Domain, a leading real estate platform, has released housing price forecasts indicating that Sydney and Melbourne are expected to lead price drops as the market cools. According to their projections, the typical Sydney house could lose up to $122,000 in value over the next year, while Melbourne's median house price may fall below $1 million.
The forecasts are based on current market trends, including rising interest rates and reduced buyer demand. Domain's analysis suggests that these factors are contributing to a broader slowdown in Australia's housing market, with Sydney and Melbourne being the most affected due to their higher price points.
As of June 2026, the median house price in Sydney is approximately $1.5 million, while Melbourne's median is around $1.05 million. The predicted drops would bring Sydney's median to about $1.38 million and Melbourne's to below $1 million, marking a significant shift from recent years of strong growth.
Domain's report also notes that other capital cities may experience more moderate declines, but Sydney and Melbourne are expected to see the largest corrections. The forecasts are subject to change based on economic conditions and policy decisions.
