'Impact across the board': Australia's housing downturn enters a new phase

The Southern Highlands property market has long attracted Australians seeking a tree-change — but Duncan Hill believes the NSW region has now become a prime buyer's market.

"We're definitely seeing a buying opportunity ... it's probably the best time that I've seen in the last five years," Hill told SBS News.

He founded Duncan Hill Property, based in the Southern Highlands town of Bowral, in 2013. Since then, Hill has witnessed changes to the regional housing market .

"We did see [housing price] growth of about 30 per cent over the last five years, but then it's declined now by about two to three per cent over the last 12 months."

That shift is consistent with Cotality's latest quarterly regional market update, which found Australia's housing market downturn is no longer confined to capital cities.

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The property analytics firm examined Australia's 50 largest non-capital regional markets in the three months to July 2026. It found that regional dwelling values declined modestly by 0.1 per cent, compared with a 2.5 per cent fall across the combined capital cities over the same period.

Of the 50 markets analysed, Cotality found that 47 significant urban areas had slower growth, while 22 recorded a decline in home values.

The update did note that regional markets remained more resilient to change and typically outperformed capital cities.

Gerard Burg, head of research at Cotality Australia, said the results speak to recent pressures that have built up in the national housing market.

"A lot of buyers have been pushed out by the affordability pressures and by the increases in interest rates that we've seen so far," Burg told SBS News.

The Reserve Bank of Australia (RBA) has raised interest rates three times this year as it attempts to bring inflation back towards the midpoint of its 2-3 per cent target range. At its most recent meeting, the RBA board unanimously decided to keep interest rates on hold at 4.35 per cent.

But Burg believes recent rate hikes, compounded by a cost of living crisis , mean "fewer buyers nationally [are] ready to make a purchase".

"We're seeing this reduced level of competition. We've seen houses on the market for longer, and buyers who remain in the market now have more ability to negotiate, and that's leading to this situation where values are starting to push lower."