Falling home values can lead to a new mortgage prison. Here’s how to escape

September 6, 2026 — 3:00am

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If you’re a homeowner, as two-thirds of Australians are, you’re probably not enjoying headlines featuring words like “falls”, “tumbles” and even “crash coming”. They hardly make you feel relaxed and comfortable.

So, let’s get into what is really happening and what a falling property market means when you are already invested.

The sweeping changes to negative gearing and capital gains tax are designed, really, to correct the housing market. Good if you’re an aspiring buyer but not so much if you’ve already bought … and particularly recently.

More house price pain to come, warns nation’s biggest lender

The latest PropTrack Home Price Index Report shows the market has fallen for five straight months … a 0.2 per cent retraction in August brings the pull back to 2.7 per cent below the March 2026 peak.

The budget announcing the tax changes was on May 12.

Meanwhile, the growth forecasts are sobering. At least they are for the next couple of years.

So what to do if you’re a homeowner?

What you can do about it

Firstly, if you are in the happy position of outright owning your home, as about one-third of Aussies are, this is not such an issue. (Having said that, you may well have........

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