Australian Housing Market Faces Worst Downturn in Decades Amid High Interest Rates

Australia's housing market is facing its worst downturn in decades due to higher interest rates and deteriorating affordability.

National home values have fallen for six consecutive months, with the decline broadening across most capital cities as the Reserve Bank of Australia's tightening cycle flows through to mortgage borrowers.

Economists warn that prices could fall substantially further if borrowing costs remain elevated, potentially approaching a 15% drop from the market peak.

This would place the current downturn among Australia's most severe property corrections in around 40 years.

The higher interest rates have reduced household borrowing capacity and increased repayments for existing mortgage holders, particularly in Sydney and Brisbane where markets have been weaker.