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There are several factors working together. 1. Higher interest rates The RBA has raised interest rates three times in 2026, reducing borrowing capacity. This is one of the strongest reasons for the slowdown. 2. Affordability After several years of strong price growth, Australian houses have become extremely expensive relative to household income. Higher mortgage repayments are therefore reducing the maximum price buyers can pay. 3. Investor demand is weakening Changes to property-investment taxation are affecting investor sentiment and demand for established properties. PropTrack specifically identifies the tax changes as one factor weighing on buyer demand. 4. Buyers are becoming cautious Falling prices can create a psychological problem: “Why should I buy today if prices could be lower next month?” That can cause buyers to wait, which further reduces transaction volumes. 5. Mortgage demand is falling Recent reporting indicates that mortgage applications have fallen substantially, particularly among property investors. 6. Inflation remains a problem Australia’s July 2026 inflation rate was 3.5%, while underlying inflation remained elevated, increasing the possibility of another RBA rate increase. This is an important risk for the property market.

This is perhaps the most important conclusion for investors, developers and businesses. The Australian market is increasingly dividing into three groups: 🔴 Group 1 — Correction markets SydneyMelbourneCanberra These markets have significant affordability problems and are experiencing more substantial price declines. Sydney and Melbourne are already more than 5% below their recent peaks according to Cotality. 🟠 Group 2 — Former boom markets now cooling BrisbanePerthAdelaideHobart These markets had very strong growth and are now experiencing the normal consequence of: high prices → affordability constraints → lower borrowing capacity → slower sales → price correction. Brisbane and Perth are particularly important because they went from being among the strongest markets to showing clear signs of slowing. 🟢 Group 3 — Resilient markets DarwinRegional QueenslandRegional WARegional SASelected regional NSW/Victoria/Tasmania Regional markets have generally been much more resilient than capital cities. PropTrack reports that combined regional prices were essentially flat in July while regional prices remained about 8% higher than a year earlier.

