Investment Report – September 2026

Australia’s housing market has moved decisively into a different phase of the property cycle, with all five major capital cities now recording negative monthly price growth and prices below their 2026 peaks.

Price Growth: Downturn Spreads Across All Capitals

Annual growth has weakened everywhere. Perth remains Australia’s strongest-performing capital city, recording annual growth of approximately 18% at the end of August, representing a substantial decline from around 23% at the end of July and a peak of approximately 25% during April and May. Brisbane has fallen from around 18% at its April peak to approximately 11%, while Adelaide has declined from around 12% to 9%. 

Sydney and Melbourne have moved further into negative annual growth. Growth rates have fallen by approximately -4%, converging despite Melbourne entering the downturn earlier.

Vacancy Rates, Rents and Rental Yields: Diverging Market Conditions

Rental conditions are diverging. Sydney’s vacancy rate has increased for four consecutive months to reach 1.7%, with Melbourne at 1.8%. The simultaneous increase across Australia’s two largest housing markets suggests rental conditions are becoming less constrained, although vacancy rates remain low by historical standards.

Brisbane, Adelaide and Perth present a markedly different picture. Brisbane’s vacancy rate has remained between 0.8 and 0.9% throughout 2026, while Adelaide has remained between 0.7 and 0.8%. Perth continues to record the tightest rental conditions, fluctuating between just 0.5 and 0.7%.

Sydney’s weekly rent has fallen to $910 after peaking at $923 in June. Melbourne, Brisbane, Adelaide and Perth show slowing rather than negative growth. Melbourne has experienced the greatest improvement, with the highest rental yield of the five capitals, at 4.65%, alongside the lowest entry price.

Investor Activity and Macroeconomic Outlook: Lending Drops as Rates Stabilise

Investor participation has fallen sharply. New investor loan commitments across the five major states fell from 56,392 in the March quarter to 49,181 in the June quarter, a decline of 12.8%. New South Wales recorded the largest proportional fall of 15.5%, representing 2,683 fewer investor loans, followed by Victoria, where lending declined by 14.2%, or 2,086 loans.

Average new investor loan values increased in every state, indicating fewer investors rather than smaller loans. Headline inflation has fallen steadily from 4.6% in March to 3.5% in July, while the trimmed mean has held at 3.6% and markets fully price an unchanged cash rate in September.

Download the Full September 2026 Investment Report

To learn more about investor activity, market trends and economic drivers across Australia’s five major capital cities in September, download the investment report now.