Home Values Fall for 6th Month: What It Means for Your Loan
Home Values Fall for a Sixth Month: What It Means for Your Home Loan
If you’ve been watching the property market lately, you’ll know the mood has shifted. Cotality’s latest Home Value Index shows national home values fell 1.1% in September. That’s the sixth monthly fall in a row, and values now sit 5.2% below the March 2026 peak.
What’s happening around the country
Brisbane had the sharpest fall among the capitals at 1.5%. Sydney dropped 1.4% and Melbourne eased 0.7% .Over the three months to the end of September, 97% of capital-city suburbs recorded a decline in values, so this isn’t just a few pockets
But the market isn’t the same everywhere. Perth (10.1%) and Darwin (11.9%) are still up over the year. Regional areas are also holding up better, with values up 5.6% annually while the capitals are down 1.8% where you buy matters a lot right now.
Why buyers are stepping back
Higher interest rates, rising living costs and stretched affordability are keeping many buyers on the sidelines. Estimated home sales over the past three months are 19.1% lower than a year ago nationally. Total listings across the capitals are up 23.1%, and homes now take a median of 39 days to sell, compared with 23 a year ago.
Cheaper homes don’t always mean cheaper borrowing
This is where we see people get caught out. A lower purchase price may reduce the deposit and loan amount needed, but it does not automatically increase your borrowing capacity. Lenders still assess income, expenses, debts and interest-rate serviceability. Your income, your debts and your living costs all matter more than the headline price.
Before you go to open homes, check your numbers. Our borrowing capacity calculator is a good first step. Then talk to us about home loan pre-approval, so you know your limit before you fall in love with a place. Pre-approval is conditional and does not guarantee final loan approval. The lender may also need to accept the property’s valuation.
If you already have a home loan
Higher rates can put pressure on monthly repayments, while falling property values may affect your equity and refinancing options. Falling property values do not automatically increase your existing mortgage repayments. Repayments depend on factors including the loan balance, interest rate, remaining term and repayment structure. It’s worth reviewing your loan now, not later.
- Fixed or variable? Fixed-rate loans provide repayment certainty during the fixed period but may restrict extra repayments or involve break costs. Variable-rate loans can change with lender rate movements and often offer greater repayment flexibility.
- Thinking of refinancing? A lower property valuation can increase your loan-to-value ratio (LVR), potentially limiting refinancing options or triggering lenders mortgage insurance (LMI), depending on the lender and circumstances. Many Aussies are doing it.
You can also read our earlier post on HSBC’s property price forecast to see how it fits with these latest numbers.
Want to move forward with confidence? At OM Financials, we make the loan process simple and guide you every step of the way. Speak with us today to understand your borrowing power in this market. Book your free consultation or call us on 0478 876 967.
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