OpinionJuly 3, 2026 — 5:00amI shouldn’t be celebrating the slowdown of the Australian property market. I just bought my first home six months ago and am mortgaged up with nearly half of my income going towards repayments. If you count the strata fees, my housing costs are closer to 60 per cent of my pay cheque after tax.Is that fun? Well, not hugely. And I’d be lying if I said the habit I picked up during my house-hunting days of checking the going prices in my area, and my building, has disappeared. I still regularly scan real estate listing websites to see whether I snagged a bargain – hint: I didn’t – and to get an indication about whether the decades of mortgage repayments ahead of me will be made up for by growth in the value of my property when (hopefully one day) it comes time to upsize.National dwelling prices fell in June.Joe ArmaoThis week, we learnt from property data firm Cotality that national dwelling values fell 0.4 per cent in June: the biggest monthly decline since December 2022 (back when the Reserve Bank was raising interest rates very quickly to stamp out inflation). Dwelling values slid 1.2 per cent in Sydney last month and 1 per cent in Melbourne, while those in Brisbane and Perth continued to grow, but at a much slower pace.But hold on. Didn’t the government say its big tax changes in the May federal budget would only slow house prices, not tank them?Well, yes, and it’s still possible that we’ll see exactly that by the time the next federal budget rolls around.One month – or even a few – of data should not have us hitting the panic button. Why? First, because one data point, which could have been an anomaly or measurement error, is not as reliable as a string of data confirming a broader trend. But second, especially when it comes to the value of homes, we’re probably seeing a bit of a temporary shock.That is, some people – investors in particular – who were benefiting from tax concessions such as the capital gains tax discount and negative gearing, have probably put a pause on their buying while they figure out what’s going on, but will come back into the market once they have a better idea of where things have landed.It’s also possible that many of them knew there would be a slowdown or fall in the value of homes and are now waiting to “buy the dip”: looking to snag a bargain once property values hit rock bottom so that they can benefit from the momentum once prices start rising again. In the meantime, they may have decided to park their money elsewhere, such as a bank account where they can benefit from higher interest rates.That’s the other thing to remember. The fall in home values isn’t all because of the government’s “disgraceful” tax changes – although comedian Dave Hughes and entrepreneur Mark Bouris have put the government under siege over the policies.Comedian Dave Hughes has criticised the government’s tax changes,Matt DavidsonThe tax changes came at a time when the Reserve Bank started very quickly ramping up interest rates (much like 2022) to tame inflation which rose last year and was made worse by the Iran war. That, of course, has had a substantial effect on house price growth because it has made it harder for some people to take out a loan.But we’re unlikely to see interest rates stay high forever, especially if – as both the Reserve Bank and Treasury forecast – inflation is on its way down later this year and into 2027. Some of the fall in home values is probably a response to the three consecutive cash rate hikes we’ve seen this year, which the banks lending to you and me have been more than happy to pass on in full to interest rates on mortgages.That also means that once interest rates start to fall again, we’re likely to see home values start rising (or for their decline to soften). And once that begins to happen – and investors are more confident about the direction of the market – we’ll probably see house prices start rising again as more people who are able, (but not willing right now) to buy property, start to reignite demand.That’s also not to mention the fall in population growth: one of the drivers of house prices when we’re not building enough homes to keep up.Net overseas migration – very simply put, the number of people coming into Australia minus those leaving (excluding visitors or tourists) – fell from 311,000 in the year to September 2025 to 301,000 in the year to December 2025. That’s also much lower than the 556,000 in the year to September 2023.Many of the people who were complaining about immigrants making housing unaffordable now seem disgruntled that the value of their properties is sinking.The Reserve Bank’s interest rate rises have also slowed the property market.AFRIn short, I’m not convinced that we’ve forever spooked investors away from our property market and consigned ourselves to a housing freefall.The pain point is where people who only recently bought their home find themselves in negative equity (where the value of their home is lower than the amount left for them to pay off their loan).For most of these people, they’ll just be worse off on paper for a while until property values inevitably start climbing again, even if the growth is slower than it would have been without the tax changes.But if these people are forced to sell because they have lost their job and can no longer keep up with repayments, it could mean the sale price of their home doesn’t pay off their mortgage, leaving them with a pile of debt.It is also important to remember, though, that improved housing affordability is something we’ve wanted for a long time.Sure, some people are convinced that anyone who works hard can afford to buy a home if they really want to – and that those who can’t are simply not disciplined enough. Try doing that on minimum wage.And even for people who are earning closer to the average, the reality is that buying a home has undeniably become harder over the past few decades.In the 1970s, the average house cost about 4.5 times the average annual wage. An average house today is closer to 14 times the average annual wage.The slowdown in home values is part of the fix we need to make sure housing affordability doesn’t continue to worsen at the rate it has for many years.Improving housing affordability will come with a lot of benefits including reducing inequality, boosting our productivity growth (our ability to get more out of our people and resources), and making sure more Australians have a fair go at buying their own home.While the government’s tax changes were a much-needed and brave reform, the reality is that effect won’t be anywhere near as spectacular for aspiring homebuyers (or disastrous for home owners) as some of the panic might have you believe. Even if home values plunged 10 per cent, that would only take us back to where we were in 2024.Having bought at the peak, I’m not popping champagne over my bank balance, but after being on the other side until very recently, I’m hopeful more Australians will get the chance to join me (maybe even buying the dip) – that’ll be something to celebrate.The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.Millie Muroi is the economics writer at The Sydney Morning Herald and The Age. She was formerly an economics correspondent based in Canberra’s Press Gallery and the banking writer based in Sydney.Connect via X or email.From our partners