Major bank warns property downturn ‘just the beginning’ with prices tipped to fall across the country

July 7, 2026 - 07:58

One of the world's largest financial institutions has issued a stark warning for homeowners and investors, predicting that the current property market slowdown is far from over. The bank now forecasts a national decline in house prices of up to 8 percent, with further drops expected across multiple regions.

According to the bank's latest analysis, the downturn is being driven by a combination of rising interest rates, persistent inflation, and tightening lending conditions. While some markets have already seen price corrections in recent months, the report suggests these are only the early stages of a broader adjustment. The bank's economists stated that the current weakness in the market is "just the beginning," cautioning that affordability pressures will continue to weigh on buyer demand.

The forecast covers major capital cities and regional areas alike, with some markets likely to experience steeper falls than others. Properties that saw the largest gains during the pandemic boom are considered particularly vulnerable. The bank also noted that the pace of price declines could accelerate if the central bank raises rates further or if the economy weakens more than expected.

For existing homeowners, the warning adds to growing concerns about negative equity, especially for those who bought near the peak of the market with small deposits. First-home buyers, meanwhile, may find some relief as prices become more accessible, though higher borrowing costs remain a significant barrier.

The report did not specify a timeline for a recovery, suggesting that the market could remain under pressure for at least the next 12 to 18 months.