Property values to sputter amid geopolitical uncertainty, higher rates
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The news: Property values have continued to drift lower in Sydney and Melbourne over the first two weeks of April, with some economists downgrading their expectations for price growth in 2026.
The numbers: Cotality’s daily house indices for the first 12 days of April shows property values in Melbourne have slumped almost 0.2%, with Sydney prices down almost 0.1%. This follows modest falls experienced over March in both capital cities.
Other capitals have posted modest growth over the first couple of weeks of the month.
Melbourne and Sydney property values declined 0.1% and 0.2% respectively in March.
The context: AMP chief economist Shane Oliver said in a note on the weekend that Australian home price growth is “likely to slow” to between 3% and 5% over 2026. He attributes this sluggish forecast to poor affordability, interest rate rises from the Reserve Bank and the “hit to confidence from higher fuel prices and the War”.
Earlier in April, Goldman Sachs economists said that their base case — which includes three successive interest rate cuts over February, March and May — will see a 1% decline in dwelling prices over 2026, followed by a 1% rise over 2027.
Economists at the nation’s biggest lender, the Commonwealth Bank, are currently expecting property values to rise 5% in 2026, with a slowing in the second half of the calendar year. This forecast was made in early March and has not been changed, but in a more recent note CBA said: “recent events have increased the risk of house price growth coming in lower than we are currently forecasting”.
The sources: Cotality daily indices back series, AMP research note, Goldman Sachs research note, Commonwealth Bank research note
