CommBank now expects a deeper housing correction, spreading beyond Sydney and Melbourne

Commonwealth Bank economists have revised their outlook this month, now expecting the national housing correction to run deeper and wider than first thought. The bank's updated modelling points to national dwelling prices falling around 9% from their March 2026 peak, with the downturn no longer confined to Sydney and Melbourne. Brisbane, Perth and Adelaide, some of the strongest performers over the past few years, are now sliding too. For anyone currently saving a deposit or weighing up whether to buy now or wait, this update changes the maths worth running.

What CommBank is now forecasting

National dwelling prices fell another 0.9% in August, the fifth straight monthly decline, leaving values roughly 3.6% below their peak. CommBank's economists expect the five-capital-city average to trough around 10% below its most recent high, with Sydney and Melbourne remaining the weakest markets at an estimated 13% and 12% peak-to-trough decline respectively.

What has changed is the geography. Earlier in the cycle, the correction was mostly a Sydney and Melbourne story. CommBank's latest view is that price falls have spread into Brisbane, Perth and Adelaide, cities that had been comparatively resilient. A recovery is still pencilled in for 2027, contingent on the Reserve Bank cutting rates, but the bank is not calling a bottom just yet.

It is worth remembering that bank forecasts are estimates, not guarantees. Different banks have published different numbers this year, and actual outcomes will depend on how inflation, employment and interest rates track over the coming months. Think of this as one credible data point among several, not a certainty to plan around.

Why a wider downturn matters more than a deeper one

A price fall concentrated in one or two cities is relatively easy to plan around if you are looking elsewhere. A downturn that spreads across most capitals removes that option. It also changes the calculation for first home buyers who have been priced out of Sydney or Melbourne and were considering a move to a market like Brisbane or Perth for better value.

• Falling prices can widen your options: a lower entry price may bring properties that were previously out of reach back within your borrowing capacity.
• But falling prices do not guarantee falling repayments: if interest rates hold or rise while prices fall, the monthly cost of servicing a loan may not move as much as the purchase price suggests.
• Timing the exact bottom is difficult even for economists: forecasts get revised, as this one shows. Waiting for a specific price point carries its own risk of missing a window if conditions shift again.

What this means for first home buyers

A softer market is not automatically good or bad news for someone trying to buy their first home. It depends on your deposit timeline, your borrowing capacity, and how long you are able to wait. A few practical points to weigh up based on this update:

• If you are still building your deposit, a slower market may give you more time without feeling like prices are running away from you, though this is not guaranteed to continue.
• If you already have finance approval, check how long it remains valid. Approvals are usually time-limited, and a longer wait for the "right" price may mean reapplying under different conditions.
• Comparing renting against buying now, rather than assuming either option is automatically cheaper, can help you see how sensitive the decision is to further price movements in your target suburb.
• Total ownership costs, not just the purchase price, drive whether waiting actually saves you money once rent, stamp duty and holding costs are factored in.

Run the numbers

These tools can help you see how a softer market and your own finances interact, based on the assumptions you enter:

• Rent vs Buy Calculator - compare the cost of continuing to rent against buying now under different price and rate scenarios
• Borrowing Power Calculator - see how your maximum borrowing capacity looks today, and how it may shift if rates or your income change
• True Cost Calculator - map out the full cost of owning a home over time, beyond just the advertised purchase price