The latest market data shows just how quickly the trend has reversed. In August 2026, residential property prices in Sydney fell by 1.4 per cent compared with the previous month. Compared with the most recent peak, the decline stands at around 7.1 per cent. Nationally, the Cotality Index fell by 0.9 per cent in August, marking the fifth consecutive month of decline.<\/p>\n
At the same time, supply is visibly increasing. In the four weeks to 30 August, the number of property listings in Australia’s capital cities was 24 per cent higher than the same period last year. This is weighing particularly heavily on Sydney, as the country’s most expensive housing market is simultaneously subject to stricter tax rules and high financing costs.<\/p>\n
Tax reform shifts capital towards new-builds Downturn hits<\/span> sales and financing Bathla sounds the alarm Sydney is leading the way in Australia\u2019s housing downturn. Falling prices, a slump in demand and the reform of the \u2018negative gearing\u2019 tax scheme are all putting pressure on the existing property market, project costing and developer financing. The boom is thus losing stability in precisely the area where it had long been regarded as unshakeable.<\/p>\n","protected":false},"author":2,"featured_media":164262,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":"","inline_featured_image":false,"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[22358,55963,55972,56005,56002],"tags":[13256,61664,12525,12526,61665,12528,61666,61667,61668,13228],"class_list":["post-164261","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-construction","category-financing-strategies","category-interest-rates-capital-markets","category-international","category-residential","tag-australien-en","tag-cotality","tag-immoinvest-en","tag-immonews-en","tag-negative-gearing","tag-news-en","tag-projektfinanzierung","tag-reserve-bank-of-australia","tag-sydney","tag-wohnungsmarkt-en","pmpro-has-access"],"acf":{"bild_mit_ki_erstellt_worden":["Ja"],"lead":"Sydney is leading the way in Australia\u2019s housing downturn. Falling prices, a slump in demand and the reform of the \u2018negative gearing\u2019 tax scheme are all putting pressure on the existing property market, project costing and developer financing. The boom is thus losing stability in precisely the area where it had long been regarded as unshakeable.","autor":"","ort":"","bildunterschrift":"","bild_im_grid":false,"gallerie":"","newsim":"3940"},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t
<\/strong>Since the budget of 12 May 2026, it has been clear where Canberra intends to steer the market. From 1 July 2027, negative gearing for residential property will, in principle, be restricted to new-build properties. Existing properties held as at the cut-off date of 12 May 2026 at 7.30 pm AEST remain exempt. For purchases of existing properties made after this date, losses from the 2027–28 tax year onwards can no longer be offset against other income as was previously the case. The measure is intended to redirect investment from the existing housing stock towards new homes and provide some breathing space for first-time buyers.<\/p>\n
<\/strong>For Sydney, this reform comes at an already fragile time. Sales are slowing, whilst home ownership is hardly becoming any more affordable despite falling prices. The Reserve Bank of Australia raised the key interest rate in three stages to 4.35 per cent in 2026 and most recently left it unchanged on 11 August. Because only a small proportion of mortgages in Australia have fixed-term interest rates, higher interest rates quickly feed through into monthly repayments.<\/p>\n
<\/strong>The case of the Bathla Group in Sydney illustrates just how directly the pressure is now spilling over into the construction industry. The company placed the group into voluntary administration in August 2026, citing weaker sales, budget changes and declining confidence in key markets. ABC recently reported liabilities of more than 3.2 billion Australian dollars. For project developers, loan funds and buyers of uncompleted flats, this is more than just an isolated incident. It is an indication of how quickly a fall in prices can lead to financing difficulties for ongoing developments.<\/p>\n","protected":false},"excerpt":{"rendered":"