The Australian housing market is currently facing what analysts describe as a historic downturn, with property values declining across the vast majority of the country. According to new data from Cotality, home prices are falling in more than 90% of Australian suburbs. This trend is largely attributed to a combination of rising borrowing costs, a weakening broader economy, and significant changes to the tax treatment of property investors.

Despite the severity of the housing market decline, the Reserve Bank of Australia is expected to proceed with a fourth interest rate hike. The central bank’s primary objective remains the control of inflation, even as the housing sector struggles under the weight of these financial pressures. Shane Oliver, the chief economist at AMP, suggests that the downward trajectory for home values is likely to persist for at least the next six to nine months. While the market is currently in a state of contraction, the long-term impact of these interest rate adjustments on the broader economy remains a subject of debate among financial experts.