Australian House Prices Over 40 Years (1986 to 2025): 36 Years Up, 4 Years Down, and What It Means for Your Equity, Your LVR and Your Refinance
Australian home prices rose in 36 of the 40 calendar years from 1986 to 2025 and fell in four, 2008, 2011, 2018 and 2022, an average of 6.8 per cent a year before inflation on the Bank for International Settlements index. Melbourne is the exception today: the ABS median house price in Greater Melbourne is 9.6 per cent below its late 2021 peak. The useful question is where that history has left your equity, your loan to value ratio and your rate; Ahmed Lotfi, a former banker, works through each of them.
- Forty years, four falls: 2008 (4.0 per cent), 2011 (4.1 per cent), 2018 (5.1 per cent) and 2022 (3.1 per cent). Every other year rose. The index is 12.5 times its 1985 level.
- The average: 6.8 per cent a year as a simple average, 6.5 per cent compounded; after inflation 3.2 per cent a year, with 9 down years rather than four.
- 2026 so far: Cotality has national values 5.2 per cent below their March 2026 record at 30 September 2026, after a sixth monthly fall, and flat over the year. The calendar year result is not in yet.
- Melbourne: the ABS median established house price was $940,000 in the December quarter 2021 and $850,000 in the June quarter 2026, 9.6 per cent lower; Cotality has Melbourne values 7.5 per cent below their March 2022 record.
- What it means for a loan: prices move your loan to value ratio, and lenders price on LVR bands that commonly step at 60, 70 and 80 per cent. The calculator below puts the index against what you paid.
Where has forty years of prices left your loan? One call with Ahmed, a former banker, covers both your equity and your rate.
Tell him what you paid, when, and what you owe now. He puts the index and a current valuation estimate against your balance, names the LVR band you are likely in, and says whether a rate request to your lender or a switch is the move.
Check my equity and my rateAustralian house prices history, year by year: 1986 to 2025
The table is the Bank for International Settlements residential property price index for Australia (nominal, all dwellings), the same series the Federal Reserve Bank of St. Louis republishes as QAUN368BIS. Each figure is the December quarter against the December quarter a year earlier, before inflation, rounded to one decimal, read 23 October 2026.
| Year | Change |
|---|---|
| 1986 | +3.3% |
| 1987 | +9.0% |
| 1988 | +32.9% |
| 1989 | +10.6% |
| 1990 | +1.1% |
| 1991 | +4.2% |
| 1992 | +0.7% |
| 1993 | +2.7% |
| 1994 | +3.4% |
| 1995 | +0.3% |
| Year | Change |
|---|---|
| 1996 | +1.7% |
| 1997 | +6.0% |
| 1998 | +6.4% |
| 1999 | +9.5% |
| 2000 | +6.6% |
| 2001 | +15.5% |
| 2002 | +18.7% |
| 2003 | +18.9% |
| 2004 | +0.3% |
| 2005 | +2.4% |
| Year | Change |
|---|---|
| 2006 | +8.6% |
| 2007 | +13.3% |
| 2008 | -4.0% |
| 2009 | +14.3% |
| 2010 | +4.4% |
| 2011 | -4.1% |
| 2012 | +3.0% |
| 2013 | +10.0% |
| 2014 | +6.7% |
| 2015 | +8.7% |
| Year | Change |
|---|---|
| 2016 | +7.7% |
| 2017 | +5.0% |
| 2018 | -5.1% |
| 2019 | +2.5% |
| 2020 | +3.6% |
| 2021 | +23.7% |
| 2022 | -3.1% |
| 2023 | +7.2% |
| 2024 | +5.8% |
| 2025 | +8.2% |
Source: BIS residential property prices, series Q.AU.N.628, index 2010 = 100. National figures differ from any one city or suburb. Past performance is not a reliable indicator of future performance.
