Australian home prices drop 0.4% in June, largest since 2022

Australian home prices recorded their sharpest monthly fall in more than three years in June, led by significant declines in Sydney and Melbourne as rising interest rates and recent federal tax changes dampened market activity. Data released on Wednesday showed the national median dwelling value fell by 0.4 percent, the largest month-on-month drop since December 2022.

Sydney led the downturn with a 1.2 percent decline, while Melbourne prices fell 1.3 percent. Brisbane and Perth saw much slower growth of 0.3 percent and 0.7 percent respectively, and Adelaide prices were flat. The national index has now declined for three consecutive months, marking a clear slowdown from the rapid growth seen over the past year.

The cooling market follows three interest rate increases by the Reserve Bank of Australia between February and May, which lifted the cash rate to 4.35 percent. Analysts said affordability pressures were already weighing on demand before the federal budget in May introduced changes to negative gearing and capital gains tax concessions for property investors.

Housing Minister Clare O'Neil defended the government's policy, stating the Treasury modelling indicated the tax...