On a more positive note, new housing supply is on the rise, with private home approvals increasing by 4.4% in September, reaching the highest level since August 2022.

The rental market is also softening, with rents decreasing in major cities, including a 0.6% drop in Sydney and a 1.5% decline in Canberra over the past three months.

Inflation figures for September indicated a slowdown in rent inflation to 6.6%, down from 7.1% in June, attributed to reduced net overseas migration and larger household sizes post-COVID.

Other cities like Darwin and Canberra also experienced minor declines in house values, with drops of 1.1% and 0.7%, respectively, while Perth saw a significant increase of 4% in October.

Similarly, Sydney's housing market saw a slight decrease of 0.1% in October, marking its first drop in 21 months.

Despite the recent decline, the median price of a home in Sydney remains high at $1.48 million, reflecting a 3.9% increase over the past year.

In October 2024, Melbourne's house values experienced a decline of 0.2%, contributing to a total decrease of 1.0% over the past three months and 1.8% since the same month last year, with the median value now at $928,808.

The downturn in Sydney's housing market is attributed to high borrowing costs, affordability pressures, and an increased number of listings.

The number of homes for sale has risen significantly, with listings in Sydney and Melbourne up 13% above long-term averages, while Perth's listings increased by 20.6%.

CoreLogic's research director noted that the decline in property values is primarily impacting more expensive homes, while first-time buyers and investors remain active.

Despite the implementation of stage 3 tax cuts in July, retail sales only rose by 0.1% in September, indicating that consumer spending remains cautious.

Amid these trends, KPMG's chief economist warned of a negative economic outlook based on the retail sector's performance, reflecting a deep recession in per-capita retail spending.