Australian dwelling values kept falling in October, and auction clearances have dropped to levels last seen in the early months of COVID. The numbers matter for anyone working with equity, LVRs, residual stock or refinance and development funding, because softer values and slower exits change the buffers that credit decisions rely on.
How far values have fallen
Cotality's national Home Value Index fell 1.2 per cent in October, the seventh consecutive monthly decline. National dwelling values are now 6.7 per cent below the March peak, about $63,400 off the median, with the median national dwelling at $884,855. Combined capital city values are down 8.1 per cent in seven months. Cotality said the speed of the decline is tracking at the fastest pace in 40 years. The previous combined capital peak to trough of about 8.2 per cent ran from 2017 to 2019.
The Reserve Bank's November Statement on Monetary Policy put national housing prices 4.7 per cent below peak in September, and called it one of the steepest downturns in 50 years. That figure is an earlier month than Cotality's October reading. Both point the same way: prices have fallen a long way from the March high, and the fall has been fast.
Clearances are at early COVID levels
For the week ending 1 November, Cotality put the combined capitals weighted clearance rate at 40.7 per cent, the lowest since mid April 2020, when it was 30.2 per cent. The prior week was 43.6 per cent. The same week a year earlier was 65.8 per cent. It was the seventh consecutive week below 50 per cent.
Brisbane cleared 23.8 per cent, the lowest of the capitals and below 30 per cent for five weeks. Sydney was 45.1 per cent, Melbourne 44.3 per cent and Adelaide 35.4 per cent. There were 1,713 auctions. Weak clearances sit alongside slower private treaty selling. Cotality's October update put median time on market at 39 days, the highest since August 2020, and vendor discounting at 4.7 per cent, the largest since May 2019. Sales over the past three months were 23 per cent below a year earlier and 18 per cent below the five year average.
Rates and borrowing capacity
The Reserve Bank raised the cash rate to 4.85 per cent on 3 November, the fifth hike of 2026 and the highest since late 2008. Cotality estimated that for an average owner occupier mortgage of about $742,000 in the June quarter, repayments were around $600 a month, or 14 per cent, higher than in January. It also put the borrowing capacity of a median income household about $88,000, or 12 per cent, lower than at the start of the year.
Sales volumes for the combined capitals in the three months to October were almost 26 per cent lower than a year earlier. The Reserve Bank said new housing loan commitments were 27 per cent below their November 2025 peak. Higher rates and the budget tax changes for investors are both in the bank's account of why housing activity has softened.
What this means for equity and exits
Softer values cut into equity buffers. A facility sized against a March valuation has less LVR headroom once the as is value has moved lower. That shows up in refinance, top ups and any structure that depends on a current valuation rather than a peak figure.
Weak clearances and longer selling times stretch residual stock exits. Projects that assumed a quick sale or a firm presale conversion now need more time, and more holding cost, to get out. Construction and bridging facilities that rely on an orderly exit are exposed to that delay even when the build itself is on track.
None of this is a call to buy or sell. It is a reason to treat as is and as if valuations, and the timing of refinance and development funding, as current numbers rather than March peak numbers. Exit plans that worked when clearances were in the mid 60s need more room when clearances are around 40 per cent.
How I read it
The housing story in late 2026 is not only about the pipeline of homes under construction. It is also about established values falling quickly and auctions clearing slowly. Those two facts change the equity cushion on existing assets and the time it takes to sell finished stock.
I would watch whether clearances stay below 50 per cent, whether time on market keeps rising, and whether the next Cotality and Reserve Bank updates show the capital city peak to trough moving past the 2017 to 2019 mark. For credit work, the useful question is whether the valuation and exit assumptions in a pack still match what the market is actually clearing.
None of this is a recommendation to borrow, lend, invest or sell. Everyone's position is different.
Sources
Cotality, Final Clearance Rates, week ending 1 November 2026 (5 Nov 2026)
Cotality, Housing markets set to weaken further as RBA hikes again in November (3 Nov 2026)
Reserve Bank of Australia, Statement on Monetary Policy November 2026, Economic Conditions
Reserve Bank of Australia, Statement on Monetary Policy November 2026, Financial Conditions
Personal views, not financial advice.
Key questions
How far have Australian house prices fallen in 2026?
Cotality's national Home Value Index was down 1.2 per cent in October 2026, the seventh consecutive monthly fall. National dwelling values were 6.7 per cent below the March peak, about $63,400 off the median, with the median national dwelling at $884,855. Combined capital city values were down 8.1 per cent in seven months. Cotality said the speed of the decline was tracking at the fastest pace in 40 years, close to the previous combined capital peak to trough of about 8.2 per cent in 2017 to 2019. Separately, the Reserve Bank said national housing prices were 4.7 per cent below peak in September, one of the steepest downturns in 50 years. The two figures cover different months and different measures.
How weak are auction clearance rates?
For the week ending 1 November 2026, Cotality reported a combined capitals weighted clearance rate of 40.7 per cent, the lowest since mid April 2020 when it was 30.2 per cent. The prior week was 43.6 per cent and the same week a year earlier was 65.8 per cent. It was the seventh consecutive week below 50 per cent. Brisbane cleared 23.8 per cent, the lowest capital and below 30 per cent for five weeks. Sydney was 45.1 per cent, Melbourne 44.3 per cent and Adelaide 35.4 per cent, across 1,713 auctions.
How have higher rates affected buyers?
After the Reserve Bank raised the cash rate to 4.85 per cent on 3 November 2026, the fifth hike of 2026 and the highest since late 2008, Cotality estimated that for an average owner occupier mortgage of about $742,000 in the June quarter, repayments were around $600 a month, or 14 per cent, higher than in January. It also estimated the borrowing capacity of a median income household was about $88,000, or 12 per cent, lower than at the start of the year. Sales volumes for the combined capitals in the three months to October were almost 26 per cent lower than a year earlier. The Reserve Bank said new housing loan commitments were 27 per cent below their November 2025 peak.
What do softer values and weak clearances mean for property credit?
Softer values reduce equity buffers and LVR headroom on existing and refinance facilities. Weak clearances and longer selling times mean residual stock and planned exits take longer, which matters for construction and bridging facilities that rely on an orderly sale or refinance. The practical response is to use realistic as is and as if valuations and exit timing, not to treat the March peak as the current base. This is a description of market conditions, not advice to buy, sell, borrow or refinance.
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