- The NAB Residential Property Survey index fell 18 points to -4, entering negative territory for the first time in six years.
- Property professionals expect house prices to fall 4.2% during the next 12 months, while rents are expected to rise 3.7%.
- Construction costs remain the largest barrier to new housing development, cited by 77% of respondents, while interest rates rose to second place at 58.3%.
Australia's property professionals expect further house price declines as interest rates and construction costs weigh on housing market confidence, according to the latest NAB Residential Property Survey.
The index fell 18 points to -4 in the September quarter. It was the third consecutive quarterly decline and the first negative result in six years.
NAB Chief Economist Dr Sally Auld said the survey showed housing market sentiment had weakened across most states and forward-looking measures.
"Property professionals have lowered their expectations for house prices, while rental growth is expected to remain elevated.
"Construction costs and interest rates are also continuing to constrain new housing development," Dr Auld said.
Property professionals expect house prices to fall 4.2% over the next 12 months, compared with a 2.5% decline forecast in the June quarter.
Rental growth expectations remained elevated but eased slightly. Respondents expect rents to rise 3.7% over the next year (down from 3.9% in Q2) and 4.0% in 2 years' time.
Construction costs remained the main barrier to starting new housing developments, cited by 77% of property professionals. The level of interest rates is now cited as the second-largest constraint at 58.3%, ahead of planning permit delays at 54.1%.
The survey also found owner occupiers continued to account for the largest share of buyers in new and established housing markets. Local investor activity increased slightly during the quarter but remained below levels recorded in late 2025.
Dr Auld said the findings highlighted the pressure facing housing supply and affordability.
"Weaker price expectations don't remove the underlying supply challenge. High construction costs, interest rates and planning delays continue to make new development more difficult," Dr Auld said.
Two-thirds of property professionals said stamp duty was a barrier for first or newer home buyers. Sixty-one per cent said it encouraged people to remain in their current home, while 43% said it discouraged downsizing.
The full NAB Residential Property Survey Q3 2026 is available here (PDF, 3MB).