What the 6.8 per cent average hides: house price growth in Australia over forty years
The headline figure hides more than it shows. The simple average of forty yearly changes is 6.8 per cent, but the compound rate that takes the index from 17.0 to 211.7 is 6.5 per cent a year; 1988 alone, at 32.9 per cent, lifts the simple average. The four down years are a nominal count. On the BIS real series, which strips out consumer price inflation, 9 of the forty years were falls, including 1986 and 1990, and the compound rate is 3.2 per cent a year. The decades differ, too: 6.8 per cent a year on average from 1986 to 1995, 8.6 from 1996 to 2005, 6.1 from 2006 to 2015 and 5.5 from 2016 to 2025.
The shape of the forty years is long runs of rises with short, shallow falls. The index rose for 22 consecutive years from 1986 to 2007. The deepest calendar year fall was 2018, at 5.1 per cent, and no three year or five year window in the forty ended below where it started. What followed each fall is also a matter of record: 2009 rose 14.3 per cent after the fall of 2008; 2012 rose 3.0 per cent after the fall of 2011; 2019 rose 2.5 per cent after the fall of 2018; 2023 rose 7.2 per cent after the fall of 2022. That is a description of the past, not a forecast of anything, and the next section shows why the present year needs its own reading.
Is 2026 a down year? Where Australian house prices stand now
Not known yet, and this page does not guess. Two sources read 23 October 2026 describe the year so far. The BIS quarterly index runs to the June quarter 2026, 8.3 per cent above a year earlier and fractionally below the March quarter, because it lags the market by a quarter or more. Cotality’s monthly Home Value Index, in its September 2026 release of 1 October 2026, has national values down 1.1 per cent in September, the sixth straight monthly fall, and 5.2 per cent below their record high of March 2026. Over the year the national figure is flat. Every capital except Darwin was lower in September, and home sales ran 19.1 per cent below a year earlier. The December quarter decides the calendar year, and the table above will carry 2026 when the BIS publishes it. The current medians for every capital are on our median house prices page, restated each month from the same Cotality release.
Melbourne house prices history: the exception to the forty year story
A Melbourne owner reading the national table is reading someone else’s market. The Australian Bureau of Statistics Total Value of Dwellings release gives a median price for established house transfers in Greater Melbourne each quarter since 2011. It peaked at $940,000 in the December quarter 2021 and fell in 2014, 2018, 2022, 2023 and 2024. In the June quarter 2026 it stood at $850,000, 9.6 per cent below the peak and 2.4 per cent above five years earlier. Melbourne attached dwellings are 9.0 per cent below five years earlier on the same release. Cotality’s index tells the same story in its own terms: Melbourne values 7.5 per cent below their March 2022 record, 7.2 per cent below their November 2025 high and down 6.2 per cent over the year to 30 September 2026, with the September fall of 0.7 per cent the mildest of the large capitals.
| Year | Median house price | Change on a year earlier |
|---|---|---|
| 2012 | $508,000 | +2.6% |
| 2013 | $561,000 | +10.4% |
| 2014 | $552,500 | -1.5% |
| 2015 | $612,300 | +10.8% |
| 2016 | $675,000 | +10.2% |
| 2017 | $750,000 | +11.1% |
| 2018 | $735,000 | -2.0% |
| 2019 | $760,000 | +3.4% |
| 2020 | $760,000 | +0.0% |
| 2021 | $940,000 | +23.7% |
| 2022 | $875,000 | -6.9% |
| 2023 | $865,000 | -1.1% |
| 2024 | $850,000 | -1.7% |
| 2025 | $895,000 | +5.3% |
ABS medians are transfer medians, so they move with the mix of what sold in the quarter as well as with prices; the direction over several years is the useful reading. Figures in thousands rounded by the ABS.
For a loan, the consequence is plain. Anyone who bought a Melbourne house between 2021 and 2023 has had little or no help from the market, so the loan to value ratio on that loan is likely higher than the day it settled, and the equity that exists has come from repayments. That makes the rate the part of the loan still worth working on, and a current valuation the first thing to understand before a refinance is lodged. Where the Melbourne market sits month by month, with a savings calculator for a Melbourne loan, is on our Melbourne market page; the mechanics of a lower valuation are on our guide to falling house prices and your refinance.
