Speed of market correction coming as shock to forecasters as mid-sized markets that powered the boom reverse hardest
Brisbane and Perth, the two capitals that carried Australia's house price boom into 2026, are now leading the downturn, according to the latest Housing Monitor from National Australia Bank (NAB).
Dwelling prices across the combined capitals fell for a seventh consecutive month in October 2026, leaving them about 8% below their March 2026 peak. NAB now expects a peak-to-trough decline of around 14%, up from 11% in its October 2026 forecast, with prices unlikely to find a floor before the second quarter of 2027.
The bank said the deeper forecast was driven by sharper-than-expected falls in Perth and Brisbane, partly reflecting downward revisions to earlier data.
From market leaders to biggest decliners
Six months ago, the two cities were heading the other way. In April 2026, as Sydney and Melbourne began to slip, Perth posted annual growth of 26% and Brisbane close to 20%.
NAB itself expected the mid-sized capitals to hold up. Its July 2026 housing forecast pencilled in peak-to-trough falls of just 2-4% for those markets. Brisbane and Perth are now both more than 8% below their recent peaks, after prices fell 2% in Brisbane and 1.7% in Perth in October alone.
The downturn has not so much eased as moved. Melbourne's monthly decline slowed to 0.8% in October, while Sydney remains about 10% below its peak.
The slowdown is already showing up in broker volumes. Sydney-based IN Mortgage settled approximately $305 million in loans between July and October 2026, down from $415 million over the same period in 2025, a fall of around 26.5%, founder William Xin told MPA.
“We’ve certainly felt the slowdown in our business,” Xin (pictured, below) said.
He also explained how a slower market exposes a fundamental weakness in the traditional broking model. “If your business relies heavily on constantly winning new clients, your growth becomes closely tied to market conditions. That’s why I believe an established loan book should be viewed as more than a source of trail income. It represents years of client relationships, trust and potential future business opportunities.”
Xin said his brokers are putting more emphasis on proactively engaging existing clients, understanding changes in their circumstances and identifying where they can add value. The business is also building its capabilities in commercial lending, business finance and integrated financial services.
“Importantly, customer retention isn’t something we’ve only started focusing on because the market has slowed,” he said. “It’s been part of our business model since we established XIN Mortgage in 2015.”
How quickly is buyer demand cooling in Brisbane and Perth?
The clearest sign of the turn is how long homes now sit unsold. Median days on market have roughly tripled in Brisbane and Perth since the start of 2026, albeit from historically low levels. Selling times are still lengthening nationally, though the trend is showing signs of levelling out in Melbourne.
Finance activity has pulled back too. Investor loan commitments fell by almost a third in the September quarter, while owner-occupier lending slipped about 5%. NAB said most of the drop came in June and July, with commitments continuing to trend lower through the quarter.
Bank economists converge on a deeper correction
NAB is not alone in rewriting its outlook for the former boom markets. Commonwealth Bank of Australia (CBA) senior economist Trent Saunders lifted CBA's forecast peak-to-trough falls for Brisbane and Perth to around 18%, from about 8% in September.
Saunders said underlying supply and demand in both cities remain supportive, but the speed of the reversal suggests overexuberance played a growing role as the upswing ran on. The Reserve Bank of Australia (RBA)'s November rate rise, its fifth of 2026, has added to the pressure.
The revisions show how far expectations have shifted. Earlier this year, NAB was tipping a national decline of around 7%.
