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Ninth life: What 30 years of housing downturns can tell us about this one

Published July 6, 2026 at 4:43 AM UTC

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Australia's housing market is currently experiencing its ninth downturn in 30 years. Historical data suggests that such downturns are typically short-lived and followed by recoveries that push prices to new highs. According to Domain's FY2027 Forecast Report, for prices across the combined capitals to fall back to their previous low in March 2023, they'd need to drop by around 22.8%. The analysis indicates that downturns have typically been short and shallow, averaging a 2.9% decline over around eight months, while upswings have been longer and significantly stronger, delivering 32% growth on average over nearly three years. Domain chief residential economist Nicola Powell noted that the underlying rhythm of the market hasn't changed, stating, "Downturns can feel sharp in real time, but historically they’ve been short and shallow, and have not unwound the gains that preceded them." Interest rates are a key signal to watch for market recovery. Once rates have peaked and the consensus is that the next move is down, it often signals a turning point. Additionally, auction clearance rates are a gauge of buyer demand; rates above 60% are typically seen as a mark of a balanced market. Currently, clearance rates are around 40% in capital cities, indicating a less balanced market. Spring is likely to be the next real test, with winter being a traditionally quieter period for listings. By then, there should be a clearer idea of where buyer demand sits.