Property prices fall pushing borrowers into negative equity

7News Just In · Aug 3, 2026 · 1m

Property values across major Australian capitals have fallen 2.8 per cent since their peak in March, with Melbourne and Sydney experiencing the steepest declines. Borrowers who used the government's five per cent deposit scheme face particular risk of negative equity, where property values fall below outstanding loan amounts. RBA Governor Michelle Bullock states that negative equity currently affects less than one per cent of borrowers, with markets not expected to stabilise until mid-next year when interest rate cuts are forecast.See omnystudio.com/listener for privacy information.