Sydney prices fell 4.2% in the quarter but unemployment remains healthy at 4.4%. CBA's record $10.98bn profit and low arrears suggest market stress hasn't reached crisis levels. All Ords pulled back 0.67% after a record high.
Sydney prices fell 4.2% over the latest quarter and Melbourne dropped 3.5%, pushing the five-capital-city aggregate down 2.7%, according to data cited by Dale Gillham, chief analyst at Wealth Within. The declines look sharp in isolation, but the five-city measure remains 3.2% higher than a year ago. Australia's real house price index rose roughly 26.5% between March 2016 and March 2026, which undercuts the case that the market is in crisis.
The bank earnings season painted a more nuanced picture. Commonwealth Bank of Australia posted a record $10.98 billion full-year cash profit. Mortgage applications fell 15% since the May budget at CBA, and 12% at ANZ, but business lending grew at CBA. Unemployment sits at 4.4%. CBA's 90-day-plus home-loan arrears were 0.73% and ANZ's were 0.86%, figures that suggest financial pressure is building without triggering widespread distress, Gillham said.
"Property markets don't normally crash simply because prices fall for a few months," he wrote. "The real danger comes when economic conditions deteriorate to the point where large numbers of homeowners can no longer service their mortgages."
The broader equity market took a breather this week after hitting a new all-time high. The All Ordinaries Index ended Thursday 0.67% lower. Gillham pointed to previous pullbacks of 8% and 10% after record highs in October 2025 and February 2026, calling this week's decline a normal correction. He identified the 9,200 level on the All Ords as the key support to watch.
Utilities were the best-performing sector, rising more than 6% on moves in AGL and Origin Energy. Healthcare and Energy each gained over 3%. At the other end, Financials fell 3% as weaker loan applications weighed on bank stocks. Communication Services dropped 1% after Telstra's earnings release. Industrials fell 1.5%.
Cleanaway Waste Management led the ASX Top 100 gainers, jumping more than 14% on a takeover proposal from EQT Infrastructure. ResMed climbed over 10% and Origin Energy gained over 9% after its FY27 guidance. Life360 was the worst performer, falling more than 17%, while SGH and SEEK each lost over 9% after issuing weaker outlooks.
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