Australia's Housing Downturn Broadens as Brisbane and Perth Lead the Decline — What Borrowers Should Do Now

Key takeaway: CoreLogic's November 2026 analysis confirms Australia's housing downturn has broadened materially, with Brisbane and Perth now leading national price declines alongside Sydney and Melbourne, as the RBA cash rate reaches 4.85% — an 18-year high that is weighing heavily on buyer demand and borrowing capacity.

Why Brisbane and Perth Are Now Leading Australia's Housing Decline

For much of 2024 and 2025, Brisbane and Perth were the standout markets — posting strong annual growth when Sydney and Melbourne were already cooling. That story has changed sharply in 2026.

CoreLogic's November 2026 analysis shows the housing downturn has broadened materially, with Brisbane and Perth now leading the national decline. The catalyst is familiar: rising mortgage rates, reduced borrowing capacity, and a buyer pool that has been squeezed by the RBA's rate cycle.

The RBA raised its cash rate by a further 25 basis points to 4.85% at its November 3, 2026 meeting — the highest level since 2008. With every 25-basis-point increase reducing borrowing capacity for a typical dual-income household, the cumulative effect of this rate cycle is now being felt in markets that had previously been shielded by strong migration and infrastructure investment.

What "Broadening Downturn" Means for Australian Property Values

A broadening downturn does not mean a crash across every market. It means that:

1. More markets are declining, including those previously outperforming the national average
2. Recovery timelines are uncertain, particularly while inflation remains well above the RBA's 2–3% target band — CPI was 4.3% in September 2026
3. Serviceability pressure is intensifying — with average full-time earnings at $2,083.70 per week (ABS, May 2026) and mortgage rates exceeding 7% for many borrowers, debt-servicing consumes a larger share of household income than at any point in a generation

"A downturn narrowing to a few markets is a cycle. A downturn broadening nationally is a structural re-pricing — and it demands a different approach to borrowing strategy."

Specific Implications for Bridging Finance and Refinancing

The broadening downturn creates concrete challenges for borrowers in transition:

Bridging loan borrowers: If you're buying a new property before selling your existing home in Brisbane or Perth, the assumption that your existing property will sell at a certain price — and within a certain timeframe — becomes riskier in a declining market. Proper exit strategy planning is now essential, not optional.

Refinancers: With property values declining in more markets, LVRs are drifting upward for some borrowers. A loan settled at 65% LVR may now be at 72% or more depending on local performance. This can affect refinancing eligibility with lenders who apply strict LVR caps.

Commercial property investors: Commercial values tend to lag residential shifts, but in markets where residential demand falls sharply, commercial transaction volumes often follow within 6–12 months — worth factoring into medium-term planning.

What This Means for MPFG Borrowers

Property market cycles create genuine complexity for anyone mid-transaction or planning to refinance. MPFG Capital's bridging finance solutions are designed specifically for buyers who need to move before their existing property settles — including structured exit strategies and loan terms that account for realistic sale timelines in softer markets.

For self-employed borrowers facing rising LVRs, MPFG's Alt Doc product line and Easy Refinance product offer refinancing options with the flexibility that major banks often cannot match. Contact the MPFG team in Melbourne, Sydney, or Brisbane for a no-obligation assessment.

FAQ

How much have Brisbane and Perth property prices fallen in 2026?

CoreLogic's November 2026 analysis confirms the downturn has broadened to include Brisbane and Perth, but the depth of declines varies significantly by suburb and property type. Contacting a licensed property valuer or mortgage broker for your specific situation is the most reliable approach.

Does a property market downturn affect my existing mortgage?

Your mortgage terms don't change because values fall — but if your LVR has increased materially, you may face challenges when you need to refinance or access equity. It is worth understanding your current LVR position before making any financial decisions.

Is it still worth buying property in Brisbane or Perth given the current downturn?

This is a personal financial decision that depends on your circumstances, goals, and investment horizon. What is clear is that the lending environment is more complex than 12 months ago — and professional credit advice is more valuable, not less, in a shifting market.

This article is general information only and does not constitute financial or credit advice. All applications are subject to credit assessment by MPFG Capital (ACL 553698).