NAB property survey turns negative as professionals tip 4.2% house price fall

Sentiment among Australian property professionals has turned negative for the first time in six years, with agents, property managers, developers and investors surveyed by NAB now expecting national house prices to fall 4.2% over the next 12 months.

The NAB Residential Property Index dropped 18 points to -4 in the September quarter, its third consecutive quarterly decline. Respondents to the June quarter survey had expected a 2.5% fall. The survey, released on 14 October, drew on about 228 property professionals.

For agencies heading into the back half of spring, the more telling number may be the gap between price and rent expectations. Respondents still expect rents to rise 3.7% nationally over the next year, down only marginally from 3.9% in the June quarter, and 4.0% over two years.

"Property professionals have lowered their expectations for house prices, while rental growth is expected to remain elevated," NAB chief economist Dr Sally Auld said.

NSW leads the decline

NSW recorded the weakest result of any state, with its index falling from +3 in the June quarter to -22. Professionals there now expect prices to fall 5.1% over 12 months, compared with a 3.2% fall forecast three months earlier. South Australia (-5.4%) and Victoria (-4.8%) are also expected to post larger falls than the national average, while Queensland respondents expect a 3.9% decline.

Western Australia remains the outlier among the large states, with its index at +22 and a smaller expected fall of 2.9%. Tasmania is the only state where respondents expect meaningful price growth, at 4.6% over the next year, although its sample is small.

Rent expectations are strongest in WA and South Australia, both at 6.4% over 12 months, and weakest in NSW at 2.2%.

Interest rates move up the list

Construction costs remain the biggest barrier to new housing development, cited by 77% of respondents. Interest rates have climbed to second place at 58.3%, up from 39.6% in the June quarter, overtaking planning permit delays at 54.1%.

"Weaker price expectations don't remove the underlying supply challenge," Dr Auld said. "High construction costs, interest rates and planning delays continue to make new development more difficult."

In the established market, interest rates were again nominated as the largest constraint on buyers, followed by access to credit. The level of prices, which had ranked as the leading constraint since 2025, has slipped to fourth.

Fewer first home buyers

The buyer mix also changed during the quarter. First home buyers accounted for 34.4% of established purchases, down from 39.0%, and 25.2% of new housing sales, down from 38.6%. Owner occupiers remained the largest buyer group in both markets, while local investor activity rose slightly to 14.7% of established sales but stayed below late 2025 levels.

Respondents were also asked about stamp duty. Two thirds said it was a barrier for first or newer home buyers, 61% said it encouraged people to stay in their current home and 43% said it discouraged downsizing. That is relevant for agencies whose listing pipelines depend on owners trading up or down.

The figures are expectations from industry participants, not NAB forecasts or measured price changes. Even so, a survey of the people who list, lease, finance and develop property moving into negative territory is a useful read on how the industry itself sees the months ahead.

Source: NAB Residential Property Survey Q3 2026 and NAB media release, 14 October 2026.