Discover Australia’s Top 10 Regions Slashing Home Prices in 2023

The Australian property market appears to be experiencing a slump, spurred by the federal government’s planned tax changes. This downturn is reflected in the latest industry figures, which highlight notable price drops in several suburbs.

Research from REA Group indicates that the coastal suburb of Manly in Sydney has seen the largest jump in the number of homes sold below their asking prices over the past three months compared to the same timeframe in 2025.

The findings reveal that from March to May, 46.5% of homes in Manly were sold for less than the asking price, a significant rise from the 21.6% recorded during the same months last year.

The study focused on suburbs with over 30 property sales within the three-month period.

Among the top 10 areas witnessing increased sales of discounted homes are Baulkham Hill (NSW), Whitehorse East (VIC), North Sydney-Mosman (NSW), Botany (NSW), Pennant Hills-Epping (NSW), Merrylands-Guildford (NSW), Ku-ring-gai (NSW), Canada Bay (NSW), and Bayside (VIC).

REA Group’s senior economist Angus Moore said the changes were likely a result of three consecutive interest rate hikes by the Reserve Bank of Australia.

“I think what we are seeing here is quite consistent with home prices generally, which is that the more expensive areas on average see larger price falls when rates are rising,” he told SBS News.

Moore said it would be “a bit soon” to determine whether investor hesitancy over the proposed tax changes also contributed to the increased discounting in these areas. “We might have seen some pull back in investors’ demand, that probably hasn’t started flowing into home prices.”

In Manly, there was a 0.9 per cent drop in average home prices at the end of May compared to three months earlier. The suburb that recorded the biggest price drop was Merrylands-Guildford, which had a 2.2 per cent decline at the end of May compared to the three months to February.

“What we are seeing here is the modest decline in home prices, even in Sydney and Melbourne which have seen three consecutive price declines, prices are only down about 1.2 per cent across that spam, which is not a big change,” Moore said.

“So what we are seeing at the market is a slow but steady slowing in home prices, really being driven by the fact that we’ve seen three consecutive rate hikes, probably expecting one more.”

Moore also noted that housing stocks in Brisbane, Adelaide and Perth remain low, and competition for available properties continues to drive up prices.

In Sydney and Melbourne, competition remains strong in suburbs that recorded an increased share of homes being sold below asking prices.

On average, it took 31.1 days for properties in the top 10 suburbs/areas to be sold in May.

In Manly and Baulkham Hills, which recorded the biggest price falls over the past year, sellers on average had to spend an extra four or five days to clear their properties compared to three months prior.

“These sorts of areas are taking longer to sell homes, and are a bit more likely to be discounted,” Moore said.

Buyers have more negotiating power, expert says

However, with an expected pause from investors as they wait for the market response to Labor’s proposed capital gains tax changes, some buyers are reported to fear overpaying for a property and practice more caution over their decisions.

But June could also be the month when buyers could have the “highest negotiation power in the last few months”, according to associate professor Park Thaicheon from the University of Southern Queensland.

He said that while housing prices might not “go down as much” due to high demand, reduced competition from investors meant buyers could have more negotiating power.

He said buyers should be financially prepared.

But he said one rule always stands out: “Stick with your plan and your budget.”

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