Key Highlights

  • Only Darwin and Hobart recorded rising home values in October.
  • Darwin's annual gain of 9.7% leads the capitals.
  • Sydney values fell 9.4% over the year to October.
  • Paper gains and losses matter for tax when a property is later sold.

Australia's housing downturn is now almost everywhere, but not quite. Of the eight Capital cities, only Darwin and Hobart recorded rising home values in October, according to reports. Darwin leads the country with a 9.7% annual gain, while Sydney values are 9.4% lower than a year ago. For owners and investors, the split matters for more than bragging rights: it shapes paper gains, paper losses and how they are treated for tax.

The figures come from the November Home Value Index, released on 2 November and covering October.

The October scoreboard

Darwin values rose 0.6% in October and Hobart 0.5%. Every other capital fell, according to reports:

  • Canberra: −0.7%
  • Melbourne: −0.8%
  • Adelaide: −1.2%
  • Sydney: −1.6%
  • Perth: −1.7%
  • Brisbane: −2.0%

National values fell 1.2%, the seventh monthly decline in a row, and the combined capitals fell 1.4%.

Regional markets have done better than the capitals over the year. Combined regional values are up 3.4% over 12 months, against a 4.8% fall for the combined capitals, although regional values also slipped 0.7% in October. Regional WA leads, with an 11.0% annual rise.

Even the two risers are not immune. Over the three months to October, Darwin values were down 0.2% and Hobart 0.3%, so October's gains came after earlier softness.

The annual picture: from +9.7% to −9.4%

Over 12 months, the figures show a wide spread between capitals:

  • Darwin: +9.7%
  • Hobart: +5.5%
  • Perth: +3.9%
  • Adelaide: +3.7%
  • Brisbane: +0.4%
  • Canberra: −3.7%
  • Melbourne: −7.6%
  • Sydney: −9.4%

Applied to the median values the index reports, the gap is stark. Darwin's median of $641,873 implies a rise of roughly $57,000 over the year. Sydney's median of $1,178,959 implies a fall of roughly $122,000.

Perth and Brisbane show how quickly the picture has turned. Both are still higher than a year ago, yet Brisbane values fell 6.1% over the past three months and Perth 5.7%.

Total returns: rent lifts every city, but the order holds

The index also reports total returns, which add rental income to the change in value. On that measure:

  • Darwin: 16.6%
  • Hobart: 10.5%
  • Perth: 8.0%
  • Adelaide: 7.5%
  • Brisbane: 3.9%
  • Canberra: 0.4%
  • Melbourne: −4.1%
  • Sydney: −6.5%

Darwin's lead widens because it also has the highest gross Yield of the capitals, at 6.4%. Sydney's rent helps, but its 3.5% yield is not enough to offset the fall in value.

These are gross returns. They do not account for interest, holding costs, Transaction Costs or tax.

How far each city is from its peak

The figures show how far each market sits below its most recent high:

  • Darwin: 0.2% below its July 2026 peak
  • Hobart: 1.5% below its March 2022 peak
  • Adelaide: 4.4% below its May 2026 peak
  • Canberra: 6.9% below its May 2022 peak
  • Melbourne: 8.2% below its March 2022 peak
  • Brisbane: 8.3% below its May 2026 peak
  • Perth: 8.9% below its April 2026 peak
  • Sydney: 10.1% below its February 2026 peak

Longer-run figures put Darwin's surge in context. the data show Darwin values up 32.9% over ten years, the smallest ten-year gain of any capital apart from Melbourne's 21.9%. Sydney is up 34.5% over a decade, but 1.5% lower than five years ago.

Darwin also has the lowest median value of the capitals, at $641,873, against Sydney's $1,178,959. Cheaper entry prices and the highest yields in the country are likely part of why it has held up while more expensive markets fall.

Nationally, values are 6.7% below the March 2026 peak. The Reserve Bank's board said on 3 November that "housing prices have fallen significantly" as it lifted the cash rate to 4.85%.

Hypothetical example: a paper gain in Darwin, a paper loss in Sydney

Hypothetical example: two investors each bought an established property in October 2025, before the 12 May 2026 negative gearing cut-off. The numbers are illustrative only and use the city-wide changes, not any individual property.

  • Investor A bought in Darwin for $600,000. A 9.7% rise would put its value at $658,200, a paper gain of $58,200.
  • Investor B bought in Sydney for $1,200,000. A 9.4% fall would put its value at $1,087,200, a paper loss of $112,800.

Neither result is taxable or deductible until the property is sold or another CGT event happens. Movements in value alone do not appear on a tax return.

If Investor B sold at a loss, the capital loss could only be used to reduce capital gains, not salary or other income. Unused capital losses can generally be carried forward to future years.

If Investor A sold after 12 months of ownership and before 1 July 2027, the existing 50% CGT discount would still apply to the gain. Under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, which is law, the discount is replaced by cost-base indexation plus a 30% minimum tax for gains accruing from 1 July 2027.

If Investor A instead holds on and sells after 1 July 2027, only the part of the gain accruing from that date falls under the new rules. That makes the property's value around 1 July 2027 relevant to how a future gain is taxed, and the ATO's valuation guidance is the place to check.

Both investors bought before the cut-off, so both are grandfathered for negative gearing. Rental losses can still be offset against other income, even after the new limit on established homes starts on 1 July 2027.

What to watch

Key dates for buyers, sellers and investors:

  • Early December: the December index will show whether Darwin and Hobart keep rising in November. Darwin is just 0.2% below its July peak.
  • 28 November 2026: the Victorian state election, with property taxes part of the campaign.
  • December 2026: the Mid-Year Economic and Fiscal Outlook, with updated economic forecasts. No exact date has been published.
  • The Reserve Bank's next decisions, after this week's fifth rate rise of the year.
  • 1 July 2027: the start of the new CGT treatment for gains accruing from that date, and the negative gearing limit for established homes bought after 12 May 2026.