Home sales are down 20.9 per cent on a year ago, and almost nobody is asking what that does to the price numbers you are reading.
Cotality estimates about 39,747 homes changed hands nationally in September 2026. That is the ninth straight month below the prior year. Over the same stretch, national values have fallen for six months in a row. Volumes started sliding before prices did, and that order matters.
A price index is only as good as the sales behind it
Home value indices are built from completed sales. When roughly one in five fewer deals happen, the index is working from a thinner and less representative sample. The sales that do close tend to come from motivated sellers and buyers who have already adjusted their expectations. Those who would rather wait simply stay out of the data.
That is the catch. A market can look orderly in the index while a large pool of would-be sellers sits on the sidelines, unwilling to accept today’s prices. The index reports what cleared, not what failed to clear. If the stalled sellers are eventually forced to transact, through a fixed-rate roll-off, a job change or a life event, the index can reprice sharply in a short window.
Key numbers
- Sales in September 2026: about 39,747, down 20.9% annually
- Median time to sell (three months to September): 41 days, versus 26 a year earlier
- Capital city vendor discount: a record 4.4% median
- Mortgage enquiries in September: down 19.2% annually, the lowest since October 2022
Where the borrowing power went
Cotality’s research finds that rate hikes have cut borrowing power by around $90,000. That is the mechanical link to the volume drop. A buyer who could have stretched to a given price last year now qualifies for a meaningfully lower one, and the sellers’ asking prices have not all caught up.
The credit bureau data points the same way. Mortgage enquiries fell 19.2 per cent annually in September, and first-home buyer enquiries fell by more than 22 per cent. Enquiries lead settlements, so this is not a one-month blip that will vanish next quarter.
Cotality’s research director also notes a behavioural layer on top of the arithmetic. Some buyers who could still afford to purchase are holding back because they fear bigger repayments and further price falls. Fear is not captured in a serviceability calculator, but it removes buyers just as effectively. For more on how the maths works, see our guide to RBA rates and repayments and our look at which states lose most borrowing capacity.
Stock is building while demand shrinks
Over the month to mid-October, new listings ran 7.9 per cent below the same period last year and 11.9 per cent under the five-year norm. That looks like sellers pulling back. But total advertised stock rose 19.1 per cent to 145,573, because homes are not selling and are sitting on the market instead of coming off it.
The split by city is stark. Brisbane and Perth listings jumped 60.4 per cent and 64.7 per cent respectively, and selling times in both more than doubled. Faster stock growth plus slower sales is the classic setup for negotiating room. Our recent piece on buyer negotiating power covers what that looks like on the ground, and the record 4.4 per cent capital city discount shows sellers are already conceding it.
Why reading the price line alone is risky
Here is a rule of thumb: when volumes fall faster than values, treat the price figure as a lagging indicator. Three things tend to follow.
- Discounting shows up before indices do. Time on market and vendor discounts move first, because they capture deals in progress rather than settled ones.
- The next price print can overstate stability. If only the most flexible sellers are transacting, the average sale looks resilient.
- A forced-seller wave can change the picture fast. The longer stock sits, the more pressure builds on those who cannot wait.
None of this guarantees a deeper fall. Rates could ease, buyers could return, and listings could dry up. But the combination of 41-day selling times, a record discount and the weakest mortgage enquiries since 2022 suggests the adjustment is further along than headline values imply.
What to watch in the next fortnight
Two events decide the mood. September-quarter inflation lands on 28 October, and the central bank meets on 3 November, where further hikes remain on the table. A hot inflation print would reinforce the borrowing power squeeze and keep sidelined buyers sidelined.
If you are buying, track days on market and the gap between asking and sale price in your target suburb, not just the monthly value change. If you are selling, price to the buyers who actually exist at today’s lending limits. If you hold a mortgage, test your repayments against another rate rise now, rather than after the decision is made. For deeper context on agent behaviour this season, read our analysis of the spring market shift.
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General info, not financial advice.
