Week 1 — 29 December 2025 - 04 January 2026

Inflation Eases Slightly But RBA Still Watching Closely

What Happened This Week

Recent data showed Australia’s CPI inflation dipped, reflecting some relief in price pressures. Annual inflation dropped from 3.8% to 3.4%, but economists warn this relief may be temporary.

Why It Matters

Inflation data influence the RBA’s monetary decisions. While a dip is good news, persistent price pressures in services and housing mean the RBA may still sit tight.

Who It Affects

• Borrowers with variable rates won’t feel immediate relief

• Property investors pricing cash flows must account for higher service costs

• Business lenders watching operating costs

Broker Insight

This type of inflation result keeps the RBA on hold rather than moving to cuts or hikes. Markets are pricing in a cautious outlook through early 2026.

What You Should Do Next

• Review cash flow plans in light of ongoing cost pressures

• Consider locking rates where it makes sense

• Talk to a broker about your refinancing windows

Week 2 — 05 - 11 January 2026

RBA Deputy Governor Signals End of Rate Cuts - What Borrowers Should Know

What Happened This Week

The Reserve Bank’s Deputy Governor said that near-term interest rate cuts are unlikely - despite inflation easing modestly - because inflation remains above target and the RBA wants sustained evidence before easing monetary policy.

Why It Matters

Fixed and variable borrowing costs have been a key focus for borrowers, and many are watching for rate relief. However, the RBA’s current stance suggests no imminent rate cuts, meaning borrowing costs may stay higher for longer.

Who It Affects

• Home buyers and investors: No quick drop in mortgage costs yet

• Refinancers: Plans to refinance to lower rates might need patience

• Business and SMSF borrowers: Cost of funds remains steady

Broker Insight

Even if headline inflation eases, central banks focus on underlying inflation and future outlook. The RBA is cautious, and its priority remains price stability rather than short-term borrower relief.

What You Should Do Next

• Lock in competitive fixed rates if your strategy suits

• Review borrowing strategies with your broker - especially for SMSF and business loans

• Don’t chase rates; align choices to financial goals

Week 3 — 12 – 18 January 2026 

Fixed Rates Rise as Lenders Brace for RBA Decision 

What Happened This Week

This week, the lending and economic landscape continued to evolve, with lenders and economists expressing a cautious outlook on interest rates amidst changing competition and lending dynamics. Fixed home loan rates from several major lenders have risen as markets anticipate a possible cash rate increase from the Reserve Bank of Australia (RBA) in early February. For instance, both the Commonwealth Bank of Australia and Macquarie Bank have raised their fixed-rate offers ahead of the upcoming RBA decision. Analysts now see a greater likelihood of a rate hike during the RBA's meeting on February 3.

Additionally, we are seeing shifts in lending policies across the market. ANZ has tightened its lending criteria for companies and trust structures, lowering maximum loan-to-value (LVR) ratios and adjusting eligibility requirements for new trust and company home loans. This move reflects a broader trend among banks to reassess risks associated with non-standard borrower structures.

Non-bank lenders are experiencing strong growth in loan originations through brokers, with these originations accounting for approximately 75% of loan settlements. This trend is driven by brokers increasingly turning to alternative lenders to help borrowers with tighter deposit or credit profiles.

Moreover, the small and medium-sized enterprise (SME) lending market is expanding. Renown Lending has significantly increased its national funding pool to support cash flow, asset-backed loans, and short-term property loans across multiple states, highlighting the rising demand for non-bank business lending solutions.

Why It Matters

Interest Rate Expectations: The recent movement in fixed loan pricing ahead of the RBA meeting indicates that lenders are preparing for potentially higher cash rates. Borrowers who plan to fix their rates should be aware that pricing is already changing, which can impact refinancing decisions, loan strategies, and budgeting for repayments.

Trust and Company Structures: Stricter policies regarding loans through trust and company structures by major banks mean that investors using these arrangements may need to reevaluate their borrowing strategies or consider alternative lenders.

Broker Market Dynamics: Brokers play a crucial role in facilitating new settlements. Consequently, competitive alternatives to major banks are becoming increasingly vital, particularly for borrowers facing deposit or credit constraints.

SME Lending: The growth of non-bank lending options to support small and medium enterprises reflects a shift toward more flexible funding sources outside traditional banking channels. This trend could benefit business borrowers seeking customised financing solutions.

Who It Affects

• Home buyers: especially those considering fixed rate options

• Property investors: with trust or company structures

• Refinancers: evaluating when and how to refinance

• SMSF property borrowers: relying on alternative lending options

• Business owners: looking for SME funding and cashflow finance

• Brokers: advising clients on lender panel options and strategy

Broker Insight

With markets now eyeing the RBA’s February meeting closely, lenders are pre-emptively adjusting pricing and tightening certain credit policies. This environment emphasises the importance of proactive planning. Borrowers considering locking in fixed rates should weigh the timing of these moves against their personal cash flow and risk tolerance. Likewise, investors using trusts or company structures need to understand new eligibility requirements and engage with brokers early to explore all available channels-including non-bank lenders where appropriate. Competitive lender panels and broker expertise continue to be valuable in navigating these nuanced policy shifts.

What You Should Do Next

• Review cash flow plans in light of ongoing cost pressures

• Explore non-bank options

• Talk to a broker about your refinancing windows

Week 4 — 19 – 25 January 2026 

Variable Rates Jump as Lenders Move Ahead of RBA Meeting  

What Happened This Week

This week, Australia’s home loan market experienced a sharp shift as more than 50 lenders increased variable and fixed home loan rates, signaling growing confidence that interest rates may rise again soon. The widespread repricing comes as financial markets increasingly factor in the possibility of a 25 basis point cash rate increase at the Reserve Bank of Australia’s February meeting.

Unlike previous cycles where only fixed rates moved first, this round of changes has seen variable rates lifted across a broad range of lenders, including major banks, second-tier lenders and non-banks. In many cases, these increases were applied outside of any official RBA decision, reflecting higher wholesale funding costs and heightened risk pricing by lenders.

At the same time, the number of fixed-rate home loan options below 5% has fallen sharply, reducing choice for borrowers seeking repayment certainty. Several lenders have also adjusted credit appetite, tightened serviceability buffers, or repriced investor and interest-only products more aggressively than owner-occupied loans.

Together, these changes point to lenders preparing balance sheets for a potentially higher-rate environment, regardless of whether the RBA ultimately moves in February.

Why It Matters

Variable Rate Pressure:
Borrowers on variable rates are now feeling increases without any official cash rate change, meaning repayments can rise even before the RBA acts.

RBA Expectations:
The scale and speed of repricing across more than 50 lenders suggests markets are no longer neutral on rates. Lenders are acting early to protect margins ahead of a possible policy shift.

Refinancing Windows Narrowing:
As variable and fixed rates both trend higher, borrowers considering refinancing may find fewer competitive options if they delay.

Lender Risk Management:
The repricing highlights lenders becoming more selective, particularly for investors, higher-LVR loans and complex borrower profiles.

Who It Affects

• Variable-rate home loan borrowers

• Borrowers nearing the end of fixed-rate periods

• Refinancers comparing lender options

• Property investors facing higher holding costs

• First-home buyers assessing borrowing capacity

• Brokers supporting clients through rate volatility

Broker Insight

This week’s broad-based variable rate increases are a clear signal that lenders are no longer waiting for the RBA to act. Funding costs, global uncertainty and inflation risk are all being priced in ahead of time. For borrowers, this reinforces the importance of reviewing loan structures regularly rather than reacting after rates move.

With competition tightening and lender policies diverging, broker guidance is critical. Some lenders remain competitive for certain borrower profiles, while others are pulling back quietly. Understanding where flexibility still exists - particularly among non-bank lenders - can make a meaningful difference in repayment outcomes and long-term strategy.

What You Should Do Next

• Review your current variable rate and repayment impact

• Assess whether refinancing still delivers a net benefit

• Explore fixed, split or alternative lending options

• Speak with a broker before further rate changes occur

Week 5 — 26 January – 01 February 2026 

Mortgage Pressure Is Rising - Australian Homeowners Are Feeling the Strain  

What Happened This Week

More than one-third of Australian homeowners are now experiencing mortgage stress, according to recent industry and market reports. Rising living costs, higher interest repayments, and reduced household buffers are placing sustained pressure on borrowers as expectations of further interest rate tightening remain.

While many borrowers are still meeting their repayments, a growing number are cutting back on essentials, dipping into savings, or actively seeking relief options such as refinancing or loan restructuring.

