in time, not a confirmed decision. Market expectations can change as new information becomes available.
Source: RBA rate probability tracker, week of 7 September 2026.
For investors, the useful question is whether their portfolio can remain affordable if borrowing costs stay elevated or rise further.
A plan that depends on an early rate cut leaves little room for an unexpected expense, a vacancy or a change in household income. Reviewing those exposures now gives you more time to make considered decisions.
Why do overseas markets affect Australian property loans?
Australian mortgage rates are influenced by both the RBA cash rate and the cost of funding loans.
In early September, oil was reported near US$109 a barrel and the US 10-year Treasury yield at 4.96 per cent. In our April research, that yield was above the 4.80 per cent ceiling used in our baseline scenario.
Sources: AFR Markets / Guardian Australia, week of 7 September 2026; Ramsey Property Wealth, April 2026 Cash Rate Outlook.
Higher oil prices can add to inflation through transport, production and business costs. Global bond markets can also influence the wholesale funding costs faced by Australian lenders.
Those changes do not flow into every mortgage equally or immediately. They do help explain why investors should pay attention to their actual loan pricing and refinancing options, alongside RBA announcements.
Our research models a housing lending premium widening from around 2.30 percentage points towards 2.44–2.66 percentage points across different scenarios. These are modelling assumptions, rather than a prediction that every borrower’s rate will move by the same amount.
Source: Ramsey Property Wealth, April 2026 Cash Rate Outlook and associated scenarios.
Why can property prices fall while the economy grows?
Economic growth and property prices measure different things. They can move in opposite directions.
The figures cited in the September reporting showed GDP growing by 0.4 per cent over the June quarter and 2.1 per cent over the year. Household spending rose by 7.0 per cent over the year, compared with the previous reading of 6.0 per cent.
Source: ABS, 2026.
Stronger spending does not automatically mean buyers can afford larger mortgages. Borrowing capacity, interest costs, confidence and the supply of properties for sale also affect purchasing decisions.
The same economic conditions can affect households differently. An owner with little debt may continue spending comfortably, while a highly leveraged investor faces a substantial increase in holding costs.
That is why GDP or spending growth alone cannot explain what is happening to property prices.
Which parts of the property market are moving differently?
Our analysis focuses on three differences: price bracket, location and who is investing.
How does the price bracket affect demand?
Borrowing constraints affect the price buyers can pay. Demand can shift towards more affordable properties even while higher-priced segments weaken.
Investors should examine activity within their property’s price range. A suburb-wide median can conceal different conditions for entry-level homes, larger family properties and premium stock.
Why are some locations holding up better?
Local demand and supply can produce a different result from the national trend.
The Age reported that Secret Harbour, in outer Perth, crossed a million-dollar median during the week of 7 September, illustrating how individual locations can strengthen while broader commentary focuses on falling prices.
Source: The Age Property, week of 7 September 2026.
One suburb does not establish a trend across every regional or outer-suburban market. It does show why location-specific evidence belongs in a portfolio review.
Where is investor money moving?
The Australian Financial Review reported that Labor’s tax changes were prompting a shift towards commercial and specialised property, with institutional investment occurring alongside changes in residential investor activity.
Source: Australian Financial Review, week of 7 September 2026.
For an individual investor, that is a reason to reassess the available options carefully. Different property types bring different financing requirements, lease arrangements, costs and risks. A shift in market attention does not make an asset suitable for every portfolio.
What should property investors do now?
Start by reviewing each holding against your financial position and long-term goals.
Consider whether:
- Rental income covers an acceptable share of the property’s costs.
- Your cash reserves can absorb vacancies, repairs or higher repayments.
- Your loan structure remains suitable.
- Local sales and rental evidence support your expectations.
- The property still serves the purpose you bought it for.
At Ramsey Property Wealth, our property portfolio planning scenarios include testing a prolonged period of restrictive borrowing conditions and borrowing costs around 8 per cent. These are stress-test assumptions, not forecasts or a universal lender serviceability standard. Any assessment should specify the interest rate, repayments and other costs being tested.
Two investors can own similar properties and have very different options because their debt, income, reserves and timeframes differ.
A useful review brings those details together with the property’s performance. It should help you understand what you can comfortably hold, where you may need to make changes and whether another purchase would strengthen your position.
If you would like help reviewing how your properties, lending and long-term plans fit together, book a discovery session with Ramsey
Property Wealth.
Author & Research Reviewer
Dr Prabath Morawakage - PhD, CPA
PhD, Real Estate Finance and Economics
Head of Property Economics and Intelligence
Ramsey Property Wealth
General advice only. Past performance is not a reliable indicator of future performance. Ramsey Property Wealth, ACR 389087.