1. New South Wales — 🔴 Weakening / Correction New South Wales Sydney is currently one of Australia’s weakest major housing markets. July 2026 PropTrack data shows: Cotality’s July data indicates Sydney is more than 5% below its recent peak, making it one of the two major markets at the forefront of the national correction. Sydney outlook Short term: 🔴 WeakMedium term: 🟠 CautiousRegional NSW: 🟢 Better than Sydney The important distinction is between Sydney and regional NSW. Some regional NSW markets remain considerably more resilient, particularly relatively affordable areas. Investment view: Sydney is becoming more attractive for buyers who are looking for negotiating power, but I would not assume that July/August represents the bottom. 2. Victoria — 🔴 Weak / Correction Victoria Victoria is currently one of the weakest states in the Australian property market. Melbourne PropTrack recorded approximately: July 2026: -0.4% Melbourne is particularly interesting because it has significantly underperformed the other major capitals over the past few years. In June, Melbourne was the only capital city with a lower home price than a year earlier, according to PropTrack. Cotality data places Melbourne more than 5% below its recent peak. Why Victoria is weaker Major factors include: Interestingly, units are doing considerably better than some houses. In areas such as Boroondara, house prices were substantially weaker while units were more resilient. Victoria outlook Melbourne: 🔴 WeakRegional Victoria: 🟠 MixedAffordable regional areas: 🟢 Relatively better Melbourne could remain one of Australia’s softer markets during the remainder of 2026. 3. Queensland — 🟠 Strong but now cooling Queensland Queensland is probably one of the most interesting markets in Australia because it experienced very strong growth before the current correction. Brisbane Brisbane was one of Australia’s strongest markets from approximately 2023 through early 2026. But that momentum has now changed. Cotality data indicates that Brisbane peaked around May 2026 and has subsequently started falling. This is important: Brisbane has not experienced the same depth of correction as Sydney or Melbourne, but its previous growth momentum has clearly broken. Queensland regional markets This is where Queensland remains particularly interesting. Regional Queensland continues to have: PropTrack reported that Darling Downs–Maranoa was Australia’s strongest-performing region, with annual price growth around 18% in July. Queensland outlook Brisbane: 🟠 CoolingGold Coast: 🟠 Cooling but relatively strongSunshine Coast: 🟠 CoolingRegional Queensland: 🟢 StrongerMining/resource areas: 🟠 Highly location-dependent Queensland could therefore experience a two-speed market: Brisbane cooling while some regional markets continue to outperform. 4. Western Australia — 🟠 Strong but slowing rapidly Western Australia WA has been one of Australia’s strongest property markets. Perth Perth experienced extraordinary growth during 2024–early 2026. In June 2026, PropTrack reported Perth annual price growth of approximately 17.1%, making it Australia’s strongest major capital at that point. But the situation has now changed. Perth has started experiencing monthly declines, and Cotality says Perth has swung from very strong growth earlier in 2026 to a declining trend in the June–July period. So, Perth’s situation can be described as: Strong accumulated growth → affordability pressure → slowing demand → early correction. Why Perth remains important WA still has: PropTrack also reported that five of Australia’s ten strongest annual-growth SA4 regions were in WA in July. WA outlook Perth: 🟠 Strong historically, now coolingRegional WA: 🟢 Relatively strongMining/resource regions: 🟢/🟠 dependent on commodity and employment conditions WA is therefore not yet comparable with Melbourne’s weakness, despite the recent slowdown. 5. South Australia — 🟠 Strong but cooling South Australia South Australia has been another major success story since 2021–22. Adelaide Adelaide experienced substantial growth, but the market is now cooling. PropTrack recorded: July 2026: -0.5% This made Adelaide one of the weaker capital-city performers for that month. However, the bigger picture remains relatively positive. In June 2026, Adelaide was still approximately 11.9% higher than a year earlier. Regional South Australia Regional SA is particularly resilient. PropTrack reported: SA outlook Adelaide: 🟠 CoolingRegional SA: 🟢 StrongAffordable regional markets: 🟢 Particularly attractive SA is therefore another example where the capital and regional markets are behaving differently. 6. Tasmania — 🟠 Soft / Mixed Tasmania Tasmania experienced an extraordinary property boom during the earlier part of the decade. That boom has now substantially moderated. Hobart PropTrack recorded approximately: July 2026: -0.5% Hobart was among the larger capital-city declines during July. However, Tasmania’s regional market is more resilient. PropTrack’s June data showed regional Tasmania up about 13.6% annually, demonstrating that the Tasmanian market is not uniformly weak. Tasmania outlook Hobart: 🟠/🔴 WeakRegional Tasmania: 🟢/🟠 More resilient Tasmania is likely to remain a selective rather than broad-based investment market. 7. Australian Capital Territory — 🔴 Weak Australian Capital Territory Canberra is currently one of the softer capital-city markets. PropTrack reported: July 2026: -0.5% Canberra’s annual growth has also been relatively weak compared with Perth, Brisbane and Adelaide. Factors include: ACT outlook Canberra: 🔴 Weak / softShort-term: likely continued pressureMedium-term: potentially more stable once interest rates and buyer confidence stabilise. 8. Northern Territory — 🟢 Strongest short-term capital market Northern Territory The Northern Territory is an interesting exception. Darwin While almost every other capital city declined in July, Darwin increased approximately 0.1% according to PropTrack. It reached a new peak in July. Darwin also recorded approximately 14.9% annual growth over the year to July. This makes Darwin one of the strongest capital-city markets despite the national downturn. NT outlook Darwin: 🟢 StrongRegional NT: 🟢/🟠Long-term: dependent on population, government, defence, resources and employment growth. Darwin is therefore one of the clearest exceptions to the national cooling trend. State-by-state summary State/Territory Current condition Direction 2026 outlook NSW 🔴 Weak ↓ Further correction likely in Sydney Victoria 🔴 Weak ↓ Melbourne remains vulnerable Queensland 🟠 Cooling ↓/→ Regional areas relatively strong WA 🟠 Strong but slowing ↓ Perth correction possible; regional WA stronger SA 🟠 Cooling from high levels ↓/→ Regional SA remains strong Tasmania 🟠 Mixed/soft →/↓ Hobart weaker, regions better ACT 🔴 Weak ↓ Canberra likely remains soft NT 🟢 Strongest/exception →/↑ Darwin remains comparatively strong

Yes. Australia’s residential property market has clearly moved from a strong growth phase into a cooling/correction phase in 2026, and the change became much more visible from June–July 2026. However, it is important not to describe the whole Australian market as “crashing.” The market is now highly uneven: Sydney and Melbourne are in a much deeper correction, while many regional markets and parts of WA, SA and Queensland remain relatively strong. The latest available data for July 2026, together with August commentary, gives a useful picture of where the market stands as of 30 August 2026. The major change since 2021–May 2026 The market has gone through roughly three phases: Period Market condition 2021–2022 Very strong boom, followed by interest-rate correction 2023–2025 Recovery and strong growth, particularly Brisbane, Perth, Adelaide and regional markets Early 2026 Growth continued but began losing momentum May–June 2026 Turning point became increasingly obvious July–August 2026 Broad-based cooling/correction PropTrack reports that Australian home prices fell for the fourth consecutive month in July 2026, with the national median falling 0.3% in July and sitting 1.8% below the March 2026 peak. Cotality’s data shows an even larger July decline: 0.7% nationally, the largest monthly fall since December 2022. Annual growth slowed to about 5.3%, compared with the much stronger growth seen earlier in the cycle. So your observation is broadly correct: the Australian housing market has slowed substantially from its 2021–May 2026 growth trajectory.