Why It Matters

Mortgage stress at this level signals broader financial strain across the economy. Even borrowers who are not missing repayments are becoming increasingly vulnerable to future rate rises or unexpected expenses.

This environment increases the risk of:

• Missed repayments

• Forced property sales

• Reduced borrowing capacity

• Slower housing market activity

It also places greater importance on proactive loan management rather than a “set and forget” approach.

Who It Affects

This trend is impacting a wide range of borrowers, including:

• Homeowners on variable-rate loans

• Borrowers who purchased at higher property prices over the past few years

• Households with reduced savings buffers

• Investors facing higher holding costs and tighter rental yields

• First home buyers with limited financial flexibility

Even borrowers who are currently comfortable may be affected if rates rise further.

Broker Insight

Many borrowers are paying significantly more than they need to. In a competitive lending market, better options may be available — including lower rates, alternative lenders, or loan structures better suited to current conditions.

Lenders are also more open to discussions around hardship support, refinancing, and loan reviews before repayments become unmanageable. Acting early creates more options and stronger outcomes.

What You Should Do Next

If you have a home loan or investment loan, now is a smart time to:

• Review your current interest rate and loan structure

• Check whether refinancing could reduce repayments or improve cash flow

• Ensure your loan still suits your financial goals

• Stress-test your repayments against potential future rate increases

A proactive loan review can help you stay ahead of rising costs and protect your financial position.

03 February 2026 

BREAKING: RBA Raises Official Cash Rate – What This Means Now  

What Happened This Week

As expected, the Reserve Bank of Australia (RBA) has lifted the official cash rate by 25 basis points, raising the cash rate from 3.60% to 3.85% at its first monetary policy meeting of 2026. This marks the first rate increase in over two years, reversing part of the easing cycle that dominated 2025 as inflation pressures have resurfaced. 

Why It Matters

• Higher borrowing costs for households
  The rate rise will mean higher borrowing costs for mortgage holders, especially those on variable rates. For example, the typical Australian borrower with a $500,000 home loan could see monthly repayments increase by around $79, while a $1 million mortgage could add around $158 more per month — once banks pass on the move.

• Inflation remains above target
  The decision reflects the RBA’s response to inflation remaining stubbornly above its 2–3% target, with the central bank signaling ongoing economic resilience but persistent price pressures.

• Markets had largely priced in a hike
  Major banks and markets had widely expected the rate rise as inflation data surprised to the upside in late 2025, ending speculation of further cuts early in 2026.

Who It Affects

• Homeowners with variable rate loans — will likely see the fastest impact on monthly payments.

• Prospective home buyers — may face reduced borrowing capacity and higher serviceability costs.

• Investors and property markets — could experience slower price growth as financing costs increase.

• Business and consumer sentiment — may soften if tighter financial conditions persist.

Broker Insight

This decision highlights the importance of proactive loan management in a shifting monetary policy environment. Variable rate holders may see repayments increasing over the coming months, and brokers should prepare to support clients with:

• Refinancing reviews

• Rate comparisons

• Loan structure optimisation

• Borrowing capacity reassessments

With inflation still above target and economic data evolving, there remains the possibility of further tightening this year if price pressures persist.

What You Should Do Next

• Check your loan settings
  If you have a home loan, investment property loan, or line of credit, now is an ideal time to review your interest rate, loan features, and repayment structure.

• Speak with your broker
  A rate rise can change a borrower’s capacity and cash flow position — professional guidance can help you plan ahead rather than react later.

• Plan for serviceability
  Use up-to-date repayment stress tests to ensure your finances remain comfortable, even if rates move higher.

Week 6 — 02 – 08 February 2026 

Housing demand holds firm even as lending conditions tighten   

What Happened This Week

Housing demand has started the year strongly, with buyer enquiries and applications remaining resilient despite tighter credit conditions and cautious lender behavior. While serviceability tests have become tougher, underlying demand, particularly from investors and first-home buyers, remains robust.

Major banks lift mortgage rates in response to RBA policy shifts
Australia’s four big banks  CBA, Westpac, NAB and ANZ have increased variable home loan rates by ~25 basis points following the RBA’s recent interest rate rise, pushing borrowing costs higher for both new and existing mortgage holders.

RBA interest rate trajectory draws attention
After the RBA lifted the cash rate to 3.85%, commentators are watching for further tightening to tackle elevated inflation levels. This shift signifies a potential reversal in the previously easing rate environment, giving lenders reason to price accordingly.

Why It Matters

• Borrowers are paying more: The pass-through of official rate moves into home loans means higher monthly repayments for new and existing borrowers, particularly those on variable rates.

• Lending standards are tightening: Even with strong demand, lenders are increasingly cautious in serviceability assessments, affecting borrowing power and loan approvals.

• Investor and owner-occupier appetites differ: Investor activity - a major driver of overall housing finance remains strong. At the same time, some owner-occupiers are more sensitive to rate changes and tighter credit checks.

These dynamics combine to create a market where demand persists but access to finance is more selective and costlier.

Who It Affects

1. Current mortgage holders
Rising variable rates translate to higher repayments, squeezing household budgets, especially for those with limited cash buffers.

2. New home buyers
Tighter lending conditions and serviceability tests mean some buyers may be approved for smaller loans than expected, or face more scrutiny over income and expenses.

3. Property investors
With lenders still competing for investor dollars and brokers reporting strong investor interest, this cohort continues to shape lending volumes, but may face stricter terms if regulators push back on high-geared borrowing.

Broker Insight

"We’re seeing more borrowers reassess their affordability targets as lenders tighten credit conditions. But demand, especially from investors and those refinancing, remains strong. Savvy structuring and early engagement are key in this environment". 

What You Should Do Next

If you have a home loan or investment loan, now is a smart time to:

• Review your current interest rate and loan structure

• Check whether refinancing could reduce repayments or improve cash flow

• Ensure your loan still suits your financial goals

• Stress-test your repayments against potential future rate increases

A proactive loan review can help you stay ahead of rising costs and protect your financial position.

Week 7 — 09 – 15 February 2026 

Rising Rates, Strong Auctions, and a New Opposition Leader    

What Happened This Week

Major banks passed on the latest Reserve Bank of Australia (RBA) cash rate increase, lifting mortgage repayments and tightening household budgets. Higher interest rates are also reducing borrowing capacity, affecting buyer power even among serious purchasers.

Cost-of-living pressures persist as inflation remains above target and tighter credit assessments influence borrowing behaviour.

Despite these pressures, auction clearance rates remain strong, averaging about 73.7% across combined capitals. Sydney recorded particularly strong results (approaching 80%), while Adelaide continued to deliver solid outcomes, demonstrating resilience even as loan costs rise.

Property values are showing mixed signals. While tighter monetary conditions may slow momentum, sustained buyer demand and strong clearance rates suggest stability rather than sharp declines. Smaller capital cities continue to provide price support.

Political Shift: Angus Taylor’s Leadership & Implications for Property 

Angus Taylor has become Leader of the Opposition, replacing Sussan Ley after a party leadership spill. Taylor has emphasised cost-of-living relief, housing affordability, and economic reform as priorities.

Policy Direction That May Impact Housing

• Restoring home ownership as a national priority, particularly for younger Australians.

• Reducing regulatory barriers and streamlining development approvals to improve housing supply.

• Opposing policy changes viewed as negative to property investors, including potential tax increases.

Why It Matters

Rising interest rates are increasing repayments and reducing borrowing capacity.

Strong auction clearance rates indicate ongoing demand despite higher costs.

A housing-focused policy direction from the new Opposition leadership may influence investor confidence and long-term market stability.

Who It Affects

• Home Buyers: Higher rates and tighter credit tests impact borrowing capacity and repayments.

• Property Investors: Policy direction may influence long-term confidence and investment strategy.

• Sellers: Strong activity continues, but pricing must reflect affordability constraints.

• Mortgage Brokers & Lenders: Guidance on rates, serviceability, and lender options remains essential. 

Broker Insight

• Buyer activity remains strong in markets with high clearance rates despite rising repayments.

• Lending conditions are diverging: first-home buyers face tighter constraints, while cash-ready investors remain less affected.

• Greater political clarity and housing supply focus could support investor confidence over the next 12–18 months.

What You Should Do Next

• Buyers: Review borrowing capacity, consider fixed-rate options, and consult a broker for competitive deals.

• Sellers: Monitor auction trends and price strategically to attract buyers in a rate-sensitive market.

• Investors: Track Taylor’s housing policy announcements and target markets with strong clearance rates.

