News
Australia’s Wealthiest Suburbs Hit by Property Slump
House prices are falling fastest in some of Sydney and Melbourne's most affluent suburbs, with premium markets on the northern beaches and Mornington Peninsula leading declines as Australia's housing downturn gathers pace.
Australia’s housing market is undergoing its biggest housing price falls, and the fastest declines are occurring in some of Sydney’s northern beaches and Melbourne’s east side.
Increased interest rates and recent changes to negative gearing concessions and the capital gains tax discount have pressured buyer demand, driving clearance rates down. Last week, auction clearance rates slid to 47.4% across capitals, the lowest result since April 2020.
Property data firm Cotality found that the suburbs in Sydney and Melbourne’s top price quartile values are dropping the fastest.
Sydney Suburbs Record Sharp Fall
Sydney’s top quartile dropped 5.7% since October 2025.
The top quartile in Sydney has dropped by 5.7% since October 2025.
Suburbs Hit the Hardest:
- Terrey Hills: 22.3% decrease since 2021 to $2.69 million
- Bundeena: 20% fall to $1.47 million since 2022
- Waverley: down 15.9% from 2022 to $3.9 million
- Malabar: 15.6% down since 2025 to $3.06 million
- Kensington: down 15.5% since 2024 to $3.15 million
- North Curl Curl: down 15.1% since 2025 to $3.61 million
- Little Bay: 14.7% drop since 2024 to $2.57 million
- Bronte: 13.8% drop since 2022 to $5.65 million
- Avalon Beach: 13.7% drop since 2022 to $2.85 million
- Chifley 13.1% drop since 2025 to $2.49 million
Melbourne Prices Also Under Pressure
The top quartile in Melbourne has fallen 8.4% from its November 2021 peak.
The largest fall was for Flinders, on the Mornington Peninsula, with a drop of 31 per cent from the peak of $3.2 million to $2.3 million.
Here are other suburbs that saw major drops:
Cotality’s data for May reveals the steepest falls in peak prices among Melbourne suburbs:
- Flinders: 31% drop since 2021 to $2.26 million
- Tootgarook: 24.6% drop since 2022 to $870,000
- Rye: 23% drop since 2022 to $980,000
- Sorrento: 22.5% drop since 2022 to $1.84 million
- Blairgowrie: 22.3% drop since 2022 to $1.23 million
- St Andrews Beach: 20.8% drop since 2021 to $1.33 million
- Caulfield North: 19.2% drop since 2022 to $2.28 million
- Portsea: 18.8% drop since 2022 to $2.77 million
- Dromana: 18.6% drop since 2022 to $990,000
- Deepdene: 17.6% drop since 2024 to $3.06 million
Banks Are Cautioning More Price Decrements
Australia’s largest banks have cut their housing market outlook, each expecting Sydney’s and Melbourne’s biggest drops.
NAB predicts a 2% drop across capital city housing markets this year, led by 6% in Sydney and 7% in Melbourne.
According to industry modelling, a 7% drop would wipe out $100,000 from the value of a median Sydney home and around $75,000 from a Melbourne one.
Morgan Stanley predicts house prices at a national level will fall between 5 and 10% while SQM Research warns Sydney prices may fall up to 9% this year while Melbourne prices could drop as much as 7%.
According to SQM Research managing director Louis Christopher, final auction clearance rates were 31.9% in Sydney and 37.6% in Melbourne.
Economist and former Gillard government adviser Stephen Koukoulas warned that the current housing downturn could go down as one of the worst in decades. He said early days, but a 5-7% fall might not be enough to steady the market, and a hit above 10% will be ugly for the economy.
Source: Yahoo Finance AU
Follow Inspirepreneur Magazine for daily global business news.