Weekly Market Brief: Spring Arrives as Australia’s Housing Downturn Broadens

Spring has arrived, but Australia’s property market is entering the traditional selling season under very different conditions to recent years. National dwelling values fell 0.9% in August, marking a fifth consecutive month of decline, while the weakness has spread across almost every capital-city market.

Around 93% of capital-city suburbs recorded falling values through winter, up from less than half during autumn. Canberra values declined another 1.1% in August, while the city entered spring with an auction clearance rate of 47%.

At the same time, inflation remains above the RBA’s target range, bringing renewed interest-rate uncertainty into a market already dealing with reduced borrowing capacity.

For Canberra, spring is likely to bring more activity and more property to market, but buyers are becoming increasingly selective about where they see value.

The downturn has broadened

The biggest change in the latest housing data is not simply that prices are falling, it is how widespread those falls have become.

National dwelling values declined 0.9% in August. Sydney recorded the largest capital-city fall at 1.4%, followed by Canberra and Melbourne at 1.1%. Brisbane declined 1%, while Adelaide and Perth both fell 0.8%.

Australia’s median dwelling value is now 3.6% below its March peak.

More tellingly, 93% of capital-city suburbs recorded declining values through winter, compared with 45.8% during autumn.

This is no longer weakness confined to particular property types or previously underperforming locations. It points to a broader shift in buyer behaviour.

Buyer demand has softened

Cotality estimates national property sales are 15.5% lower than a year ago and 11.5% below the five-year average.

Prices tell us where transactions are occurring. Sales volumes tell us how willing buyers are to transact at all.

Higher borrowing costs, reduced borrowing capacity and broader economic uncertainty are all influencing demand. Buyers also know prices have been falling, which changes the urgency around purchasing.

In a rapidly rising market, waiting can mean paying more. In a falling market, buyers have greater reason to be patient.

That change in behaviour can place further pressure on sellers to demonstrate value.

Canberra values fell another 1.1%

Canberra was among the weaker capital-city markets in August, with dwelling values declining 1.1%.

That does not mean every Canberra home lost 1.1% of its value in a month. Property markets are far more localised than a city-wide index suggests.

Affordable houses and townhouses can attract different levels of demand to premium homes requiring larger loans. Renovated properties can perform differently to homes requiring significant work, while competing stock can produce very different outcomes between neighbouring suburbs.

The useful takeaway is not that every property is falling at the same rate. It is that buyers increasingly want evidence before paying a premium.

Spring stock is arriving

Canberra auction activity increased during the final week of winter, with 84 auctions scheduled between 23 and 29 August.

Of 78 reported results, 37 properties sold, 15 were withdrawn and 26 passed in. That produced a clearance rate of 47%, compared with 61% during the equivalent week last year. The median reported sale price was $923,000.

It is an important early indicator for spring.

Stock is increasing, but buyer competition has not yet increased at the same pace. Buyers gain more choice, while sellers face greater competition from other listings.

A busy market is not necessarily a strong market

Spring traditionally brings more listings, inspections and transactions. That does not automatically mean higher prices.

A market can become considerably busier while values continue to decline. If the number of properties for sale grows faster than the number of active buyers, additional stock can place further pressure on prices.

For Canberra sellers, spring itself is not a strategy.

More buyers may enter the market, but those buyers also have more homes to choose from. Each property needs to compete for their attention and demonstrate value against the alternatives.

Inflation adds another uncertainty

The latest inflation figures have complicated the outlook.

Annual CPI inflation was reported at 3.5% in July, while trimmed mean inflation remained at 3.6%. Housing costs increased 5% over the year and new dwelling construction costs rose 5.7%.

With inflation remaining above the RBA’s target range, discussion around further interest-rate increases has returned.

For buyers, higher rates would place additional pressure on borrowing capacity. For sellers, they could weaken confidence as spring listings increase. For builders and developers, higher financing costs can make new housing projects harder to deliver.

Housing is being squeezed from both directions.

Housing costs remain part of the inflation problem

The latest figures also highlight a difficult feedback loop.

Higher labour and material costs contribute to rising new dwelling prices. Those housing costs add to inflation. Persistent inflation increases the risk of restrictive interest rates, which in turn makes development finance more expensive.

Projects then become harder to deliver, potentially slowing construction and adding further pressure to Australia’s housing shortage.

It reinforces why housing affordability cannot be addressed through interest-rate settings alone.

Canberra buyers have more leverage

For Canberra buyers, current conditions provide greater negotiating power than a year ago.

A 47% auction clearance rate means a significant proportion of reported campaigns are not producing an immediate sale. Buyers can compare more properties, review recent comparable sales, negotiate terms and walk away where the available evidence does not support the asking price.

That does not mean every property will be negotiable.

Well-presented homes in tightly held locations can still attract several motivated buyers. The broader market can be weak while an individual property remains highly competitive.

The key is understanding the difference.

Sellers need to respond to the market early

For sellers, the opening weeks of a spring campaign are particularly important.

New listings are usually seen quickly by the strongest active buyers. If those buyers inspect and consistently reject the property at its current price, that feedback should inform the campaign strategy.

Waiting does not automatically create a stronger result. As competing stock increases, buyers may simply move to the next property.

The objective is not to undersell. It is to position the property where enough buyers recognise value to create genuine competition.

This reflects Hayman Partners’ approach of using market evidence, buyer feedback and realistic pricing to guide campaign decisions rather than relying on a one-size-fits-all strategy.

Presentation matters more when buyers have choice

A softer market does not make property marketing less important. It makes differentiation more important.

When buyers have limited options, an average campaign can still attract attention. When listings increase, poorly presented properties become much easier to overlook.

Professional photography, considered styling, accurate floorplans, quality video and clear campaign copy all help communicate why a property deserves attention.

But presentation and price need to work together. Marketing can strengthen perceived value, but it cannot permanently overcome a price buyers cannot justify.

Hayman Partners’ sales approach similarly focuses on tailoring marketing to the individual property, using local market knowledge and adjusting campaigns to current buyer conditions.

Not every owner needs to sell

One factor that may limit the severity of the downturn is the absence of widespread distressed selling.

When owners have the financial capacity to hold rather than sell into weaker conditions, some simply delay their plans. That can restrict the amount of stock reaching the market and provide some support to prices.

The distinction matters. A market where owners choose to sell is very different from one where large numbers of households are forced to sell.

That makes employment conditions, household finances and mortgage serviceability important indicators alongside prices and clearance rates.

What to watch through September

Three indicators should provide a clearer picture of Canberra’s early spring market.

The first is auction clearance. If auction volumes continue increasing while clearance rates remain around or below 50%, buyers are likely to retain considerable negotiating power.

The second is listing supply. More properties coming to market without a corresponding increase in buyer demand would create greater competition between sellers.

The third is interest rates. Any further tightening would place additional pressure on borrowing capacity and confidence.

How those three factors interact will tell us far more about the spring market than listing volumes alone.

Final thought

Australia’s housing correction has broadened. National values declined again in August, Canberra fell 1.1%, around 93% of capital-city suburbs recorded falling values through winter and Canberra entered spring with a 47% auction clearance rate.

Those figures point to genuine weakness, but they do not mean the market has stopped functioning.

Homes are still selling and buyers are still active. What has changed is the balance of power.

Buyers have more choice, more time and more market evidence on their side. Sellers face more competition and need to respond quickly to what the campaign is telling them.

For sellers, spring will reward realistic positioning and strong presentation. For buyers, it creates an opportunity to make more considered decisions.

The spring market has arrived. The advantage will sit with those who adjust to it fastest.