Week 8 — 16 – 22 February 2026 

The Borrowing Power Shock: Why Pre-Approvals Are Coming in Lower - and What Smart Buyers Are Doing About It    

What Happened This Week

Borrowing capacity surprises are rising across the market
More buyers are discovering their borrowing power is lower than expected when seeking pre-approval. Lenders continue applying conservative serviceability buffers and detailed expense verification, which can significantly reduce maximum loan amounts.

Living expense benchmarks and credit scrutiny remain strict
Banks are closely reviewing spending patterns, discretionary expenses, and existing debts. Even unused credit card limits and buy-now-pay-later facilities are impacting borrowing capacity.

Lender policy differences create vastly different outcomes
Borrowing limits can vary widely between lenders due to how income types, rental income, bonuses, overtime, and self-employed earnings are assessed.

Small debts have big impacts
Car loans, personal loans, HELP/HECS debt, and credit cards are increasingly affecting borrowing power and approval outcomes.

Why It Matters

• Borrowing power may be 15–25% lower than buyers expect.

• Stricter expense verification reduces maximum loan eligibility.

• Lender policy differences mean choosing the right lender is critical.

• Buyers relying on outdated borrowing estimates risk missing opportunities.

Who It Affects

• First-home buyers
  May need to adjust expectations, budgets, or purchase locations.

• Upgraders
  Higher existing debt levels and family expenses can reduce borrowing capacity.

• Property investors
  Portfolio expansion may require strategic structuring and lender selection.

• Self-employed borrowers
  Income assessment methods can significantly influence approval outcomes.

Broker Insight

Borrowing power is no longer a simple calculator figure.

We’re seeing:

• Buyers pre-approved for less than expected

• Major differences between lender servicing models

• Credit card limits and personal debt-reducing capacity

• Strategic loan structuring is becoming essential

Preparation and lender strategy now matter more than ever.

What You Should Do Next

• Get pre-approved before property shopping to understand your true budget

• Reduce credit card limits and personal debt to improve borrowing power

• Avoid taking new finance (personal and car loans, credit cards, and BNPL) before applying

• Work with a broker to compare lender policies and maximise capacity

• Review your expenses - spending patterns now affect approvals

Week 9 — 23 February – 01 March 2026 

Investors on Alert: Tax Changes Loom as Auction Momentum Softens    

What Happened This Week

Negative Gearing Reform Back in Focus

The federal government is now actively exploring changes to negative gearing ahead of the May federal budget. Treasury is reportedly modelling a policy that could limit negative gearing to a maximum of two investment properties and possibly combine this with changes to the capital gains tax (CGT) discount for property investors. No final decision has been made, but both issues are very much on the table.

Auction Clearance Rates & Buyer Demand

Recent auction data and reports indicate more mixed results compared to late 2025. While clearance rates remain relatively strong in many markets, anecdotal evidence suggests that some auctions are experiencing lower outcomes, with buyers becoming more hesitant or transactions stalling. This shift may be influenced by borrowers considering potential interest rate increases and changes in policy.

Interest Rate Expectations Impacting Demand

Major lenders have lifted fixed mortgage rates, potentially reflecting expectations of further RBA cash rate increases. This dynamic tends to pull some buyers out of auctions and shift activity toward private treaty sales.

Compliance & Macroprudential Lending Controls

Regulatory tightening, which includes implementing higher serviceability buffers, limits on specific types of interest-only lending, and checks on investor loans, continues to reduce credit availability for certain borrowers, especially higher-risk investors. This directly affects who can obtain loans and the amounts they can secure.

Property Prices Holding Up

Property prices continue to rise in many areas, especially in smaller capital cities and regions, despite pressure on rates. In contrast, Sydney and Melbourne show relatively flat month-to-month gains compared to the explosive growth of recent years.

Why It Matters

• Tax Policy Could Reshape Investment Demand Limiting negative gearing and/or reducing the CGT discount would change the incentives for property investors. This could remove some speculative pressure on market demand, potentially slowing capital growth especially if implemented without grandfathering provisions.

• Auction Outcomes Signal Confidence Shift

Auction clearance rates serve as a real-time indicator of demand. When these rates soften or remain static despite limited inventory, it suggests that buyers are becoming more cautious due to factors like rate expectations, compliance issues, or policy risks.

• Lenders & Brokers Adjusting to Tight Conditions

Banks tightening lending conditions and increasing serviceability requirements mean less discretionary borrowing capacity, especially for high-LVR or investor loans. This can reduce competition in some segments of the market.

Who It Affects

• First-Home Buyers

  • High interest rates + tighter lending criteria remain a barrier.

  • Negative gearing reform could, in theory, reduce investor activity and make it slightly easier to compete, though price effects would be gradual.

• Buyers at Auction

Auction clearance rates are still relatively healthy, but buyers are more selective, and conditional buyers may win negotiating leverage if vendor confidence softens.

• Investors

Potential negative gearing caps and CGT changes loom largest here. Owners with multiple properties may need to reassess portfolios if reforms are enacted.

Broker Insight

• Negative Gearing & CGT Discussions:

Initial modelling indicates that any cap may include complex grandfathering rules, which accountants will need to clarify for investors.

• Auction Strategy:

If clearance rates dip - even seasonally - brokers can assist clients to position offers outside the auction (pre-auction offers) or extend conditional periods to mitigate pricing risk.

• Compliance & Servicing:

Serviceability buffers and macroprudential checks remain high. Brokers should prepare clients in advance with documentation and manage expectations about borrowing capacity.

What You Should Do Next

For Buyers

• Stay updated on developments regarding negative gearing and Capital Gains Tax (CGT). Even minor announcements or leaks can quickly change market sentiment.

• Check auction trends in your target suburbs weekly. A slight decline in auction performance could indicate an increase in your negotiating power.

For Investors

• Run scenario analysis for your portfolio under possible tax reform outcomes (e.g., cap at 2 negatively geared properties).

• Consider transition planning if reforms pass, like restructuring loans or holding periods.

Week 10 — 02 – 08 March 2026 

Share Market Falls, Property Holds as Market Uncertainty Grows     

What Happened This Week

Share Market Volatility

The Australian share market had a rough week, with the S&P/ASX 200 falling about 4%, wiping billions off market value as global investors reacted to geopolitical tensions and rising oil prices.

This volatility is also impacting superannuation balances, as many funds are heavily invested in equities.

Auction Clearance Rates

Auction activity increased as the autumn selling season ramped up.

Latest reported results show:

• National clearance rate: around 57–65%

• Sydney: around 60–65%

• Melbourne: around 65–70%

• Adelaide and Brisbane remain stronger.

A weekend report showed over 500 auctions with a clearance rate of about 57%, indicating demand remains present but buyers are becoming more selective.

Overall, the market is shifting toward a more balanced environment, rather than the aggressive bidding seen in previous cycles.

Inflation Results
Australia’s latest inflation data still shows inflation above the RBA’s target range, keeping pressure on interest rate policy.

Key drivers:

• Housing costs

• Energy prices

• Insurance and services

Inflation remaining sticky means rate cuts are unlikely in the short term.

Interest Rate Prediction
Markets are now watching the next Reserve Bank meeting closely.

Current expectations:

• March meeting: small chance of a rate hike

• May meeting: considered the more likely timing if inflation stays high

Economists expect the RBA to wait for additional inflation and wage data before making the next move.

Property Market Prediction 

Property market is currently showing a two-speed pattern:

• Stronger markets in Brisbane, Adelaide and  Perth

• Slower growth in Sydney and Melbourne

Entry-level housing remains highly competitive due to population growth, rental shortages, and limited supply.

Overall forecasts suggest modest price growth in 2026, rather than a rapid boom or crash.

Why It Matters

Several forces are shaping the market right now: 

• Global uncertainty is creating volatility in share markets and superannuation. 

• Inflation pressures are delaying interest rate cuts. 

• Housing supply shortages continue supporting property prices. 

This combination means the property market is likely to remain resilient but cautious. 

Who It Affects

• First-home buyers
  Competition remains strongest in entry-level properties, especially in affordable suburbs. 

• Property investors
  Many investors are exploring real assets like property as a hedge against share market volatility. 

• Homeowners
  Borrowers should remain aware that interest rates may stay higher for longer. 

• SMSF Investors

Some SMSF trustees are reviewing their portfolios as share market volatility impacts super balances, though there is no evidence of widespread panic buying of property yet. 

Broker Insight

The current market behaviour can be described as:

“Selective confidence, not panic.”

Buyers are active where:

• Properties are affordable

• Rental yields are strong

• Population growth is high

However, uncertainty around interest rates is making buyers more cautious and price-sensitive.

