Falling house prices tend to dominate headlines, but the level from which they are falling often gets lost. The Reserve Bank has supplied the missing context: Australian house prices remain far above where they stood at the start of the decade, and a chronic shortage of housing continues to shape affordability.

Speaking on ABC's 7.30 on 8 September 2026, Deputy Governor Andrew Hauser offered a long-run frame that reshapes how the current softening should be read. Prices are easing, yes, but from levels that climbed steeply over several years. For anyone weighing affordability, the starting point matters as much as the direction of travel.

What the RBA Said

Hauser's framing was specific. House prices, he said, were "still three per cent higher than they were a year ago and nearly 50 per cent higher than ... at the beginning of this decade". That is a correction measured against a very elevated base, not a return to earlier price levels.

He tied that to structure as much as cycle, describing a widespread "supply crisis of housing across the country". In his view, that shortage creates a floor under prices, meaning the long-run trajectory reflects a persistent imbalance between the homes Australia has and the homes it needs.

On the broader picture, Hauser said Inflation remained "too high" but was "due to be back in target by the end of next year", situating the housing story within an economy still working its way back to the Reserve Bank's 2 to 3 per cent target band.

The Key Numbers

House prices: ~50% above start-of-2020s levels; +3% year-on-year. Housing CPI: +5.0%; new dwellings +5.7%. Current corrections happening from a historically high base.

What Could Happen Next

The immediate outlook depends partly on interest rates. The Monetary Policy Board meets on 28 and 29 September 2026, with markets pricing roughly a two-in-three chance of a further rise, which would add pressure to prices in the near term.

The medium-term Supply picture is less encouraging for affordability. The Reserve Bank expects dwelling construction activity to be "falling a bit" going into late 2027 and 2028 — fewer homes completed, still positive but lower. If fewer homes are delivered while Demand persists, the shortage underpinning high prices could deepen rather than ease.

Rents add another dimension. The bank has noted rents growing faster than before the Pandemic and monitors them closely as a key inflation component, with migration adding both demand and supply that it expects to broadly balance over the medium term. For renters and would-be buyers alike, the affordability squeeze is a persistent theme rather than a passing one.

Conclusion

The Reserve Bank's long-run framing is a useful corrective to the headlines. Prices are softening, but they remain nearly 50 per cent above start-of-decade levels, and a structural supply shortage continues to shape the market. A correction from such a high base does not, on its own, restore affordability, and the bank's own expectation of slower construction suggests the underlying imbalance may persist. For households, the takeaway is perspective: today's easing sits atop years of steep gains, and the affordability challenge is rooted in supply. None of this amounts to guidance on individual decisions.