The Reserve Bank of Australia is widely expected to implement a fifth consecutive interest rate hike next week, pushing the official cash rate to a 15-year high. Research firm Cotality reports that this tightening cycle, coupled with earlier tax increases for property investors, has effectively stifled demand despite a persistent national shortage of new housing stock. The median Australian dwelling has shed approximately 63,400 Australian dollars in value since the market peaked in March.

While Sydney was long the epicenter of the cooling market, Brisbane and Perth are now experiencing the most aggressive contractions, with values sliding 2.0% and 1.7% respectively in October. Cotality research director Tim Lawless noted that mid-sized capitals are undergoing a sharp correction following years of extreme growth. Sales activity has plummeted alongside prices, with transaction volumes over the last three months tracking 23% lower than the same period last year. Despite the rapid retreat, Lawless suggests that many homeowners remain protected by substantial equity buffers built during the previous boom years.