What You Should Do Next

• Buyers: 

  • • Secure pre-approval early as lending policies may tighten 

    • Focus on suburbs with strong population growth

• Investors:

  • • Watch rental markets where yields remain strong

    • Review borrowing capacity before rates potentially rise again

• Homeowners:

  • • Review loan structures and refinancing options

    • Consider fixing part of your loan if rate risk increases

Week 11 — 09 – 15 March 2026 

Rate Hike Looms, Auction Market Softens, and Global Tensions Add Inflation Risk      

What Happened This Week

Inflation Pressures Remain Persistent

Recent data continues to show inflation sitting above the RBA’s target range of 2–3%, with energy, housing, and insurance costs remaining major contributors.

Higher global energy prices, partly linked to geopolitical tensions in the Middle East, are also adding to inflation risks. If oil prices remain elevated, this could delay interest rate cuts and potentially trigger further tightening.

For Australian households, rising petrol, energy, and transport costs continue to drive cost-of-living pressure.

Auction Clearance Rates

Auction activity remained strong across major cities, although clearance rates softened slightly compared with earlier weeks. 

Latest reported results show:

• Canberra about: 59%

• Sydney: around 68% 

• Melbourne: around 63% 

• Brisbane: around 44% 

• Adelaide about: 72%.

National clearance rates remain around the low-60% range, suggesting a balanced market where buyers are becoming more selective but demand remains steady.

Sydney continues to lead activity levels, although affordability pressures are slowing competition in some suburbs.

Property Market Outlook

Despite higher borrowing costs, property prices across Australia continue to show resilience.

Market forecasts suggest:

• 2026 national price growth: ~4–5%

• 2027 expected growth: ~3–4%

Supply shortages, strong population growth, and tight rental markets continue to support housing demand.

However, analysts expect a “two-speed market” to emerge where more affordable cities and growth corridors outperform premium markets.

Interest Rate Prediction
Attention now turns to the next decision from the Reserve Bank of Australia.

The current cash rate sits at 3.85%, following the February increase.

Economists are currently split:

Scenario 1 – Rate Increase (0.25%)

• Cash rate rises to 4.10%

• Mortgage repayments increase slightly

• Borrowing capacity tightens

Scenario 2 – Pause

• The RBA waits for additional inflation data

• Markets remain stable for now

Major banks are leaning toward a further rate increase, although uncertainty remains high.

Globa Factors Influencing Australia

Geopolitical tensions in the Middle East are also being closely watched by global markets.

If conflict escalates and disrupts major shipping routes such as the Strait of Hormuz or the Red Sea, it could lead to:

• Higher oil prices

• Increased transport costs

• Higher inflation globally

For Australian households, this could translate into higher petrol prices, rising grocery costs, and ongoing cost-of-living pressure.

Why It Matters

Several forces are shaping Australia’s property market at the moment:

• Inflation remains above the target range

•  Interest rate uncertainty continues

•  Global geopolitical risks are increasing

•  Housing supply remains constrained

While the property market remains resilient, these factors are creating a more cautious lending and buying environment.

Who It Affects

• First Home Buyers

Rising borrowing costs continue to impact affordability, although slightly softer auction competition may create more negotiation opportunities.

• Property Investors

Rental demand remains extremely strong due to population growth and limited housing supply.

• Homeowners

Borrowers should remain prepared for the possibility of rates staying higher for longer.

• Businesses

Higher energy and transport costs could increase operating expenses across many sectors.

Broker Insight

The market is transitioning into a more strategic lending environment.

Borrowers are increasingly focusing on:

• fixed vs variable strategies

• refinancing opportunities

• structuring loans to preserve borrowing capacity

Despite higher rates, Australia still faces a structural housing shortage, which continues to support property values over the medium term.

What You Should Do Next

• If you are buying property
  Secure loan pre-approval early as borrowing capacity may change if rates rise.

• If you have a mortgage
  Review your interest rate and refinancing options as lenders remain competitive for new lending.

• If you are investing
  Focus on areas with strong population growth and rental demand.

• If you are planning to borrow in 2026
  Consider stress-testing repayments against rates above 4%.

Week 12 — 16 – 22 March 2026 

Rates Up, Auctions Down. Is the Property Market Turning?      

What Happened This Week

Rate Hike Shakes Borrowers as Auction Clearance Falls and Property Outlook Softens 

• The RBA lifted the cash rate to 4.10%, citing persistent inflation and rising fuel costs.

• Inflation remains above target (~3.8%), keeping pressure on further tightening.

• Borrower sentiment weakened and buyer activity slowed following the rate move.

• Mortgage brokers reported refinancing demand increasing as borrowers react to higher repayments.

• Forecasts now suggest price declines in Sydney (-2% to -6%) and Melbourne (-1% to -4%) if rates remain elevated.

Auction Clearance Rate on Saturday, 21 March 

• National clearance rate: ~61%–62.7% (near seasonal lows)

• Sydney: 64.6% (down week-on-week)

• Melbourne: 61.8% (lowest levels this year)

• Houses: 61.3%, Units: 73.9%

This shows buyers becoming more selective after the rate hike.

Property Market Prediction

• Buyer activity declining due to affordability pressure.

• Eastern capitals expected to soften further.

• Premium Melbourne homes already seeing discounting and weaker demand.

• Supply increasing as sellers list ahead of potential downturn.

Short-term outlook:

• •  Prices flattening

  •  Auction volatility

  •  Negotiation power shifting to buyers

Rate Prediction

• Markets now pricing possibility of another rate hike in coming months.

• Major banks previously forecast March + May tightening cycle.

• RBA signalling policy may tighten further if inflation stays high.

Base case:

• Next move: HOLD or HIKE

• Cuts unlikely in near term

Inflation Update

• Headline inflation: ~3.8% (above RBA target)

• Fuel prices and global conflict adding new inflation pressure.

• SMEs report inflation as top barrier to growth.

Why It Matters

• Borrowing capacity falling

• Mortgage repayments increasing

• Buyer confidence weakening

• Refinancing activity rising

• Property growth slowing

This is shifting the market from seller-driven to balanced / softening.

Who It Affects

• First Home Buyers

  • Reduced borrowing capacity

  • More negotiating power

• Upgraders

• Harder servicing

• Price uncertainty

Investors

• Yield becoming more important

• Cash flow focus increasing

Existing Borrowers

• Repayment pressure rising

• Refinance opportunities

Broker Insight

• Refinancing enquiries increasing sharply after rate hike

• Clients shifting from upgrade to “hold and restructure” strategy

• Fixed vs variable conversations returning

• Debt consolidation demand rising

• Investors focusing on positive cash flow deals

What You Should Do Next

• Buyers: 

  • • Secure pre-approval early as lending policies may tighten 

    • Focus on suburbs with strong population growth

    • Negotiate harder, gaining leverage 

• Investors:

  • • Watch rental markets where yields remain strong

    • Review borrowing capacity before rates potentially rise again

• Homeowners:

  • • Review loan structures and refinancing options

    • Consider fixing part of your loan if rate risk increases

Week 13 — 23 – 29 March 2026 

Rate Hike Pressure Hits Property Market: Clearance Rates Fall, Buyers Pull Back, and Further Rate Rises Back on the Table       

What Happened This Week

• Major banks began passing on the recent RBA rate hike, lifting variable mortgage rates above 6% and increasing repayment pressure for borrowers.

• Buyer confidence weakened as borrowing capacity fell and listings increased, shifting conditions slightly toward buyers.

• Economists warned inflation risks remain elevated due to higher fuel costs and global uncertainty, keeping the door open for further tightening.

• Sellers rushed to market ahead of April holiday disruptions, increasing supply and softening competition.

• National clearance rates continued trending lower through March following back-to-back rate hikes.

Auction Clearance Rate on Saturday, 28 March 

• Sydney clearance rate: ~64.1% (down slightly week-on-week)

• Houses: 61.6% | Units: 70.4%

• Auction volumes lifted to 1,895 listings pre-Easter

• Some regions dropped sharply (e.g. Northern Beaches ~40%) showing buyer caution

Nationally:

• Clearance rates fell to around 57%, the lowest level in 2026 so far

• Sydney slipped to roughly mid-50% range, signalling softer demand

Property Market Prediction

• Price growth is flattening in Sydney and Melbourne as demand cools and listings rise.

• Lower clearance rates around 60% historically signal slower price growth or short-term declines.

• Supply-constrained markets (Perth, Brisbane, Adelaide) remain more resilient, creating a two-speed property market.

