National Home Prices Fall: PropTrack April 2026

For the first time in 2026, Australian home prices fell nationally. PropTrack's April Home Price Index recorded a 0.1 per cent decline in national values, marking a genuine turning point in the housing cycle and prompting a wave of analysis from economists and major banks about what comes next. For first home buyers, the shift raises a question worth a straight answer: does a falling market make it easier or harder to buy?

What PropTrack's April 2026 data shows

National home prices fell 0.1 per cent in April, the first monthly decline recorded in 2026. Capital city values were down 0.2 per cent for the month, with the median capital city home now sitting at $1,017,000 and the national median at approximately $910,000.

Sydney fell 0.5 per cent over April, continuing a period of softening that has built through the year. Melbourne dropped 0.3 per cent. Both cities are now firmly in early-stage decline territory after three consecutive rate hikes pushed the cash rate to 4.35 per cent.

Not all cities are moving in the same direction. Brisbane, Adelaide and Perth each recorded gains of 0.2 per cent in April. Perth's annual growth remains exceptional at roughly 22 per cent above year-ago levels, driven by strong interstate migration and constrained new supply. The gap between Australia's largest and mid-sized cities is as pronounced as it has been at any point in recent years.

Within the data, there is a meaningful split between houses and units. Capital city house prices fell 0.2 per cent in April, while unit prices were flat. Buyers are shifting toward more affordable stock - units, townhouses and smaller dwellings - as borrowing capacity remains constrained at the current serviceability rate lenders apply.

Why prices are falling now

Three rate hikes in 2026 - February, March and May - have pushed the cash rate to 4.35 per cent. Lenders assess repayment capacity at roughly three percentage points above the loan rate, so the effective rate borrowers are tested against is around 7.35 per cent. That floor has meaningfully reduced what most households can borrow compared to 18 months ago.

Two other forces are compounding the effect of rates. Auction clearance rates across the combined capitals have stayed below the 60 per cent benchmark for six of the last eight weeks, a level that historically reflects buyer hesitation rather than competition. Vendor discounting has risen to a national median of 3.1 per cent, meaning properties are settling further below their listed prices than at any point in the past year.

The federal budget's property tax changes are also reshaping the investor landscape. From July 2027, negative gearing on established residential properties purchased after Budget night on May 12 will be limited to offsetting rental income only, and the 50 per cent capital gains tax discount will be replaced by cost-base indexation with a 30 per cent minimum tax on gains above inflation. Some investors who were considering established property purchases are pausing to reassess, reducing competitive demand in segments where first home buyers also search.

What the major forecasters expect next

ANZ has revised its 2026 capital city price forecast down from 4.8 per cent growth to 2.8 per cent, and specifically projects Sydney prices to fall 0.7 per cent and Melbourne prices to fall 1.7 per cent across the full year. ANZ's research team expects both cities to rebound in 2027, with Melbourne forecast to lead national growth at 2.9 per cent and Sydney at 2.6 per cent, as lower rates and pent-up demand eventually return.

Morgan Stanley has put forward a more significant forecast. The investment bank estimates Australian house prices could fall between 5 per cent and 10 per cent, pointing specifically to the budget's negative gearing and CGT changes as fundamentally altering how investors assess residential property. The bank described the changes as "meaningfully challenging" the previous model of leveraged established property investment, while noting that owner-occupier and new-build demand would absorb some of the investor pullback.

CBA economists take a more moderate view, expecting rates to hold steady for the rest of 2026 after the May hike. If June 16 passes without another increase, buyer confidence may begin to recover before the end of the year, limiting the depth of any price falls in markets beyond Sydney and Melbourne.

What falling prices mean for first home buyers

A market turning lower is not automatically good news for first home buyers - but there are practical shifts worth understanding if you are actively looking.

• Less investor competition on established homes. Budget changes mean some investors are stepping back from the established market, particularly in Sydney and Melbourne. Buyers searching in those cities are reporting more room to negotiate on price and conditions than at any point in the past two years.
• Units may represent better relative value right now. Flat unit prices against falling house prices reflects demand shifting toward more affordable stock. For buyers who are flexible on property type, comparing units and townhouses alongside houses is worth the time.
• Scheme price caps are within reach for more buyers. Most government first home buyer programs cap the eligible property price at set thresholds. As values fall in Sydney and Melbourne, properties that were above scheme caps six months ago are starting to come within range - particularly in middle and outer ring suburbs.
• Your borrowing capacity figure may need updating. If your estimate is from before February 2026, it likely overstates what lenders will approve today. Three hikes have materially shifted what the serviceability buffer allows. Before treating falling prices as a window to act, confirm your current ceiling with a mortgage broker.
• Rate direction matters as much as price direction. The next RBA decision is June 16. Three of the four major banks currently forecast a pause. If rates hold steady, borrowing capacity stabilises and the practical value of falling prices becomes clearer. A further hike would partially offset affordability gains from lower property values.

Run the numbers

Use these tools to work through what the current price and rate environment means for your specific situation:

• Borrowing Power Calculator - get an updated estimate of your current maximum loan size at 4.35 per cent, so you know what falling prices actually mean in terms of what you can realistically afford to buy.
• Interest Rate Shock Tester - model your monthly repayments if June 16 delivers another hike or a pause, and understand the repayment range your budget can comfortably sustain before committing to a purchase price.
• Rent vs Buy Calculator - compare the costs of renting for another 12 months while prices soften further against buying now with current rates, across a range of price and rate scenarios.
• Grant Stacker - check which federal and state first home buyer schemes you may be eligible for, as scheme price caps are now within reach for a broader range of buyers in markets where values have pulled back.