A Market That Has Shifted Direction

For much of the past two decades, Australia’s residential property market developed a reputation for resilience. Despite global financial uncertainty, changing governments, and economic downturns, property values generally recovered after periods of weakness and continued to trend higher over the long term. Homeowners became accustomed to rising equity, while investors viewed residential property as one of the country’s most dependable wealth-building assets.

That confidence has been challenged as major housing markets have experienced noticeable price declines. Sydney, Melbourne, and Canberra have all recorded lower median dwelling values compared with the end of the previous year. While not every suburb or regional market has followed the same pattern, the broader trend has raised an important question: is Australia now experiencing its biggest property market correction in decades?

The answer depends on how the correction is measured. Some cities have experienced significant falls from previous peaks, while others have remained relatively stable or continued to grow. Australia is not a single property market but thousands of local markets responding differently to changing economic conditions.

What Has Caused Property Prices to Fall?

Several factors have combined to place downward pressure on housing prices.

The most significant has been rising interest rates. Higher interest rates increase mortgage repayments, reducing the amount buyers can afford to borrow. As borrowing capacity declines, purchasing power falls, often leading to lower property prices as sellers compete for fewer qualified buyers.

Economic uncertainty has also affected confidence. When households become concerned about employment, inflation, or future living costs, many delay major financial decisions such as purchasing a home or investment property. Lower buyer confidence typically reduces demand, particularly in premium housing markets.

Government policy can also influence investor behaviour. Changes affecting property taxation, including discussions around negative gearing and capital gains tax, have historically influenced investor sentiment. Whether proposed, announced, or implemented, policy uncertainty can encourage some investors to wait before entering the market.

At the same time, tighter lending standards introduced by financial regulators and banks have limited the amount many borrowers can access, further reducing demand.

Why Sydney, Melbourne and Canberra Have Been Hit Harder

Australia’s largest capital cities experienced some of the strongest price growth during previous housing booms. As a result, they have also been more vulnerable when market conditions changed.

Sydney has historically been Australia’s most expensive housing market. Higher prices mean buyers are generally more sensitive to rising interest rates because mortgage sizes are larger. Even modest increases in interest rates can significantly increase monthly repayments.

Melbourne has faced similar affordability pressures while also experiencing changing migration patterns and varying investor demand. Canberra, although smaller, has also seen prices soften after a prolonged period of strong growth.

Markets that previously recorded rapid price appreciation often experience larger corrections because prices had moved further above long-term averages during the boom years.

Does This Mean Australia Is in a Housing Crash?

The term “housing crash” is often used in media headlines but should be used carefully.

A market correction generally refers to a meaningful decline following a period of strong growth. Corrections can occur without developing into prolonged crashes.

Australia has experienced previous housing downturns, including periods during the early 1990s, following mining investment slowdowns in some regions, and during more recent cycles where Sydney and Melbourne recorded substantial price declines before recovering.

Whether the current correction becomes one of the largest in decades depends on several factors, including how long prices continue falling, the size of the decline, and whether economic conditions deteriorate further.

Historically, Australian property markets have tended to move in cycles rather than permanently decline. Past performance, however, does not guarantee future outcomes.

The Role of Supply and Demand

One factor supporting Australian property values over the long term has been ongoing demand for housing.

Population growth, immigration, household formation, and limited housing supply have contributed to sustained demand in many regions. When supply remains constrained, falling prices may eventually attract buyers back into the market, helping stabilise values.

However, supply and demand vary considerably between locations. Some suburbs experience shortages of available housing, while others have higher levels of new construction or weaker demand.

Regional areas have also performed differently from capital cities at various stages of the property cycle, highlighting the importance of analysing individual markets rather than relying solely on national averages.

What Buyers and Investors Should Consider

Market corrections create both risks and opportunities.

For first-home buyers, lower prices may improve affordability, although higher interest rates can offset some of that benefit by increasing borrowing costs. Buyers should focus on whether they can comfortably manage repayments rather than attempting to perfectly time the bottom of the market.

Property investors face a more complex environment. Rental demand may remain strong in many locations, but financing costs have increased significantly. Investors should carefully assess cash flow, rental yields, vacancy rates, maintenance expenses, and long-term investment objectives before purchasing additional property.

Existing homeowners should remember that short-term price movements only become realised losses if a property is sold. Those intending to hold property for many years may be less affected by temporary market fluctuations than buyers or sellers with shorter time horizons.

Is This Really the Biggest Correction in Decades?