Short-term outlook:

• Sydney: softening / flat

• Melbourne: slight downside risk

• Brisbane/Perth/Adelaide: still growth-supported.

Rate Prediction

• Markets are pricing further rate hikes into 2026, potentially pushing the cash rate toward ~4.85%.

• RBA officials warned inflation risks remain elevated due to global oil price shocks.

• This keeps the tightening bias intact for coming meetings.

Expectation:

• Next move: hold or hike bias

• Cuts unlikely near-term

• Borrowing capacity remains constrained

Inflation Update

• Inflation risks re-accelerating due to fuel costs and global supply pressures.

• RBA noted risk of inflation expectations rising if price shocks persist.

• This is the key reason rate cuts are being pushed further out.

Why It Matters

• Borrowing power continues to fall

• Buyer demand softening

• More properties coming to market

• Price growth slowing

• Refinancing activity increasing

This creates more negotiation power for buyers but pressure for sellers and borrowers.

Who It Affects

Buyers

• Less competition

• More negotiating leverage

• But reduced borrowing capacity

Existing Borrowers

• Higher repayments from bank pass-throughs

• Refinancing demand rising

Investors

• Rental demand still strong

• But cash flow tighter

Sellers

• Must price realistically

• Auction success becoming harder

Broker Insight

This week confirms the market is rate-sensitive again.
Clearance rates falling below mid-60% historically lead to:

• Longer days on market

• More conditional offers

• Increased price negotiation

• Higher refinance activity

However, strong population growth and housing shortage continue to limit major price declines.

What You Should Do Next

• Buyers: 

  • • Take advantage of softer competition

    • Negotiate harder

    • Secure pre-approval before next rate move

• Homeowners / Refinancers:

  • • Review your rate now

    • Consider fixing part of the loan

    • Extend buffers before further hikes

• Sellers: 

  • • Price to market conditions

    • Consider private treaty vs auction

    • Prepare for a longer campaign

• Investors:

  • • Focus on supply-constrained suburbs

    • Prioritise yield + growth balance

Week 14 — 06 – 12 April 2026 

Property Market at a Crossroads as Inflation, Global Conflict, Tax and Negative gearing reform and Supply Constraints Collide       

What Happened This Week

This week marked a clear turning point in the Australian property narrative, shifting from a rate-driven slowdown to a multi-factor uncertainty cycle.

Key developments:

• Oil prices surged toward ~$100/barrel amid escalating Middle East tensions, driving fuel costs higher

• Inflation risks re-emerged, with energy costs feeding into the broader economy

• Auction clearance rates dropped to ~55%, down from ~70% earlier in 2026

• Increasing discussion around:

  • Negative gearing reforms

  • Tax policy changes

  • AI-driven job disruption

• Economists and lenders flagged rising recession and stagflation risks

The market is no longer reacting to one variable. It is responding to compounding economic pressures 

Auction Clearance Rate on Saturday, 11 April 

• National clearance rate: ~55%

• Sydney & Melbourne: low–mid 50% range

• Trend: Consistent decline since February peak (~70%)

Interpretation:

• Buyer demand is weakening

• Sellers are adjusting expectations

• Market liquidity is slowing

Property Market Prediction (Supply vs Demand: The Critical Tension)

• Ongoing housing shortage due to low construction pipeline, builder constraints, strong population growth acting as a price stabiliser

• Demand is being hit simultaneously by rising cost of living (fuel, inflation), reduced borrowing capacity, policy uncertainty (negative gearing), job security concerns (AI + economic slowdown) force shifting the market

Macro Risk Factors Driving the Shift 

1. Inflation Risk Re-Acceleration

• Energy shock feeding into:

  • Transport

  • Construction

  • Consumer prices

     Risk: Inflation remains elevated or rises again

Global Conflict (Middle East)

• Oil supply disruption

• Increased volatility in global markets

     Risk: External shock impacting domestic economy

3. Policy Uncertainty (Tax & Negative Gearing)

• Investors delaying decisions

• Reduced forward demand

     Risk: Loss of a key buyer segment

4. Job Security & AI Disruption

• Hiring slowdown risk

• Structural workforce changes

     Risk: Lower borrowing confidence

5. Recession Probability Rising

• Slowing consumption

• Rising business costs

• Global growth concerns

     Risk: Demand contraction + forced selling

Property Market Outlook

Short-Term:

• National prices: Flat to -5%

• Sydney & Melbourne: Leading declines

• Other states: Lagging but vulnerable

Why It Matters: 

This is a confidence-driven turning point

• Buyers are stepping back

• Investors are hesitating

• Sellers are adjusting

When confidence falls:

1. Transaction volumes drop

2. Time on market increases

3. Prices follow with a lag

Who It Affects

Buyers

• More negotiating power

• But reduced borrowing capacity

Homeowners

• Increased mortgage stress sensitivity

• Exposure to value fluctuations

Investors

• Facing:

  • Policy uncertainty

  • Rising holding costs

Workforce / Borrowers

• Growing concern around:

  • Job stability

  • Income certainty

Broker Insight

Supply shortages are currently holding the market together ,
but demand is weakening faster than supply can support.

This is the key dynamic shaping today’s market:

• Supply remains tight, but increasingly fragile, constrained by:

  • Elevated construction costs (materials, labour)

  • Ongoing supply chain delays

  • Reduced new housing completions

• Demand is declining and highly sentiment-driven, impacted by:

  • Cost of living pressures

  • Economic uncertainty

  • Borrowing constraints

If economic conditions worsen:

• Supply can increase rapidly (through investor exits or forced sales)

• Demand can fall sharply as confidence deteriorates

Higher construction costs are also limiting new supply, but instead of driving prices up, they are:

• Delaying projects

• Reducing developer activity

• Creating a lagged supply response

Bottom line:

Supply constraints may slow the downturn —
but they cannot offset falling demand in a weakening economic environment.

Week 15 — 13 – 19 April 2026 

From Growth to Friction: How Tightening Credit and Fewer Buyers Are Reshaping the Market        

What Happened This Week

This week marked a clear shift in the Australian property market narrative, moving beyond a rate-driven slowdown into a broader uncertainty cycle driven by multiple pressures.

The Real Shift: Buyer Participation Is Falling

It’s no longer just about clearance rates.

• Fewer active bidders per auction

• Increase in “silent auctions” (1 or no serious bidders)

• More properties selling post-auction or via negotiation

This signals a liquidity problem, not just pricing pressure

Vendors Are Losing Control

We’re seeing a clear shift in market power:

• Increase in:

  • Withdrawn listings

  • Passed-in properties

  • Price guide revisions

Market transition:
Seller-driven → Negotiation-driven

Credit Is the Hidden Constraint

The biggest shift isn’t just interest rates, it’s access to credit.

• Borrowing capacity ceilings tightening

• Higher living expense buffers

• More conservative bank assessment

Two buyers may want the same property,
but only one can secure finance approval

Auction Market Insight (Week Ending Mid-April)

Looking beyond headline clearance rates:

The key signal is declining depth of demand

Even when properties sell:

• It’s often after auction

• Through negotiation

• With price adjustments

What this tells us:

• Buyer demand is weakening

• Sellers are adjusting expectations

• Market liquidity is slowing

Property Market Prediction 

Short-Term (Next 3–6 Months)

• Transaction volumes slowing

• Listings gradually increasing
  (driven by policy uncertainty, investor hesitation, and cost pressures)

• Affordability worsening
  (rates + inflation reducing borrowing power)

Demand is weakening while supply is building

What This Means

This is no longer just a “slow market” , it is shifting toward imbalance.

Buyers:

• More cautious

• Reduced borrowing capacity

Sellers:

• Increasing in number

• Facing longer selling timeframes

More stock than active demand

Price Outlook

• Prices facing gradual downward pressure

• Not a sharp correction, but:

  • Incremental declines

  • Increased discounting

  • “Hidden price falls” (negotiation, incentives, post-auction deals)

Why This Isn’t a Crash

• Strong population growth supports baseline demand

• Structural housing undersupply remains long-term

• Lending standards remain relatively tight

Outcome:
A controlled, gradual decline driven by affordability and liquidity constraints

Rate & Inflation Outlook

The key shift this week is psychological:

• Buyers are no longer waiting for rate cuts

• Expectations are adjusting to a “higher for longer” environment

This mindset shift is more impactful than the rate move itself

Why It Matters 

When liquidity declines:

• Prices become less reliable indicators

• Time on market increases

• Discounts become less visible

The risk is not a sudden crash
The risk is a slow, illiquid market with limited mobility

Who It Affects

Buyers

• Less competition

• Greater negotiation power

• Risk: overestimating borrowing capacity

Sellers

• Must adjust expectations

• Need stronger pricing and strategy alignment

Investors

• Market no longer rewards passive growth strategies

• Asset selection and cash flow now critical

Borrowers / Workforce

• Increased sensitivity to:

  • Job stability

  • Income certainty

Broker Insight

Broker Insight

“We’re not in a falling market, we’re in a thinning market.”

