Can Australia make housing affordable while avoiding a major market crash? We may soon find out

Australia’s housing market is under pressure as the Reserve Bank’s rate hikes and recent policy changes toward property investors have cooled demand and pushed prices lower. The article argues this downturn may be more consequential than prior cyclical falls, with AMP’s Shane Oliver forecasting capital-city home prices to decline 7.8% peak-to-trough by around April next year. NAB expects Sydney and Melbourne to see about 10% declines, while smaller capitals should be more resilient, and some cities may still post annual gains in 2026. The piece suggests prices could stabilize in early 2027 and then recover only modestly if interest rates ease and sentiment improves. Overall, the market is shifting toward slower, more stagnant price growth, which could improve affordability but also raises the risk of political backlash over perceived wealth destruction.