Australia’s housing market is showing fresh signs of a major shift, with Perth and Brisbane emerging as two of the clearest examples of a property boom losing momentum.

After years of strong price growth, conditions across Australia’s mid-sized capitals are beginning to soften as higher interest rates, cost-of-living pressures and changing investor sentiment weigh on buyers.

New analysis from property researcher Hotspotting shows just how quickly conditions have changed.

In the June 2026 quarter, the share of Australian locations receiving a positive market ranking fell from 52.1 per cent to 43.3 per cent, an 8.8 percentage-point drop.

At the same time, the number of markets classified as “declining” almost quadrupled, rising from 132 to 482. Locations showing inconsistent conditions also jumped from 422 to 624.

Perth and Brisbane have been among the markets hit hardest by the change in sentiment.

Hotspotting managing director Tim Graham said the market was experiencing an unusually disruptive period, with three Reserve Bank interest-rate increases, geopolitical uncertainty, cost-of-living pressures and federal budget changes all affecting property sentiment.

The shift does not mean every Australian housing market is falling at the same speed.

Sydney, Melbourne, Hobart and Canberra have recorded more modest increases in declining sub-markets, while some first-home-buyer areas and regional markets continue to show resilience.

However, the outlook from major financial institutions is becoming increasingly cautious.

ANZ has revised its forecasts and expects capital-city property prices to fall by 10.6 per cent by the end of 2027, before a modest recovery of about 4.3 per cent in 2028.

For homeowners, investors and prospective buyers, the message is becoming clearer: Australia’s property market is no longer moving in one direction.

The boom is becoming more fragmented, and buyers may now have significantly more negotiating power in markets where demand is cooling.

For a market that has spent years defying expectations, the question is no longer whether conditions are changing, but how far the correction will go.