Australian dwelling values could finish this decade below their 2025 peak under a “most probable” scenario that puts housing supply and unemployment at the centre of price movements, according to analysis reported by The Sydney Morning Herald.
Money.com.au commissioned Primara Research to model how the national market might evolve to 2030 under different combinations of labour market conditions, interest rates, and supply growth.
If unemployment climbed to 4.6% by mid‑2030, the Reserve Bank delivered three more rate rises and new supply grew at a medium pace, average dwelling prices would fall around 11% from December 2025 levels by the end of the decade.
Primara’s baseline scenario has national average values rising about 4.9% from December 2025 to a June 2027 peak of $1,127,000 before declining 15.4% to $953,000 by December 2030.
Head of research and data Peter Drennan (pictured) noted that “the December 2023 average dwelling price figure was $949,000, and then in March 2024 it was $962,000, so the predicted figure for the end of 2030 sits in between those.” That implies, he said, that “anyone from the start of 2024 onwards will have theoretically bought at a price that now could be higher than the $953,000 projected price.”
The modelling places housing supply as the key lever but treats unemployment as the “more statistically reliable predictor of dwelling price changes”.
Primara’s work comes as the market diverges. National values rose over the first quarter of 2026, driven by mid‑sized capitals such as Perth and Brisbane, while Sydney and Melbourne have slipped as affordability constraints and higher living costs sideline buyers.
History suggests sizeable corrections are relatively rare: Primara’s analysis of ABS data finds only two meaningful downturns in 14 years – a 4.3% drop over six months in 2022 and a 6.3% fall spread over five quarters to 2019.
Major lenders are more cautious than outright bearish. Commonwealth Bank senior economist Trent Saunders told the Herald the bank expects a slowdown rather than reversal, forecasting national prices to rise 5% in 2026 and 3% in 2027.
“We’re not expecting price falls,” Saunders said, pointing to a “strong fundamental basis” in the form of tight rental markets and the overhang from past undersupply.
ANZ has trimmed its capital‑city forecasts and now sees gains of 2.8% in 2026 and 2.1% in 2027, with “small falls” expected in Sydney and Melbourne. AMP chief economist Shane Oliver also warned that higher rates, weaker growth, and war‑related uncertainty could trigger “another cyclical downswing”, with the two largest cities already experiencing modest declines and momentum slowing in the mid‑sized capitals.
The rate path remains a key swing factor. With just over a week until the next cash rate decision and the target already at 4.1%, Compare the Market economic director David Koch argues the RBA should now pause, warning that consumer confidence has “plunged” and business confidence is close to record lows.
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