What has the national index done since you bought? Your equity and LVR band
Enter the year you bought, what you paid and what you owe today. The calculator moves the price with the national BIS index to the end of 2025, or uses your own estimate of value if you enter one, and returns the implied value, the implied loan to value ratio and the band lenders commonly price it in.
What has the national index done since you bought?
Enter any figures. The index is the BIS national series, December quarter 1985 to December quarter 2025; it is arithmetic, not a valuation and not an offer.
Using the national index from the December quarter of 2019 to the December quarter of 2025. Your suburb, and Melbourne in particular, may sit well away from the national figure; a lender uses its own valuation.
Equity, LVR and the rate you pay: how forty years land on one loan
Equity is the value of the property less what you owe; the loan to value ratio is what you owe divided by the value. Lenders price on that ratio in bands that commonly step at 60, 70 and 80 per cent of value, and Moneysmart notes that lenders mortgage insurance is usually payable when the amount borrowed exceeds 80 per cent of the value of the property. Prices therefore change the price of your loan without your doing anything, in both directions.
A national example. A home bought in 2019 for $700,000 with a $560,000 loan settled at an LVR of 80 per cent. Moved with the national index from the December quarter 2019 to the December quarter 2025, up 52.4 per cent, it is worth about $1,067,000. If the balance is now $500,000, the LVR is 46.9 per cent, under the 60 per cent step, which is a different conversation with any lender from the 80 per cent one at settlement. Owners who settled at 80 per cent or above and paid lenders mortgage insurance may now sit below the point where it applied.
The Melbourne mirror. A house bought in Melbourne at the 2021 median of $940,000 with a 20 per cent deposit settled with a $752,000 loan. Moved with the ABS Melbourne median to the June quarter 2026, it is worth about $850,000. If the balance is now $720,000, the LVR is 84.7 per cent: above 80, so the valuation and the lender’s view of it decide what a refinance costs and who will price it. Both examples are arithmetic on the balances stated; a lender orders its own valuation.
The rate itself is the other half. Our guide to refinancing a home loan in Australia carries the lender rate table we re-read each month, and the switching costs to set against a lower rate. A like for like refinance of the same loan at a lower rate is assessed on a lighter test at some lenders. Our refinance savings calculator prints what a lower rate is worth on your balance.
Refinancing from overseas on the equity you built before you left
Many Australians working abroad still hold a loan written years ago on an Australian salary, against a property that has moved with the table above. Where the equity is there, it helps: a lower loan to value ratio widens the choice of lender and the pricing available. The loan itself is assessed on the foreign salary at the time of the refinance, converted and tiered by currency, and an illustrative 80 per cent cap is the common ceiling for a borrower assessed on overseas income. None of the steps requires you to be in Australia. The full process, country by country, is our owner guide to refinancing an Australian mortgage from overseas; this page adds only the forty year context behind the equity.
What to do with forty years of prices this week
- Know the value and the band. Run the calculator above, then test it against recent sales in your street or a current valuation. The band you land in, commonly 60, 70 or 80 per cent, is what a lender prices on.
- Test the rate both ways. Ask your current lender for its best rate on your loan, and put that beside a switch. Our comparison of refinancing with the same bank or switching sets out what each involves.
- Count the switching costs and the time. The cost of refinancing is a known list, and how long a refinance takes is set mostly by the lender you leave. Both are usually small against a rate held for years in the wrong band; a fixed rate break cost needs its own quote first.
Bought before you moved overseas, or bought in Melbourne in 2021? The order of the next steps matters more than the year.
Have the balance owing, the current rate and your own sense of the value to hand. Ahmed tells you plainly whether the file is a reprice, a lighter like for like assessment or a full switch, and what each would cost.
