Back to Square One: Real Australian House Prices Have Made No Net Gain Since the 2022 Peak

Australian house prices are widely reported to have recovered strongly since the 2022 rate-hiking correction — and in dollar terms, they have. But newly available long-run data from the Bank for International Settlements, tracking Australian residential property prices back to 1970, shows a different picture once inflation is stripped out: in real, CPI-adjusted terms, the national price level in the March quarter of 2026 sits at almost exactly the same point it reached in the March quarter of 2022, before the correction began. Four years, and a full boom-bust-recovery cycle, has produced a net real gain of essentially zero.

Fifty-six years in one number

The BIS Residential Property Price index (covering new and existing dwellings across Australia’s eight largest cities, deflated using CPI, rebased to 2010 = 100) has been published quarterly since 1970. Over that full span the real index has risen from 31.3 to 141.9 — a 4.5× increase, equivalent to a compound real growth rate of roughly 2.7% a year. The nominal version of the same series rose 69× over the same period, an average of roughly 7.9% a year — the gap between the two is almost entirely CPI, at an implied average inflation rate of around 5.0% a year across the full 56-year window.

The round trip: 2022 to 2026

Zooming into the last seven years isolates the part of the chart that matters for the current market narrative. The real index peaked at 141.9 in the March quarter of 2022, fell 12.3% to a trough of 124.4 by March 2023 as the rate-hiking cycle took hold, then climbed steadily back — reaching 141.9 again by the March quarter of 2026. Nominal prices followed a shallower dip and a much steeper climb: down only to 171.7 at the trough (a 6.1% nominal fall), then up 25.9% from there to 216.1 by March 2026, a level 18.2% above the 2022 nominal peak.

Why the two stories diverge

The gap between the real and nominal readings is CPI, and CPI over 2022–2026 was not a footnote — it was a substantial share of the entire “recovery.” A household that bought at the March 2022 peak and holds the same property today owns an asset worth 18.2% more in dollar terms, but a general shopping basket costs correspondingly more too; on a purchasing-power basis, the property itself is worth almost exactly what it was worth four years ago. Neither figure is wrong — a vendor’s bank balance is nominal, a household’s sense of getting ahead is real — but they describe two different questions, and most public commentary on “the recovery” only ever answers the nominal one.

What this means for how the current cycle gets read

The 56-year series also puts the current moment in context: this is not the first time real prices have round-tripped without net gain. The chart shows multi-year flat and declining stretches in the mid-1970s, late 1980s to mid-1990s, and again through the 2010s — real property appreciation in Australia has historically arrived in concentrated bursts (the mid-1980s, early-to-mid 2000s, and 2020–2022 are the clearest examples on this data) separated by long stretches where nominal gains were mostly, or entirely, inflation. The 2022–2026 window is a textbook case of that pattern, not an exception to it. Whether the next real leg up has started, or whether 2026 marks another plateau, is not something this series can answer on its own — but it does mean that a nominal headline in isolation is not a reliable guide to whether the market is actually “back,” and any commentary built on the nominal figure alone should be read with that in mind.

Findings are presented on the basis of data and evidence alone.