• Transactions are still occurring

• But:

  • Fewer participants

  • More friction

  • Greater scrutiny

Finance has become the gatekeeper of market activity

Week 16 — 20 – 26 April 2026 

From Boom to Balance: Buyers Pull Back as Rates and Costs Rise        

What Happened This Week

Auction clearance rates dropped sharply, signalling weaker buyer confidence. Inflation remained elevated, driven by fuel and energy, raising expectations of further rate hikes. Lenders began lifting fixed rates, while early signs of price softening emerged across key markets like Sydney and Melbourne.  

Auction Market Shock

• National sentiment weakened sharply as auction clearance rates dropped to multi-year lows.

• Sydney ~37.9%, Melbourne ~43.7%, Brisbane ~22.8%

• Significant number of auctions withdrawn or rescheduled, signalling vendor hesitation.

This aligns with REA/PropTrack data showing a clear shift from momentum to slowdown.

Property Market Direction

• Early signs of price softening in Sydney & Melbourne, particularly inner/middle-ring markets.

• Some forecasts now point to price declines up to ~6% in Sydney this year.

• However, tight supply + population growth continue to support underlying demand.

Inflation Back in Focus

• March quarter CPI expected around ~5.1% YoY, well above RBA target.

• Fuel prices surged ~30%, flowing through to:

  • Transport

  • Construction

  • Household goods

Interest Rate Pressure Rising Again

• Economists now forecasting multiple rate hikes (May + June likely).

• Fixed rates already moving:

  • Lenders (e.g. Westpac) raising rates again this week

• Markets expect a terminal rate ~4.5 - 4.6%.

Property Market Prediction

• Short-term: Further softness likely (next 3 - 6 months)

• Medium-term: Two-speed market emerging

  • Weak: Sydney, Melbourne (affordability pressure)

  • Stronger: Smaller capitals, limited supply areas

• Key driver shift:

  • From interest rate cycle → cost of living + sentiment

Rate Prediction

• High probability of:

  • May hike

  • June hike

• Possible pause later if:

  • Household stress deepens

  • Consumer demand weakens

But right now → RBA bias = tightening

Why It Matters

This is no longer just a rate story.

We now have three forces hitting simultaneously:

1. Higher interest rates

2. Rising inflation (fuel-led, broad impact)

3. Falling buyer confidence

This combination:

• Reduces borrowing capacity

• Delays buyer decisions

• Forces vendors to adjust expectations

Who It Affects 

Homeowners

• Facing “hidden rate rises” via living costs even before official hikes

• Increased pressure on cash flow

Buyers

• Borrowing power shrinking

• More negotiation leverage emerging

Investors

• Higher holding costs

• Policy + tax uncertainty still in background

Broker Insight

Key shift:

We’ve moved from a FOMO-driven market → a fear-driven, selective market

What stands out:

• Buyers are still active, but far more cautious

• Sellers are anchoring to old prices, but market is resetting

• Lending strategy is becoming more important than ever

Also critical:

• Inflation driven by fuel + energy will:

  • Push construction costs higher

  • Delay new supply

  • Create longer-term upward pressure on property

Bottom line:

• Clearance rates collapsing = confidence drop

• Inflation rising again = rates not done

• Property market = cooling, not collapsing

Week 17 — 27 April  –  03 May 2026 

Inflation Persists, Rate Hike Looms & Tax Reform Set to Reshape the Property Market          

What Happened This Week

Australia’s market is entering a critical turning point, with three major forces converging at once: 

• Inflation surged again, now sitting around 4.6%, driven heavily by fuel and energy costs amid global supply disruptions.

• Markets are now pricing in a high probability of another interest rate hike, with the cash rate expected to rise toward ~4.35%

• Proposed housing policy changes led by Jim Chalmers are introducing tax reform uncertainty, particularly around:

  • Capital Gains Tax (CGT) changes

  • Negative gearing restrictions

  • Trust taxation

At the same time:

• Consumer confidence has weakened

• Mortgage stress is rising

• Borrowing capacity continues to tighten

Auction Clearance Rates (Week Ending 3 May) 

Looking beyond headline clearance rates:

• Sydney: ~47%

• Melbourne: ~56%

• Brisbane: ~48%

National trend: Below 55%, signalling a buyer’s market and declining competition.

Property Tax Reform

The Federal Government is expected to introduce reforms aimed at improving housing affordability and “intergenerational fairness.”

• CGT Overhaul

  • Removal of the 50% discount

  • Potential shift to inflation-based taxation (taxing only real gains)

  • Alternative: reducing the discount to 33%

• Negative Gearing Changes

  • Limiting to two properties per investor, or

  • Restricting to new builds only

• Trust Tax Reform

  • Minimum tax rate of 25% - 30% on distributions

Key Detail: Grandfathering

Existing investments are likely to be partially protected, creating a divide between:

• Current property owners

• Future investors

Property Market Update & Prediction

• The market is clearly losing momentum, with:

  • Increased listings in some areas

  • Buyers becoming more cautious

  • Investors reassessing portfolios

• Short-term outlook (2026):

  • Modest price softening (~1% to 5%)

  • Higher stock levels in select markets

  • Longer selling times

• Medium-term outlook (2027+):

Two-speed market emerging:

• Established properties: softer demand

• New builds: stronger demand if tax incentives apply

Rate Prediction

• May 2026: Highly likely rate hike (third consecutive increase)

• 2026 Outlook:

  • 1–2 more hikes possible

  • Terminal rate forecast: ~4.35% to 4.85%

• Mortgage rates could move toward 6.5% - 7% range, putting further pressure on households.

Inflation Insight

While inflation is being driven by fuel and energy, the impact is far broader:

• Higher transport costs

• Increased construction and material costs

• Rising household expenses

This creates a compounding effect:

• Cost of living increases

• Interest rates stay higher for longer

Why It Matters

We are now seeing a structural shift in the market, not just a cyclical slowdown.

• Policy uncertainty is influencing investor behaviour

• Borrowing capacity is shrinking

• Supply dynamics are becoming unpredictable

The market is transitioning from:
Growth → Stability → Selective Correction

Who It Affects

Sellers

• Facing longer selling periods

• Greater competition

• Need for realistic pricing strategies

Buyers

• Gaining more negotiating power

• Benefiting from increased listings

• But constrained by reduced borrowing capacity

Opportunity exists, but only for well-positioned buyers

Investors

• Most impacted by tax reform changes

• Reduced after-tax returns (estimated 15%–30% lower)

• Some may sell ahead of changes, increasing supply

• Others may hold to retain grandfathered benefits

Broker Insight

This is no longer just an interest rate story.

We are now seeing a three-layer market shift:

1. Interest rate pressure

2. Inflation-driven cost increases

3. Policy and tax reform uncertainty

Key Behavioural Shift

• Investors are splitting into two groups:

  • Selling ahead of reform

  • Holding to preserve tax advantages

• Buyers are becoming:

  • More cautious

  • More selective

  • More negotiation-driven

This creates short-term opportunities, but also long-term structural changes

What You Should Do Next

• Review your loan structure now before further rate rises

• Reassess investment strategies in light of tax changes

• Strengthen cash flow and buffers

• Avoid overleveraging in a tightening environment 

Week 18 — 04 – 10 May 2026 

Property Buyers Pause Ahead of Budget & Tax Reform Uncertainty         

What Happened This Week

Australia’s property market entered a more cautious phase this week as investors and buyers slowed decision-making ahead of the Federal Budget announcement on Tuesday 12 May.

While inflation and interest rates remain major concerns, growing uncertainty around possible housing and tax policy reforms is now becoming an additional force impacting market confidence.

Across Sydney and Melbourne especially, many buyers appeared to shift into “wait-and-see” mode.

 Investor Caution Increased Ahead of Federal Budget

Speculation surrounding possible housing and taxation reforms became a major talking point across the finance and property industry this week.

Discussions around:

• negative gearing,

• capital gains tax,

• build-to-rent incentives,

• housing affordability measures,

• and investor-related tax changes

created uncertainty for many investors considering purchases or refinancing decisions.

