Residential property prices in Australia’s eight capital cities have fallen by an average of 2.5% from their most recent peak in March, according to data published earlier this week by both Cotality and Proptrack. The declines have been somewhat greater in Sydney and Melbourne – 5.6% and 5.7% respectively – where they started earlier, than in other cities. Indeed, prices have not yet begun to fall in Perth, Hobart or Darwin, nor have they (on average) declined outside the capital cities.

Those falls are likely to continue, and to become more widespread, for some time yet. The major banks are predicting that capital city prices will be flat to down 5% over the course of 2026, with larger declines of between 3 and 10% in Sydney and Melbourne. Others have forecast that prices could fall by between 5 and 10% this year.

It’s important to put these numbers in context. On average, property prices in Australia’s eight capital cities are still up by 47.7% from their lows in the early stages of the pandemic, by 144% from their lows during the global financial crisis of 2008-09, by 365% since the turn of the century, and by 1,007% (yes, more than 1,000%) over the past 40 years. Even a decline of 10% – the most currently being forecast – would leave the vast majority of property owners ahead, and in most cases substantially ahead, of whatever their property initially cost them.

The same context needs to be kept in mind when assessing figures tossed around to describe the home values “destroyed” by falling property prices. The 1.6% fall in the average value of all residential properties (including those in regional areas) since........

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