Sydney and Melbourne house price corrections are steep.

April 25, 2026

House price corrections in Sydney and Melbourne continue to accelerate.

According to Cotality’s daily house values index, house prices in Sydney and Melbourne have fallen by 0.5% over the past 28 days, with the pace of decline accelerating.

Sydney and Melbourne house price corrections are steep.

Both cities recorded their sharpest declines since early January 2025, before the Reserve Bank of Australia (RBA) made the first of three interest rate cuts last year.

Auction markets in Sydney and Melbourne are also weakening, as shown below.

Sydney and Melbourne auction clearance rates

Sydney’s April auction average final approval rate (51%) is the city’s weakest since the peak of the COVID-19 pandemic in April 2020 (39%).

Melbourne’s average final auction approval rate for April (54%) is the city’s weakest since July 2022 (also 54%).

The interest rate futures market expects the RBA to make two more 25bp rate hikes this year, taking the official cash rate to a 15-year high of 4.6%:

Recall SQM Research’s latest forecasts warn that if the official cash rate rises above 4.5% this year, house prices in Sydney and Melbourne will fall by between -4% and -9% (ie scenario 2):

This week, amid falling auction clearance rates, SQM Research founder Louis Christopher told News.com.au his forecast for falling prices was on track:

Louis Christopher said it was a “very, very bleak outcome” for the Sydney housing market.

“Our numbers are among the lowest recorded since the Covid lockdown in 2020, when auction markets necessarily collapsed in the lead-up to the lockdown,” he said. “That tells me house prices in Sydney are falling as we speak.”

SQM’s revised forecast for the year is for Sydney house prices to fall by 6%.

“I would suggest that we are very much on track for these kinds of results,” Mr Christopher said…

For the Victorian capital, Mr Christopher said “it’s not a good result”.

“It’s certainly not as weak as Sydney, but we’re seeing Melbourne’s clearance rate actually trending down from August 2025,” he said.

“And it’s been a very consistent downward trend”.

Christopher added that “Immediate vision is weak”, Given the possibility of further rate hikes and budget changes in property tax concessions