Housing approvals and property prices on the downturn

The downturn was driven by a fall in approvals for houses, down 4.2 per cent for the month after a rise in June, while all other private dwellings, such as apartments and townhouses, dropped by 0.4 per cent.

However, the bureau's head of construction statistics Daniel Rossi said the decline may not all be bad news.

"While private sector houses were down 4.2 per cent, this came off June, which had the most approved since September 2021," he said.

"In year-on-year terms, the result is 6.0 per cent higher than July 2025."

Nevertheless, a fall in approvals would make the federal government's housing targets more difficult to achieve.

The government had set a target of 1.2 million new homes built by June 2029, but is behind schedule.

It comes as falls in property prices in major markets are continuing, with data from Cotality showing its home value index fell by 0.9 per cent in August

The data firm showed the median property now costs $912,885, with 93 per cent of suburbs across Australia having a decline in value for the month.

The only capital city with a rise in prices was Darwin, at 0.6 per cent, though the median value remains the cheapest in the nation at $647,000.

The Middle East conflict, interest rate hikes and federal changes to capital gains tax and negative gearing have taken some sting out of the market for purchasers. 

Sydney led the downturn for capital cities with a 1.4 per cent decrease across the month, bringing the median property price to $1.2 million. 

Canberra and Melbourne values went down by 1.1 per cent, and Brisbane by one per cent. 

But first home buyers trying to purchase in cheaper areas might be waiting several months for values to fall to levels they can afford, Cotality head of research Gerard Berg said. 

While there were outliers in each city, there was a trend toward outer suburbs recording higher growth than their more expensive, inner city counterparts in the year to August.

"The downturn commenced among the highest value suburbs initially. We have seen a slower spread across the other parts of cities," Mr Berg said. 

Shadow treasurer Tim Wilson said rising inflation and budget changes to property concessions had led to the decline.

"The Albanese active inflation agenda that is forcing the hand of the RBA is killing home values," he said.

"Australian families already struggling to pay their bills are now sitting at the kitchen table watching the value of their biggest asset, their family home, fall through the floor."

The high number of suburbs in price decline during August suggested the areas young buyers have their eyes on will soon change too.

Mr Berg said first home buyers who were able to make a purchase but lacked confidence should seriously consider doing so while limited buyers are around. 

"Being such a high value purchase, you need to be confident you are making the right decision," he said. 

"But if you are looking to hold the property for an extended period of time, you don't want to try and pick the bottom of the cycle. You almost certainly won't find that exact point."