Dwelling values in Sydney and Melbourne have begun to fall.
According to Cotality’s dwelling values index, home prices in Sydney and Melbourne have declined by 0.1% so far in December (i.e., to 22 December 2025).
By contrast, dwelling values in Brisbane (1.1%), Perth (1.4%), and Adelaide (1.2%) have risen strongly so far in December.
The following chart from CBA provides a strong indication why Sydney’s and Melbourne’s dwelling values have fallen:
As you can see, Sydney and Melbourne listings are sitting above 5-year averages. Supply has also risen well above where it was three months ago and six months ago.
By contrast, supply remains constrained in Perth, Brisbane, and Adelaide, which are tracking well below five-year average levels. This constrained supply is feeding into their higher prices.
A surplus of homes for sale relative to buyer demand is the primary reason why Sydney and Melbourne home values are falling while the other major capitals are rising in value.