While no official policy changes had been announced during the week, uncertainty alone appeared to soften market momentum.

Auction Markets Continued to Cool

Auction clearance rates weakened further during the week ending 3 May:

• Sydney: ~55%

• Melbourne: ~56%

• National combined capitals: mid-50% range

Buyer activity remained cautious, particularly in investor-heavy and higher-priced markets.

Agents reported:

• more negotiations post-auction,

• increased vendor discounting,

• and buyers taking longer to commit.

The market is not collapsing, but confidence has clearly become more fragile.

Inflation Pressures Continue Flowing Through the Economy

Inflation remained one of the biggest concerns this week, particularly:

• fuel costs,

• insurance premiums,

• utilities,

• imported construction materials,

• and household living expenses.

These costs are now impacting:

• borrowing confidence,

• household cash flow,

• building feasibility,

• and overall consumer sentiment.

Higher fuel and energy prices are especially important because they flow through almost every part of the economy, including transport, food, construction, and logistics costs.

Property Market Prediction

The market is increasingly dividing into two segments:

Markets Facing More Pressure

• Sydney and Melbourne investor stock

• Higher-priced homes

• Apartment markets with heavy investor exposure

• Borrowing-capacity-sensitive buyers

Markets Remaining More Resilient

• Affordable family-home markets

• Brisbane, Adelaide and Perth

• Areas with tight housing supply and strong population growth

Australia’s housing shortage continues supporting long-term demand, but short-term momentum is slowing as buyers reassess affordability and policy risks.

Rate Prediction

The focus is now shifting from “how high rates go” to “how long rates stay elevated.”

Financial markets still expect rates to remain restrictive for longer if inflation remains stubborn.

Another major concern is that ongoing inflation could continue reducing household borrowing power even without significant additional rate increases.

Lenders are also becoming more conservative around servicing assessments and borrower expenses.

Why It Matters

This week showed that market sentiment is now being influenced by multiple pressures at the same time:

• persistent inflation,

• high interest rates,

• cost-of-living pressure,

• global uncertainty,

• and now potential policy reform risks.

For investors especially, uncertainty around taxation and housing policy can quickly slow purchasing activity, even before any official changes occur.

Who It Affects

Homeowners

Many borrowers are now feeling the delayed impact of previous rate rises as lender repricing continues flowing through repayments.

First Home Buyers

Affordability remains difficult due to reduced borrowing capacity and rising living costs.

Investors

Many investors are pausing decisions while waiting to see the outcome of the Federal Budget and any future housing policy direction.

Builders & Developers

Construction costs and finance expenses remain elevated, continuing pressure on housing supply and project viability.

Broker Insight

This week highlighted an important shift in market psychology.

Buyer hesitation is no longer being driven purely by interest rates.

Policy uncertainty is now becoming a major factor influencing investor confidence, particularly in markets already facing affordability pressure.

At the same time, lenders remain highly competitive for quality borrowers, creating refinancing and restructuring opportunities for proactive homeowners and investors.

What You Should Do Next

If You’re a Homeowner

• Review your current interest rate and repayment position

• Consider refinancing before lending conditions tighten further

• Build repayment buffers where possible

If You’re Buying

• Focus on borrowing capacity and cash flow first

• Avoid overextending budgets

• Watch for opportunities as competition softens

If You’re Investing

• Monitor Federal Budget announcements carefully

• Review holding costs and servicing position

• Prioritise long-term cash flow sustainability

If You’re Planning to Refinance

Acting earlier may provide more flexibility before lenders potentially tighten servicing assessments further.

Week 19 — 11 – 17 May 2026 

Budget Shockwaves, Rate Rise Pressure & A Softer Property Market          

What Happened This Week

Federal Budget Delivered Major Property & Tax Reform Signals

Treasurer Jim Chalmers’ Federal Budget introduced major changes impacting investors, borrowing confidence, and housing sentiment. Proposed reforms include:

• Limiting negative gearing benefits to new properties only

• Changes to Capital Gains Tax treatment from July 2027

• Additional scrutiny around trusts and investor tax structures

• Continued affordability and housing supply focus

The government framed the reforms as improving housing affordability and intergenerational fairness, but markets reacted cautiously.

Australia’s property and finance market experienced one of the noisiest weeks of 2026 so far.

Between the Federal Budget tax reforms, growing expectations of another RBA rate hike, softer auction results, and rising borrower anxiety, many Australians are asking the same question:

“Is it time to sell?”

The answer is not simple because this market is no longer one-size-fits-all.

Property Market Momentum Slowed Sharply

Auction activity weakened noticeably across major cities, particularly Sydney.

Preliminary auction clearance rates:

• Combined capitals: around 54–56%

• Sydney: dropped below 50%

• Melbourne: remained relatively more stable

This is among the weakest auction performance seen since the pandemic-era market slowdown.

Buyers are becoming cautious, investors are hesitating, and sellers are adjusting expectations.

Inflation & Rate Rise Pressure Still Building

The RBA’s May rate increase to 4.35% continues flowing through to households and businesses.

Inflation remains above the RBA’s target band, with underlying inflation still elevated and oil prices adding additional pressure globally. Markets are now increasingly pricing in the possibility of another rate rise later this year.

Many lenders have already passed on the latest increase to borrowers.

Property Market Prediction

The market is no longer moving as one national story.

What we are likely to see next:

• Slower investor activity in Sydney and Melbourne

• Higher stock levels and longer selling times

• More negotiation power returning to buyers

• Better opportunities for upgraders

• Continued resilience in quality, tightly held locations

• Stronger demand for affordable and cashflow-friendly properties

We may see softer price growth or moderate corrections in some investor-heavy markets, but distressed selling is still not widespread.

Australia still has:

• population growth,

• supply shortages,

• rental pressure,

• and strong long-term housing demand.

That means this market is cooling, not collapsing.

Rate Prediction

The big question now is whether the RBA hikes again.

Current market expectations suggest:

• another 0.25% rise remains possible,

• particularly if inflation stays elevated through winter,

• or if global oil and supply pressures worsen.

However, the RBA is also aware households are under increasing financial stress. Future decisions will likely depend heavily on:

• inflation data,

• unemployment figures,

• consumer spending,

• and global economic stability.

Why It Matters

This market confusion is affecting behavior.

Many Australians are:

• delaying purchases,

• holding off refinancing,

• reconsidering investment plans,

• or emotionally reacting to headlines.

But headlines are not strategy.

Different borrowers are facing very different realities right now.

Who It Affects

• Investors - If your investment is still manageable from a cashflow perspective, selling purely out of fear may not be the best long-term decision.

Many investors built wealth through holding quality assets during uncertain periods, not by reacting emotionally to short-term market noise.

Yes, tax reform and higher rates may reduce investor confidence temporarily. But leverage, long-term growth, and rental demand still matter.

• Owner Occupiers - If repayments are stretching your finances, impacting your lifestyle, mental pressure, or household stability, this uncertainty becomes more serious.

While premium areas have remained relatively resilient, future rate rises are still possible and should not be ignored.

This is where proper restructuring, refinancing, debt strategy, or budgeting discussions become critical.

• Upgraders - Ironically, this may become one of the better upgrader markets we have seen in years.

Why?

Because if your property value softens slightly, the property you want to buy may soften even more.

That creates:

• stronger negotiation power,

• better buying conditions,

• reduced competition,

• and more flexibility with sellers.

For many upgraders, this market may create opportunity rather than risk.

Broker Insight

There is currently too much noise and too many extreme opinions in the market.

Some people are saying:

• “Sell immediately.”
  Others are saying:

• “Property always goes up.”

Neither approach is financial strategy.

The right move depends on:

• your cashflow,

• your long-term plans,

• your debt position,

• your risk tolerance,

• and your lifestyle goals.

Markets move in cycles.
Good strategy comes from preparation, not panic.

What You Should Do Next

Consider reviewing:

• your current interest rate,

• borrowing capacity,

• repayment buffers,

• fixed vs variable strategy,

• cashflow position,

• and long-term property goals.

In this market:

• Investors should focus on sustainability and structure.

• Owner occupiers should focus on financial comfort and resilience.

• Upgraders should focus on opportunity and negotiation leverage.

The biggest mistake right now is making emotional decisions based purely on headlines

Week 20 — 18 – 24 May 2026 

Budget Shock, Rate Pressure & Buyer Confusion: What Happens Next?         

The property and finance markets have just wrapped up another big week and right now, the noise is louder than ever. Headlines are emotional, opinions are split, and everyone seems convinced they’re right.

On one side, you’ll hear:

• “Sell before the market drops.”

