Melbourne's cheaper homes attract investors amid Australia's deepening property downturn

A property agent sees interstate interest in Victoria, while researchers warn that further rate rises could prolong buyers' hesitation.

Channel: ABC News (Australia) ·

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'Largest property downturn in 40 years' in sight, says property analyst | The Business | ABC NEWS

Things we can learn from the video

Press to jump

0:00A Brisbane property is passed in at auction as prospective buyers hold back.
0:55National home values fell in October but remain substantially higher than a decade earlier.
1:37Gerard Burg says the capital-city downturn is approaching the largest recorded across the past forty years.
1:56Westpac forecasts an eleven per cent peak-to-trough fall before recovery begins in the second half of 2027.
2:04Jin Ling says lower Victorian prices are attracting interstate investors, though a fuller recovery could take years.
3:12Nicola Powell says discussion of potential rate cuts is needed to improve buyer confidence.

Falling prices are making Victorian homes more appealing to interstate investors, Melbourne agent Jin Ling says, even as Australia's broader property downturn approaches a four-decade benchmark.

His account offers a contrast to the hesitant Brisbane bidders who open this report from Australia's Australian Broadcasting Corporation (ABC). Auctioneer Sam Devlin cannot secure a sale, and the property is passed in. He says buyers who also need to sell a home lack confidence and are reluctant to bid without a condition allowing their own sale to go through.

Business reporter Nassim Khadem sets those encounters against Cotality's October housing figures: national home values fell 1.2 per cent, their seventh consecutive monthly decline. Brisbane recorded the steepest monthly fall, followed by Perth and Sydney. Hobart and Darwin posted modest gains.

The historical warning concerns the combined capital cities. Cotality research head Gerard Burg says their seven-month decline has reached 8.1 per cent, close to the 8.2 per cent fall recorded between 2017 and 2019. "We are already on track to see the largest downturn across the last 40 years," he says.

That does not mean homes have returned to prices familiar from a decade ago. The report puts national values almost sixty per cent above their level then, despite the recent falls. It also links weaker investor demand to federal budget changes to property tax breaks.

The forecasts differ in scope. Westpac chief executive Anthony Miller expects an eleven per cent peak-to-trough decline before recovery begins in the second half of 2027. Ling thinks a fuller recovery could take several years, although he is already seeing interstate buyers attracted to Melbourne's lower prices.

The report was published before the next interest-rate decision. In a subsequent update on Tuesday, ABC reported that the Reserve Bank of Australia had raised its cash rate to 4.85 per cent, its fifth increase of 2026.

Domain research chief Nicola Powell identifies the confidence hurdle: buyers need something to change, and she does not expect that until a potential rate cut enters the discussion. In the report, she suggests that could be as late as the latter part of 2027.

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