The House View: Declines Accelerating

Research evidence excerpt

The House View: Declines Accelerating

Idea

August 3, 2026 08:00 PM GMT

Morgan Stanley Australia Limited+MAustralia Macro+ | Asia Pacific Chris Read

Equity Strategist and Australia Economist

The House View: Declines Chris.Read@morganstanley.comChris Nicol +61 2 9770-1513

Equity Strategist

Chris.Nicol@morganstanley.com +61 3 9256-8909

Accelerating Antony Conte

Antony.Conte@morganstanley.com +61 2 9770-1544

National house prices fell -0.9%M in July, with annual growth Isabel Black

slowing to 3.9%Y. Sydney and Melbourne continue to lead the EquityIsabel.Black@morganstanley.comStrategist +61 2 9775-2519

downturn, however, both Perth and Brisbane are now slowing Morgan Stanley & Co. International plc+

from a stronger starting point. We expect further price declines Vasundhara Goel

as demand weakens from rate hikes and tax changes. StrategistVasundhara.Goel@morganstanley.com +44 20 7677-0693

Key Takeaways

On a %3m ann. basis, price growth in all cities is falling sharply, led by Sydney (-

13.2%) and Melbourne (-11.6%).

Turnover also continues to slow, with housing sales now down -20%Y. The

national auction clearance rate lifted slightly, however, remains near record low Exhibit 3 : Auction clearances are around

levels record low levels, suggesting accelerated price

Building approvals rose 7.2%M in June, however, gains were almost entirely declines in coming months

apartment led, with detached near flat. 85% national auction clearance rate (%)

80%

Rental conditions remain tight and sentiment weak – vacancy rates are still 75%

around record lows, while house price expectations continue to fall sharply. 70%

65%

60%

The correction has broadened: This month's data confirm the downturn is no 55%

50%

longer confined to Sydney and Melbourne.