Home values fall a seventh month while north Queensland holds

National home values fell 0.3 per cent in October, the seventh consecutive monthly decline, according to REA Group's Home Price Index, built on PropTrack data and released this week. The national median now sits at $871,000, 1.9 per cent below a year ago and 4.3 per cent under the March peak. For developers, builders and suppliers the more useful figure is the split inside Queensland: Brisbane houses are down an estimated $77,321 from peak, while Townsville posted a monthly rise and Cairns is still 5.3 per cent up on the year.

All figures below are the index owner's own reported numbers and have not been independently verified.

Brisbane houses have lost 6.3 per cent since March

Greater Brisbane's median dwelling value dropped 0.4 per cent in October to $1,014,000, which is 5.8 per cent, or $62,437, below peak after seven straight monthly falls. The buffer above the $1 million line is $14,000, and at the current pace the median would slip back into six figures around February 2027, earlier if another rate rise speeds the decline.

The Brisbane house median is $1,150,000, down 6.3 per cent from its March peak, and annual house growth has turned negative at minus 0.8 per cent. Nationally, houses have given up an average of $46,434 from their high point, so a typical Brisbane house owner is roughly $30,000 worse off than the national average.

The Gold Coast is carrying a peak-to-trough house loss of $51,946 on a median of about $1.39 million. REA Group senior economist Eleanor Creagh said the Gold Coast is more exposed to the affordability squeeze because its price point is so much higher than Cairns or Townsville.

Perth is 5.7 per cent below peak, and Adelaide recorded the largest monthly fall of any capital at 0.6 per cent, taking its dwelling median to $907,000. Creagh said the downturn began in Sydney and Melbourne but the steepest recent falls have shifted to Brisbane, Adelaide and Perth, where years of strong growth have worn away affordability.

Lower borrowing capacity is steering Brisbane buyers toward units

Brisbane units fell 0.3 per cent in October to $810,000 and are 4.8 per cent off peak, but they remain 3.2 per cent higher than a year ago, a gain of about $25,116.

Creagh's explanation is that four rate rises this year have cut borrowing capacity, and buyers who can no longer reach their original bracket are trading off dwelling type and location, so cheaper stock draws a wider pool of buyers. For apartment projects in Brisbane that is a modestly better end-value story than for house-and-land, at least on the index's own numbers.

Townsville and Cairns keep their annual gains

Townsville dwelling values rose 0.3 per cent in October to a median of $627,000, with houses up 0.4 per cent to $659,000 after a 0.6 per cent dip over the previous quarter. Annual growth for the Townsville SA4 is 6.2 per cent. Townsville units eased 0.1 per cent to $519,000 and are 11.3 per cent higher than a year ago.

Cairns edged lower in October, with dwellings down 0.12 per cent to $660,000, houses down 0.09 per cent to $740,000 and units down 0.21 per cent to $451,000. The annual picture is still positive: dwellings up 5.31 per cent, houses up 4.91 per cent and units up 6.54 per cent. The Cairns house peak-to-trough drop is $5,817, against $77,321 in Brisbane.

Creagh put Cairns' resilience down to its price advantage over south-east Queensland and the major capitals, constrained local supply and lifestyle demand, but said Cairns is not immune and further price weakness is likely there, particularly if rates rise again. For Townsville she credited relative affordability and local supply constraints, while noting momentum has moderated and the city is not detached from the wider headwinds. "A fifth interest rate increase would add further pressure to Queensland housing markets at a time when buyer demand is already weakening," she said.

Other regional Queensland markets lead the state on annual growth: Darling Downs-Maranoa is up 7.6 per cent to a $552,000 median, Toowoomba up 7.4 per cent to $798,000 and Central Queensland up 6 per cent to $607,000. Regional Queensland as a whole still dipped 0.2 per cent for the month.

Creagh says another rate rise would reinforce the downturn

The Reserve Bank has lifted the cash rate four times this year, in February, March, May and September, to its highest point in 15 years. Markets were pricing roughly an 80 per cent chance of a further 25 basis point rise at this week's board meeting, after Australian Bureau of Statistics data showed headline inflation had climbed to its highest level since March.

Creagh said a further increase would reinforce the downturn, cut borrowing capacity and lift repayments for existing borrowers, and that weaker conditions are likely to extend into 2027. She said spring had delivered more listings without the usual seasonal lift, with softer auctions, longer selling times and subdued sales.

The federal budget is a factor too. Negative gearing has been ended for established properties and the 50 per cent capital gains tax discount scrapped, and investors are reported to be shifting to regional areas with higher rental yields.

Falling end values strain Brisbane feasibilities

Ray White Group chief economist Nerida Conisbee set out the development consequence directly. "Lower established prices then make new development harder to stack up," she said, adding that if fewer projects proceed, fewer homes get built and the shortage deepens. "Established prices are falling, rents are still rising, new housing is becoming more expensive and approvals remain below the level Australia needs," she said.

In practice, south-east Queensland projects with end values set against 2025 comparables need to be re-run. Brisbane house medians are 6.3 per cent below March and still moving, so presale price lists, valuer comparables and gross realisation assumptions fixed before the correction may need updating before lender review. Apartment projects have more cover, with Brisbane units still ahead over the year, though units are now 4.8 per cent off their peak and still falling.

Townsville's monthly rise, Cairns' annual gain and the Toowoomba and Darling Downs numbers point to regional markets where lower entry prices leave buyers with more borrowing headroom. Creagh's caveat applies: momentum has moderated in both Cairns and Townsville, and another rate rise would test whether affordability can keep them resilient into 2027.

On the index numbers, south-east Queensland feasibilities priced on pre-correction comparables are worth re-testing against the October figures and a further rate rise, while Townsville, Cairns and Toowoomba are holding up better for now, though Creagh expects pressure there too. Project-specific decisions should be checked with a qualified valuer, quantity surveyor or financial adviser.