Talk it through with a former bankerHow Everstone runs it. The first call is a read of your position: value, band and rate. If a move stacks up, Ahmed Lotfi, a former banker, places the file with the lender whose pricing fits the band you are in, and sets out the switching costs before anything is lodged. To start, book a time with Ahmed, in your own time zone.
Frequently asked questions
How many years have Australian house prices fallen in the last 40 years?
Four of the 40 calendar years from 1986 to 2025 on the BIS national index, measured December quarter on December quarter before inflation: 2008 (down 4.0 per cent), 2011 (down 4.1 per cent), 2018 (down 5.1 per cent) and 2022 (down 3.1 per cent). After inflation the count is 9, because a small rise in a year of higher inflation is a fall in real terms.
What is the average annual house price growth in Australia?
6.8 per cent a year as a simple average of the 40 yearly changes, or 6.5 per cent a year compounded, before inflation, on the BIS index from 1986 to 2025. After inflation the compound figure is 3.2 per cent a year. The simple average is lifted by 1988, when the index rose 32.9 per cent.
Is 2026 a down year for Australian house prices?
Not known until the December quarter is published, and this page makes no prediction. Cotality reports national values 5.2 per cent below their March 2026 record at 30 September 2026 after a sixth monthly fall, with the annual change flat. The BIS quarterly index to June 2026 was still 8.3 per cent above a year earlier because it lags the monthly data.
Have Melbourne house prices gone up in the last five years?
Barely, on the official figures. The ABS median price of established house transfers in Greater Melbourne was $850,000 in the June quarter 2026, 2.4 per cent above five years earlier and 9.6 per cent below its December quarter 2021 peak of $940,000. Cotality has Melbourne values 7.5 per cent below their March 2022 record and down 6.2 per cent over the year to 30 September 2026.
How do I work out my equity and my LVR?
Equity is the value of the property less the loan balance, and the loan to value ratio is the balance divided by the value: a $500,000 loan on a home worth $1,000,000 is an LVR of 50 per cent. Lenders price in bands that commonly step at 60, 70 and 80 per cent of value, and Moneysmart notes lenders mortgage insurance is usually payable when the loan exceeds 80 per cent of the value. The calculator on this page gives the index implied figure; a lender uses its own valuation.
Can I refinance if my property has fallen in value?
Often, yes. A lower valuation raises the LVR on the same loan, which can move the rate band or bring lenders mortgage insurance into play above 80 per cent, so the order matters: understand the likely valuation and the band first, then compare a rate request to your current lender with a switch. A former banker runs that order for you before anything is lodged.
Sources
Page or series, printed date if any, and the figures taken from it.
- Bank for International Settlements, residential property price statistics, Australia nominal series Q.AU.N.628 (data file): the forty yearly changes, the averages, the four down years, the multiple since 1985 and the June quarter 2026 reading, read 23 October 2026
- Bank for International Settlements, Australia real series Q.AU.R.628 (data file): the nine down years and the compound rate after inflation, read 23 October 2026
- Federal Reserve Bank of St. Louis, FRED series QAUN368BIS: the same BIS nominal series as republished, the identifier the widely shared graphic cites, read 23 October 2026
- Australian Bureau of Statistics, Total Value of Dwellings, June quarter 2026: median price of established house transfers and of attached dwelling transfers, Greater Melbourne, quarterly from September 2011, read 23 October 2026
- Cotality, Australian housing values down for sixth straight month in September, 1 October 2026: the national and Melbourne figures as at 30 September 2026, read 23 October 2026
- Moneysmart (ASIC), lenders mortgage insurance glossary entry, last updated 16 September 2019: LMI usually payable when the amount borrowed exceeds 80 per cent of the value, read 23 October 2026
The LVR bands of 60, 70 and 80 per cent describe pricing steps lenders commonly use and are Everstone’s own statement from placing loans; no lender is named on this page and no interest rate figure appears. Everstone Finance is not affiliated with the Bank for International Settlements, the Australian Bureau of Statistics, Cotality or Moneysmart.