National home values in Australia flatlined in May as the housing cycle continued to soften in most markets, with Sydney and Melbourne leading the downturn, Cotality said in a Monday report.
Cotality's national home value index was unchanged in May, with headwinds including higher interest rates and a shifting tax policy tilting toward weaker demand.
Dwelling values in Sydney and Melbourne declined 0.9% and 0.8%, respectively, in May to land roughly 2% and 3% below cyclical highs seen in November 2025. Values also fell across the the Australian Capital Territory but at a comparatively slower pace, according to the report.
While values continued to increase in other state capitals, including by 1.5% in Perth and Darwin, the growth is clearly losing steam, Cotality said.
"While the speed of value change remains very different from city to city, the direction is becoming more consistent, with most markets losing momentum as demand-side headwinds intensify," Cotality research director Tim Lawless said.
The report noted that the slowdown in housing demand also shows up in home sales data. The estimated volume of national home sales during the past three months was tracking over 2% lower than a year earlier and about 4% below the five-year average.