PM Stands by House Price Growth Forecast Despite Falling Home Values

Prime Minister Anthony Albanese speaks at Parliament House in Canberra, Australia, on Feb. 4, 2026. Hilary Wardhaugh/Getty ImagesPrime Minister Anthony Albanese says house prices will continue to rise, despite real estate data showing home values are starting to fall across much of the nation.Property values have dipped across Sydney, Melbourne and Canberra in June amid higher interest rates and impending tax changes.According to the latest analysis by the data analytics and information services company Cotality, national home value fell by 0.4 percent in June, the largest month-on-month fall since December 2022.Sydney reported the largest decline in house prices, down 1.2 percent, followed by Melbourne at 1 percent and Canberra at 0.6 percent.Over the June quarter, Sydney saw a 3.2 percent decline in home value, while Melbourne and Canberra recorded drops of 2.6 percent and 1.3 percent, respectively.Since the start of the year, Sydney’s median home value has already fallen by about $48,000 (US$33,000).June figures mark the first full month following the Albanese government’s announcement of major reforms targeting the capital gains tax, negative gearing and discretionary trust.Prime Minister Says House Prices Will RiseWhen asked whether the slowdown in home value growth would help more people enter the market, Albanese maintained house prices would rise, albeit at a slower pace, which he attributed to the government’s recent tax reforms.“The Treasury estimates are that there’ll be an increase in the value of homes, but it will be slightly lower than it would have been without these measures,” he said.“The great news is that this Saturday, like last Saturday, first home buyers would have rocked up to auctions and not be competing with investors who want to negatively gear their properties and have taxpayers backing in those investments.“So, a level playing field. What we’re seeing increasingly is stories of right around the country of people who had almost given up on owning their first home, getting access to a roof over their own head.”In Parliament on June 30, Shadow Treasurer Tim Wilson asked housing minister Clare O’Neil about the risk of new home buyers falling into negative equity if property values plummet.In response, O’Neil quoted a line from the recent budget papers.“The reduction in investor demand is expected to lead to a small and temporary slowing in house price growth, estimated to see prices grow by around 2 percent less over a couple years relative to no tax policy change,” she said.Speaking to Sky News Australia, Opposition Leader Angus Taylor said that if property values continued to fall as predicted, new home buyers who had already purchased a property would be “in the red.”“The government won’t come clean on whether this is going to happen—but there’s every prospect it will if the minister for housing is right on the house price forecast,” he said.“They will no doubt, within the government … have numbers on how many people will be left with negative equity as a result of this and they’re not prepared to come clean on it.”Taylor also stated that auction clearance rates had “collapsed”, saying this meant some prospective buyers had missed their chance to enter the housing market.“What we need to see is affordability,” he said.“Affordability means that you’ve got to get interest rates down, you get incomes rising and you’ve got to get people into a position where they can buy a home.”