Commonwealth Bank stock faces record housing downturn forecast

Commonwealth Bank of Australia economists have sharply lowered their Australian housing outlook, extending a debate that matters for mortgage growth, household demand and credit quality. In an analysis published on Tuesday, November 3, and available through CommBank, senior economist Trent Saunders said the correction had become faster and broader than expected.

Commonwealth Bank stock traded at 102.45 euros on Lang & Schwarz at 09:45 CET on Wednesday, November 11, 2026.

Forecast Cuts Spread Across Australia

CommBank now expects national dwelling prices to fall 14% from peak to trough, compared with its September projection of 9%. The five-capital-city average is forecast to decline 15%. The bank said the downturn could become the largest in the history of its national monthly price series.

National dwelling values fell 1.2% in October, the seventh consecutive monthly decline, and stood 6.7% below their March peak. The five-capital-city index was 8.2% below its March peak. Sales over the past three months were 23% lower than a year earlier, while auction clearance rates across the combined capitals remained below 50%.

Brisbane And Perth Face Deepest Falls

The sharpest revisions concern Brisbane and Perth. CommBank raised its projected peak-to-trough decline for both markets to 18%, from about 8% in September. Sydney's forecast moved from 13% to 16%, while Melbourne and Adelaide are each expected to fall 13%, compared with 12% and 8% previously.

Saunders said tight underlying supply and demand support remained in place, but the speed of the reversal suggested that overexuberance had become a more important driver of the earlier upswing. Even after the projected declines, Brisbane and Perth prices would remain above their levels before the recent housing boom.

Higher Rates Extend The Adjustment

The Reserve Bank of Australia raised its cash rate by 25 basis points to 4.85% at its November meeting, its fifth increase of 2026. CommBank's latest housing forecasts assume that rate peak, compared with the 4.60% assumption used in September.

Saunders estimates that the higher rate path reduces national dwelling price growth in 2027 by 2 percentage points compared with a scenario in which rates peaked at 4.60%. For investors, weaker housing turnover and household demand could restrain credit growth, while higher rates may support lending margins. The balance between those effects will depend on repayment stress, credit quality and the eventual policy path.

Stabilisation Remains Distant

CommBank forecasts national dwelling prices to fall 8% over 2026 and another 3% in 2027. Saunders expects conditions to stabilise in the second half of 2027, supported by lower prices, higher rental yields, tight underlying housing supply and an eventual easing in monetary policy. The bank does not expect a material recovery at that point.

Australian equities remain the broader market backdrop for Commonwealth Bank investors; see Current market reports.

Further housing forecasts, bank analysis and company coverage are available in More news and analyses on Commonwealth Bank stock.