Describing the current downturn as Australia’s biggest property market correction in decades depends on the period being examined and the specific market being measured.

Some cities have experienced substantial price declines after reaching record highs, while other regions have remained comparatively resilient. Australia’s housing market has never moved uniformly, and local conditions continue to play an important role.

What is clear is that rising interest rates, changing economic expectations, reduced borrowing capacity, and evolving government policy have combined to create one of the most challenging environments for residential property in recent years. These factors have slowed demand and contributed to declining prices across several major capital cities.

Whether this correction ultimately becomes the largest in decades will only be known with the benefit of hindsight. Property markets are influenced by interest rates, employment, population growth, housing supply, lending conditions, and consumer confidence, all of which continue to evolve. Rather than focusing solely on headlines, buyers, sellers, and investors should assess their own financial position, understand local market conditions, and make decisions based on long-term objectives rather than short-term market sentiment.

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Please add to news “Say G’day to our local State Member Mr John Barounis MP for Maryborough” who was enjoying the Toogoom Xmas Fair and is a big supporter of the Toogoom and District Community.

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The Love Toogoom Magazine December 2025 is out now!

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We highly recommend Andrew and the Property Together team to anyone looking to sell or buy in and around Hervey Bay. 

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Fraser Coast businesses are reminded that extra Qantas and Jetstar flights began last month making it easier for residents and visitors to connect with both domestic and international markets via Brisbane.

Qantas have reinstated early morning and evening flights between Hervey Bay and Brisbane, while Jetstar will increase the number of flights connecting Hervey Bay with Melbourne and Sydney.

Fraser Coast Mayor George Seymour said the additional services between Hervey Bay, Brisbane, Melbourne and Sydney would make travel to and from the region easier than ever as people start planning their Christmas holidays.

“It’s fantastic for our region as these services not only increase connectivity but offer greater convenience for business travellers who need same-day return trips to Brisbane.

“I encourage everyone to support these improved services – it’s a boost for tourism, business and the local economy, and a clear sign of growing confidence in the Fraser Coast.”

The Qantas flights depart Brisbane for Hervey Bay at 6:10 pm on Wednesday, Thursday and Friday, with return services at 6:30 am every Thursday, Friday and Saturday. The trial will run through to the end of March 2026.

Cr Seymour said the return of early morning and evening flights between Hervey Bay and Brisbane will make it easier for locals and visitors to travel, do business and experience everything the idyllic Fraser Coast has to offer.

Jetstar’s increased capacity also started in October, “marking 16 months since its Hervey Bay –Melbourne route first launched and bringing more than 67,000 visitors to our region during that time,” he said.

Flights to Melbourne increased from three to four return services a week, and flights to Sydney will rise to daily services from December.

“The extra flights will add more than 38,000 low-fare seats each year, making it easier than ever for people to experience the stunning Fraser Coast.”

Council and Fraser Coast Tourism and Events will continue to work closely with both Jetstar and Qantas to grow air connectivity and support tourism and business opportunities across the region.

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Fraser Coast Regional Council has adopted a bold new strategy that aims to grow the local economy by $2 billion by 2036, attract new investment, reduce the region’s median age, and create more opportunities for young professionals, skilled tradespeople and families.

Mayor George Seymour said Fraser Coast Futures 2036 – For a Better Future, Built Together would guide sustainable growth and ensure the region remained an attractive place to live, work and invest.

“The Fraser Coast has experienced remarkable growth in recent years, with our economy now valued at $6.2 billion and expanding faster than the state average,” he said.

“This strategy is about building on that momentum, supporting local businesses to grow, attracting new industries, and ensuring our young people and families see a strong future here.”

More than 100 stakeholders contributed to the plan, which identifies opportunities across advanced manufacturing, agriculture, housing, tourism, education and aged care.

It also highlights priority infrastructure projects such as the Fraser Coast Water Grid, upgrades to the Maryborough-Hervey Bay Road and Tiaro Bypass, and the redevelopment of Urangan Harbour.

Transformational projects, including city centre revitalisation, education initiatives and the expansion of the Fraser Coast Sport and Recreation Precinct, will improve liveability, attract families, and stimulate investment.

Economic Development spokesperson Cr Lachlan Cosgrove said Fraser Coast Futures 2036 was about making sure everyone benefits as our region grows.

“We want to create a region where jobs and investment go hand in hand with lifestyle, where our children can build their futures and where our natural environment is protected and celebrated,” he said.

Council will track progress through annual report cards and publish updates for the community.

