Residential property values edged lower during July, continuing a period of modest price softening across much of the country. Although most markets recorded small monthly declines, the broader picture remains relatively resilient, with the majority of locations still sitting above their levels of 12 months ago. The latest figures indicate that while momentum has slowed in some capital cities, regional markets continue to demonstrate greater stability.
According to the latest PropTrack Home Price Index, dwelling values declined across almost every market during July. The only exceptions were Regional South Australia, where prices increased by 0.6%, and Darwin, which recorded a modest gain of 0.1%.
Elsewhere, conditions were generally steady rather than sharply weaker. Regional Queensland, Western Australia, Tasmania and the Northern Territory all recorded unchanged median dwelling values over the month. Importantly, every market that experienced a decline saw prices fall by less than 1%, indicating that the overall slowdown remains relatively mild.
The latest results suggest housing markets are transitioning into a more balanced phase after several years of strong price growth. Higher borrowing costs and affordability pressures continue to moderate buyer demand, yet limited housing supply is preventing more substantial price corrections in many parts of the country.
Looking beyond the monthly movements provides a more encouraging picture. Most markets remain higher than they were at the same time last year, demonstrating that recent monthly declines have only marginally reduced the strong gains accumulated over previous years.
Perth and Darwin continue to lead annual growth, with both cities recording median dwelling price increases of 14.9%over the past 12 months. These markets have consistently benefited from comparatively affordable housing, population growth and limited supply, helping support continued demand despite broader economic challenges.
Strong annual growth was also recorded in Regional Western Australia, where dwelling values rose by 14.2%compared with the previous year. Many regional centres have continued attracting buyers seeking improved affordability and lifestyle opportunities, while relatively constrained housing supply has helped maintain upward pressure on prices.
Not every market has experienced positive annual growth. Sydney remains 1.6% below its level of 12 months ago, while Melbourne has recorded the largest annual decline among the major capitals at 2.7%. The Australian Capital Territoryalso sits below last year’s levels, with dwelling values down 0.9% over the same period.
These differences highlight the varying conditions influencing individual markets. Higher-priced cities have generally experienced greater affordability pressures, causing buyers to become more selective and reducing the pace of price growth. Meanwhile, more affordable regions continue attracting demand from owner-occupiers, investors and lifestyle buyers.
The relative strength of regional markets has become one of the defining features of Australia’s housing sector over recent years. Improved workplace flexibility, internal migration and ongoing affordability advantages have helped many regional locations outperform larger metropolitan markets.
PropTrack Senior Economist Anne Flaherty said this trend continued throughout July.
“Home prices in Australia’s regional areas continued to show greater resilience than the capital cities, with the combined regional areas seeing prices hold steady over the month,” she said.
Her comments reinforce the growing divide between regional and metropolitan housing markets. While many capital cities have entered a period of slower growth or modest declines, regional locations continue to demonstrate greater price stability, supported by relatively tight housing supply and consistent buyer demand.
Affordability remains a key factor shaping buyer behaviour. Higher interest rates have reduced borrowing capacity for many households, encouraging purchasers to carefully assess budgets and, in some cases, consider more affordable regional alternatives instead of capital city locations.
At the same time, limited housing supply continues to provide an important buffer against larger price falls. New listings remain relatively constrained in many areas, while population growth continues to underpin long-term housing demand. This imbalance between available housing and the number of prospective buyers has helped prevent significant corrections despite softer market conditions.
The modest declines recorded during July also reflect a market that is adjusting rather than weakening dramatically. Buyers remain active, but negotiations are becoming more measured as affordability constraints influence purchasing decisions. Sellers, meanwhile, are increasingly setting realistic price expectations to reflect current conditions.
Looking ahead, market performance is likely to remain closely linked to interest rate movements, employment conditions and the pace of new housing construction. If supply continues to lag population growth, housing values are expected to receive ongoing support even if monthly price movements remain subdued.
Overall, July’s figures point to a housing market experiencing a period of moderation rather than widespread decline. While some capital cities continue to soften, most regions remain stronger than they were a year ago, and regional markets continue to display notable resilience. The combination of limited supply, ongoing population growth and relatively stable demand suggests Australia’s property market remains on a solid long-term footing despite the recent easing in monthly price growth.
