Capital City Markets Diverge, As RBA Increases Rates

The 30-Second VersionMelbourne continues to show the clearest moderation in its housing correction and is moving from Stagnation into Early Recovery.Sydney’s short-term momentum has deteriorated again, placing it in Stagnation but moving towards Downturn, while Perth remains in Stagnation despite renewed short-term weakness.Brisbane remains firmly in Downturn, and Adelaide’s Downturn is accelerating.Four-week moving averages are now Sydney -0.33%, Melbourne -0.18%, Brisbane -0.32%, Adelaide -0.31% and Perth -0.28%.The RBA's 25-basis-point increase to 4.60%, higher borrowing costs, becomes a major test of the current direction of all five housing markets, with market pricing also pointing to the risk of further tightening.Big PictureAustralia’s five major housing markets are now positioned at distinctly different stages of the housing cycle. Melbourne is providing the clearest evidence that its rate of decline is moderating, while Sydney’s earlier improvement has begun to reverse. Brisbane remains firmly in Downturn, Adelaide’s correction is accelerating, and Perth remains in Stagnation despite a renewed deterioration in recent price momentum.The interest-rate environment has also become a substantially greater headwind. Assuming the RBA increases the cash rate by 25 basis points to 4.60 per cent at its September meeting, the tightening cycle will extend at a time when dwelling prices are already falling across all five capitals. Furthermore, market pricing as at 28 September also points to the possibility of further tightening beyond September. The direction of the pressure on housing demand is clear, but the magnitude of the price response remains uncertain.SydneyStagnation, Moving Towards DownturnWeekly Change: -0.36%. 4-Week Moving Average: -0.33%. Price: Approximately $1.180 million, down about $4,250 in the week. 2026 Cumulative Growth: -8.2%.Sydney has now recorded 29 consecutive weekly declines. Weekly falls have increased from 0.30 per cent to 0.33 per cent and then 0.36 per cent over the past three observations, while the four-week moving average has deteriorated from negative 0.31 per cent to negative 0.33 per cent over the past two weeks. This represents a reversal of some of the improvement evident through August and early September and provides early evidence that Sydney may be moving from Stagnation back towards Downturn. MelbourneStagnation to Early RecoveryWeekly Change: -0.15%. 4-Week Moving Average: improved to -0.18%. Price: Approximately $770,200, down about $1,150 in the week. 2026 Cumulative Growth: -7.1%.Melbourne continues to provide the clearest evidence that the correction is moderating. The four-week moving average has improved from around negative 0.37 per cent in mid-July to negative 0.18 per cent, its strongest reading since late May. Prices are still falling, but the sustained improvement in recent price momentum is consistent with Melbourne moving from Stagnation into the early stages of Recovery.BrisbaneFirmly in DownturnWeekly Change: -0.30%. 4-Week Moving average: -0.32%. Price: Approximately $1.051 million, down about $3,200 in the week. 2026 Cumulative Growth: +1.4%.The latest weekly decline was smaller than the previous two declines of 0.41 per cent and 0.43 per cent, but a single observation provides little evidence of a change in direction. The four-week moving average remains weak at negative 0.32 per cent, compared with approximately negative 0.17 per cent in late August. Brisbane, therefore, remains firmly in Downturn, with its remaining 2026 price gain likely to be erased in around four to five weeks if the current rate of decline persists. AdelaideDownturn AcceleratingWeekly Change: -0.32%. 4-Week Moving Average: deteriorated to -0.31%. Price: Approximately $919,300, down about $2,900 in the week. 2026 Cumulative Growth: +1.9%.Adelaide’s latest fall was smaller than the previous week’s 0.52 per cent decline, but the four-week moving average deteriorated further to negative 0.31 per cent, its weakest level of 2026. This compares with approximately negative 0.16 per cent in late August and confirms a substantial deterioration in recent price momentum. Adelaide’s remaining 2026 price gain has fallen to just 1.9 per cent, providing increasingly clear evidence that its Downturn is accelerating.PerthStagnationWeekly Change: -0.41%. 4-Week Moving Average: deteriorated to -0.28%. Price: Approximately $969,000, down about $4,000 in the week. 2026 Cumulative Growth: +3.0%.Perth recorded its largest weekly decline of 2026 and has now experienced 20 consecutive weekly falls. The four-week moving average has deteriorated from around negative 0.18 per cent in late August to negative 0.28 per cent, reversing the earlier improvement in price momentum. Perth, therefore, remains in Stagnation, although the latest deterioration provides increasing evidence that downward pressure is strengthening and places the market at greater risk of moving back towards Downturn. What to Watch NextWhether Melbourne’s improvement can survive higher borrowing costs or whether its movement into Early Recovery stalls.Whether Sydney’s recent deterioration becomes sustained and pushes the market more clearly from Stagnation towards Downturn.Whether Brisbane and Adelaide experience a deeper Downturn as tighter monetary conditions place additional pressure on buyer demand.Whether Perth’s renewed short-term deterioration in short-term price momentum continues and begins to push the market from Stagnation towards Downturn.Whether financial-market pricing for further monetary tightening beyond September strengthens or recedes as new inflation and labour-market data become available.