“The Fraser Coast has an extraordinary future ahead if we work together,” Cr Cosgrove said.

“This strategy provides the direction, but its success depends on partnerships across government, business and the community. Together, we can build a stronger, more prosperous and more liveable region.”

To discuss opportunities to grow or invest in the Fraser Coast contact the Economic Development team at Economic.Development@frasercoast.qld.gov.au.

The October Fraser Coast Economic Snapshot has been released, with growth still prominent across most areas in our region. Data is obtained from several sources, with some figures reflecting through to 30 June, and others more recent where available. 

Key highlights include:

💲 Gross Regional Product (GRP) figures continue to rise, with an increase of 3.16% to $6,358 million as of 30 June compared with the previous year.

🏡 Median house and unit prices have increased as of 30 September on the previous year, with median unit sales $551,844 (up 14.74%) and median house sales $694,385 (up 11.8%).

💼 Jobs growth in the region has continued with 48,415 jobs on the Fraser Coast, an increase of 2,750 jobs from the previous year up to 30 June. The highest jobs growth by industry includes Health Care and Social Assistance up 1,056 jobs, Retail Trade up 958 jobs, and Transport, Postal and Warehousing up 644 jobs over the period. 

🧳 As of 30 June, overnight visitation has decreased by 12.5% on the year prior, with 838,152 overnight international and domestic visitors as of 30 June. Research indicates this could be a result of strong visitor numbers in the 2023/24 financial year setting a benchmark, as well as cost of living pressures and higher outbound international travel.

🏛️ Building approvals on the Fraser Coast increased $23 million to $195 million from August 2024 to August 2025. This is a 13.4% increase, with building approvals still set to rise over the coming year. 

🦺 Unemployment has seen a 1.4% increase on the June quarter from 5.0% June 2024 to 6.4% in June 2025. Pleasingly, this is still lower than the March 2025 figure of 7.0%. Feedback from the economist team at informed decisions suggest the recent drop is consistent with the trend observed across the Wide Bay Region as per the below:

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The Hervey Bay residential property market maintains a trajectory of robust growth and competitive conditions, driven by strong lifestyle migration and a chronic shortage of available stock. As of late 2025, the region is firmly established as one of Regional Queensland’s top performers for both capital growth and rental returns.

Sales and Price Trends: The median house price for Hervey Bay is currently sitting around the $723,000 mark, reflecting a significant annual increase of approximately 11-12%. The unit market has been even stronger, with a median price near $525,000 and annual growth exceeding 16%. Sales volumes have dropped, however, indicating a clear lack of housing supply which is acting as a strong buffer for prices even amid higher interest rates. Suburbs like Urangan and Dundowran Beach continue to lead the premium end of the market, fueled by coastal appeal and new development.

Rental Market and Investor Performance: Hervey Bay remains an exceptional market for investors. The rental crisis persists, with the vacancy rate hovering at an extremely tight 1.2%. This undersupply is driving strong rental growth, with the median weekly house rent reaching approximately $620. House rental yields are consistently around 4.0%, outperforming many larger capital city markets and making Hervey Bay a compelling proposition for those seeking both strong yield and capital appreciation.

Key Market Drivers: Ongoing population growth, driven by inter-state migration seeking affordability and a relaxed coastal lifestyle, is the primary force sustaining demand. Furthermore, significant local infrastructure projects—including major hospital expansions and the new Hervey Bay City Centre Hub—are boosting confidence, creating new jobs, and enhancing the region’s long-term economic foundations. The low supply of available properties and the high volume of development projects planned or underway (particularly in the unit and over-50s community sectors) suggest that market momentum is set to continue for the foreseeable future.

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“Toogoom’s elite waterfront position has just been redefined. A spectacular result for a highly coveted 80m water sanctuary, confirming Toogoom as SEQ’s fastest-growing luxury coastal investment. This is where lifestyle meets extraordinary capital gain.”

 “Superior waterfront sale achieved! The Toogoom peninsula market has delivered a phenomenal result, rewarding our sellers with outstanding price recognition for their tightly held asset.”

The Buyers Secured: A prized 80m waterfront lifestyle on the tranquil Toogoom peninsula. The ultimate coastal acquisition for a discerning buyer in a highly competitive market. This is more than a home; it’s a blue-chip investment in the ultimate SEQ lifestyle.”

“Waterfront recognition soars in Toogoom. A massive sale price confirms this peninsula is firmly established as a premium, high-value coastal destination.”

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