The total value of Australia’s residential property market fell by $34.1 billion during the June quarter, offering fresh evidence that higher borrowing costs are affecting housing conditions.

Australian residential dwellings were collectively valued at approximately $12.689 trillion at the end of the quarter, according to the Australian Bureau of Statistics.

The number of homes increased by 54,400 to approximately 11.53 million, but the mean dwelling price fell by $8,200 to $1,100,400.

A national average cannot describe conditions in every suburb or state. Property markets can move in different directions according to employment, supply, population growth and the types of homes being sold.

Nevertheless, a decline in the total value of housing is significant because property represents a large share of Australian household wealth.

Separate ABS figures show that the number of dwellings approved for construction fell by a seasonally adjusted 3.6 per cent in July to 17,687.

Private-sector house approvals declined by 4.2 per cent, while approvals for other private dwellings, including many apartments and townhouses, fell by 0.4 per cent.

Queensland recorded a 13.9 per cent monthly decline in total approvals, while New South Wales fell by 8.1 per cent. Victoria, South Australia and Tasmania recorded increases.

Building approvals are an early indicator of potential housing supply, but an approved development is not necessarily built immediately. Financing, labour availability, material prices and expected sales can all affect whether and when construction begins.

Higher {construction costs} can also make a project financially unviable even after planning approval has been obtained.

The combination of weaker property values and falling approvals creates a mixed outlook. Softer prices may eventually improve conditions for some buyers, but limited new supply can maintain pressure on rents and affordability.

Prospective buyers should avoid treating a national decline as proof that every property is becoming cheaper. Local comparable sales, building condition, owners-corporation obligations and borrowing capacity remain more important to an individual purchase.

Anyone considering a mortgage should also calculate repayments at a rate above the initial offer. This provides a clearer picture of whether the loan remains manageable if interest rates or household expenses increase.

Australia’s housing market has lost some momentum, but chronic affordability and supply difficulties remain unresolved.