The suburbs where house prices have plummeted as Australia's property profit boom starts to crack

By SARAH BROOKES - SENIOR REPORTER, AUSTRALIA Published: 15:06, 4 August 2026 | Updated: 15:06, 4 August 2026 Australia's property boom is finally showing cracks with homeowners finding it harder to make money and prices in freefall in some of the nation's poshest postcodes.  Fresh figures show that Australia's long run of property gains has started to ease, while owners in some of Sydney's most exclusive suburbs have seen up to $450,000 wiped from median house values. According to Domain's Profit and Loss report released on Wednesday, the share of profit-making resales slipped for both houses and units, offering the first sign the boom in resale profitability may be nearing its peak. Nationally, 97.4 per cent of house resales generated a profit while unit profitability remained unchanged at 88.6 per cent. Domain chief residential economist Dr Nicola Powell said the shift was modest but significant. She said resale profitability was typically a lagging indicator that followed housing market movements with a delay. 'This is the first sign that Australia's long run of property profits is starting to ease, but it's far from a collapse in seller fortunes,' she said. 'Most homeowners are still making substantial gains, even as softer market conditions begin to affect resale outcomes. Domain economist Dr Nicola Powell (pictured) said the shift was modest but significant with resale profitability typically a lagging indicator following market movements with a delay Bondi (pictured), Vaucluse and Bellevue Hill recorded some of the nation's biggest property price falls, with median house values dropping by as much as $450,000 A for sale sign on a property in the suburb of Fitzroy in Melbourne, where prices are in freefall 'The divide is most evident in the unit market. More than one in four Melbourne unit sellers are now selling at a loss, while almost every Brisbane unit seller is making a profit. 'Perth, Brisbane and Adelaide continue to deliver strong results for sellers, while Melbourne and Canberra are showing the clearest signs of weaker market conditions.' While loss-making sales remained rare, they proved costly for those selling at the wrong point in the cycle.  In Sydney's eastern suburbs, Bondi, Vaucluse and Bellevue Hill recorded some of the nation's biggest falls, where median house values dropped by as much as $450,000. The pain extended right across the city, with homeowners in Baulkham Hills, Cronulla, Miranda, Caringbah and Manly also suffering sharp declines. Median house values in those suburbs fell by between $295,000 and $390,000, underscoring mounting pressure on some of Australia's most expensive housing markets. The downturn also hit some of Melbourne's best-known postcodes, from the blue-chip suburbs of Toorak and South Yarra to the beachside enclaves of Brighton and Sandringham and the family-friendly eastern hubs of Glen Waverley and Doncaster. Adelaide's steepest declines were concentrated in affluent inner-southern suburbs such as Mitcham and Unley, as well as popular lifestyle destinations including Glenelg, Brighton, the Adelaide Hills and McLaren Vale.  Vendors don’t appear to be in a rush to sell just yet with new listings down as experts predict they are waiting for prices to fall further Perth and Brisbane led the nation for profitable house resales, with 99.6 per cent and 99.5 per cent of transactions delivering a gain respectively, while median resale profits reached record highs of $610,000 in Perth and $629,056 in Brisbane.  Sydney, however, remained Australia's most lucrative market, with a median profit of $739,500.   Perth recorded the nation's largest median house resale loss at a record $213,500, followed by Brisbane at $180,000, despite less than 0.5 per cent of transactions in both cities selling at a loss.  Experts have warned the worst may not be over for those forced to sell. Interest rate rises, Budget tax hikes on investors and low buyer confidence are continuing to drag prices lower, according to AMP chief economist Shane Oliver. 'Prices nationally have now fallen two per cent from their high and by around 5.5 per cent in Sydney and Melbourne,' he said. 'The boom in Brisbane, Adelaide and Perth is over as they are falling too, with revised data showing that price falls in those cities started in June with Perth likely to get revised negative for July too. 'With a near perfect storm hitting the property market we continue to expect a top to bottom fall in national average property prices of around seven per cent.' Oliver said Brisbane, Adelaide, Sydney and Hobart houses are the most overvalued and vulnerable while in the unit market, Brisbane, Adelaide and Canberra are the most vulnerable. AMP chief economist Shane Oliver (pictured) warned home prices will likely continue to fall, but said forecasts of a dramatic 15 to 20 per cent crash are likely 'overblown' He warned home prices still face downside risks over the next six to 12 months, but said forecasts of a dramatic 15 to 20 per cent crash are likely overblown. Oliver said a collapse of that magnitude would require a wave of distressed selling by homeowners. 'A crash would require wide scale forced selling by homeowners – but without much higher unemployment forcing homeowners to sell this is unlikely,' he said. Oliver said he expected the RBA to start cutting rates through the second half of 2027 but a sharp fall in home prices could bring this forward to the first half. 'Falling prices depress wealth which weighs on consumer spending which in turn would bring inflation back to target faster than the RBA is currently assuming,' he said. Queensland buyers' agent Glenn Price said the property market is in a 'difficult spot' noting Brisbane's auction clearance rate has now been stuck below 40 per cent for 10 straight weeks. 'For a market that couldn't put a foot wrong not long ago, that's a pretty dramatic reversal,' he said. 'Buyers are convinced prices have further to fall, so they're waiting for a bargain.  Residential homes in the suburbs of Seven Hills and Camp Hill are seen in Brisbane where the market has fallen dramatically 'Sellers are still pricing like it's 2022. The result is a market that's grinding to a halt.' Price said all four major banks are now forecasting the cash rate will remain on hold at 4.35 per cent, and it was hard to see the RBA wanting to tighten policy into a market that's already losing momentum. 'I'll call it now: I don't think we'll see another rate hike this year,' he said. The Reserve Bank Board will hand down its next rates decision on August 11.