• “Property prices are crashing.”

• “Investors are pulling out.”

• “Rates will keep rising.”

On the other side, the message is completely different:

• “This is the buying opportunity.”

• “The market will bounce back.”

• “Hold for the long term.”

So what’s the truth?  

There isn’t a universal answer anymore.

In today’s environment, your next move depends entirely on you, your financial position, cash flow, lifestyle pressures, debt levels, and long‑term goals. The right strategy for one person could be the wrong move for someone else.

What Happened This Week

Auction Clearance Rates Stayed Weak - Australia’s auction market remained soft through the week ending 24 May, with preliminary combined capital city clearance rates sitting around the high-50% range, while some final figures continued falling closer to 50%. Sydney recorded some of its weakest auction conditions since the COVID period.

Open home attendance also dropped sharply compared to last year, showing buyers are becoming more cautious, especially investors. 

Federal Budget & Property Tax Reform Shook Confidence 

The Federal Budget continued dominating finance and property discussions this week.

The biggest concerns remain:

• proposed changes to negative gearing

• capital gains tax reform

• investor uncertainty

• future rental supply concerns

Even though the reforms are not immediate, the market reaction has already started. Many investors have paused decisions while they reassess long-term strategies.

Interest Rates Remain the Biggest Pressure Point 

Earlier this month, the RBA increased the cash rate again to 4.35% after inflation pressures remained stubbornly high. 

However, this week’s unemployment figures unexpectedly weakened, reducing expectations of another immediate rate rise. Markets are now less certain about a June hike, although inflation risks remain elevated. 

Inflation Still Matters 

Inflation remains above the RBA’s target range, particularly due to:

• fuel price pressures

• global instability

• energy costs

• services inflation

While some economic data softened this week, inflation is still high enough for the RBA to keep warning that future rate rises remain possible if inflation doesn’t ease fast enough.

Auction Clearance Rate - Week Ending 24 May 

Market conditions remained softer than earlier this year:

• Sydney continued showing weaker auction conditions

• Melbourne held slightly firmer

• Brisbane remained volatile

• Buyer confidence stayed cautious nationally

The key trend:
buyers are still active - but they are far more selective, slower to commit, and negotiating harder.

This is no longer the aggressive seller’s market we saw during previous years.

Property Market Prediction

Short-Term Outlook

The market is likely entering a transition phase rather than a full collapse.

Current pressures include:

• higher mortgage repayments

• lower borrowing capacity

• investor uncertainty

• affordability strain

• weaker sentiment

However:

• housing supply remains tight

• migration remains strong

• rental vacancy remains low

• many borrowers are still holding up financially

This means we may continue seeing:

• softer auction conditions

• slower price growth

• price declines in some pockets

• longer selling periods

• stronger buyer negotiation power

But not necessarily a broad market crash.

Rate Prediction

The market now sees:

• a lower probability of an immediate June rate rise

• but ongoing inflation risk still keeps future hikes possible later in 2026

The RBA remains highly data dependent.

If inflation stays sticky or oil prices continue rising globally, further tightening cannot be ruled out.

Why It Matters

This market is now creating very different outcomes for different people.

Some households are comfortable and financially strong.

Others are under serious repayment pressure.

That’s why broad social media advice like:

• “Everyone should sell”

• “Everyone should buy”

• “The market is crashing”

• “Property always doubles”

can become dangerous.

The right decision depends on your own financial position, not headlines.

Who It Affects

Owner Occupiers

If you are heavily stretched financially:

• rising repayments

• lifestyle pressure

• stress

• reduced savings buffers

should not be ignored.

This market confusion is not helpful for households already under pressure.

Even though Australian property remains relatively resilient compared to many global markets, borrowers still need to consider:

• future rate rise risk

• job security

• household cash flow

• long-term affordability

Holding property at any cost is not always the right answer if financial stress is becoming unsustainable.

Upgraders

This may actually be one of the most important markets for upgraders to watch closely.

Why?

Because if your property value has softened slightly, the property you want to buy may have softened even more.

That creates:

• stronger negotiation leverage

• better buying conditions

• less competition

• more conditional flexibility

Many upgraders focus only on what they may “lose” selling, but forget they may gain even more on the purchase side.

Investors

If you are an investor and:

• your repayments are manageable

• your property remains cash-flow sustainable

• your long-term strategy still works

then selling purely because of market fear may not make sense.

Many investors still hold strong long-term leverage positions, particularly in quality assets.

Yes, the market may soften further.
But selling a long-term performing asset simply because of temporary noise may not always be the right move.

At the same time, investors carrying heavy debt pressure, weak cash flow, or multiple exposed properties may need to reassess risk properly.

Broker Insight

The biggest issue right now is uncertainty.

Borrowers are not just worried about rates anymore.

They are worried about:

• inflation

• employment

• future tax policy

• investment confidence

• affordability

• and what happens next.

What You Should Do Next

If you are an investor

Review:

• cash flow

• buffers

• structure

• future holding ability

• tax strategy

Do not make emotional decisions based purely on headlines.

If you are an owner occupier

Focus on:

• repayment sustainability

• lifestyle impact

• financial breathing room

• refinance opportunities

• debt reduction strategies

If you are an upgrader

This may be one of the better negotiating environments we’ve seen in recent years.

The right purchase at the right price can create long-term value - especially while competition remains cautious.

Week 21 — 25 – 31 May 2026 

Inflation Eases, Auction Markets Soften and Tax Reform Continues to Shape Investor Decisions  

New inflation data showed signs of improvement, auction clearance rates weakened further, and investors continued assessing the potential impact of the Federal Government's proposed tax reforms.

While inflation is moving in the right direction, it remains above the Reserve Bank's target range. At the same time, softer auction results and growing uncertainty around future negative gearing and capital gains tax (CGT) rules are contributing to a more cautious property market.

The market is no longer moving as one. Conditions are becoming increasingly different depending on whether you're a first-home buyer, owner-occupier, upgrader or investor.

What Happened This Week

Inflation Data Sends Mixed Signals

At first glance, Australia's latest inflation figures appeared positive.

Annual headline inflation eased from 4.6% to 4.2%, suggesting cost-of-living pressures may be starting to moderate.

However, the detail behind the numbers tells a more complicated story.

Much of the decline was driven by lower petrol prices and temporary fuel-related relief. The inflation measure most closely monitored by the Reserve Bank of Australia, underlying inflation (trimmed mean inflation), actually increased from 3.3% to 3.4%.

This suggests that broader price pressures across the economy remain persistent and continue to spread through everyday household expenses.

Key inflation drivers included:

• Housing inflation remained elevated at 6.3%, driven by rental shortages, housing supply constraints and construction costs.

• Insurance and financial services costs continued to rise.

• Food and grocery prices remained higher than many households would like.

• Services inflation remained stubborn despite softer consumer spending in some sectors.

While housing inflation eased slightly from 6.5% to 6.3%, it remains more than double the RBA's preferred inflation range and continues to place pressure on household budgets.

The latest data highlights an important distinction: headline inflation is falling, but underlying inflation remains stubbornly high.

For borrowers, this means interest rate relief may still be further away than many had hoped.

Auction Markets Weakened Further

Auction clearance rates softened again during the week ending 31 May.

Across Sydney, Melbourne and several major capitals, more properties passed in and buyer competition eased compared to earlier in the year.

Higher interest rates, affordability constraints and increased stock levels are giving buyers more negotiating power and reducing urgency in some segments of the market.

Market activity softened further this week:

• National clearance rates remained around the low-to-mid 50% range.

•  Sydney auction results weakened compared to earlier months.
  Melbourne remained below long-term averages.

• Buyer competition eased across many markets.

• More properties required post-auction negotiations to secure a sale.

Historically, clearance rates below 60% indicate more balanced market conditions and slower price growth.

More Properties Available for Buyers

Listing volumes continue to improve across many parts of Australia.

After several years of limited stock and intense competition, buyers are beginning to see more choice, particularly in established suburbs and higher-priced markets.

This shift is creating a more balanced market where due diligence and negotiation are becoming increasingly important.

Tax Reform Remains a Major Market Discussion

One of the most significant topics this week continues to be the Federal Government's proposed changes to negative gearing and Capital Gains Tax.

While the legislation has not yet passed Parliament, the proposed reforms are already influencing investor sentiment and purchasing decisions.

Under the current proposal:

• Existing investment properties are expected to be grandfathered.

• Future purchases of established residential investment properties after 12 May 2026 may be subject to new negative gearing restrictions from 1 July 2027.

• Proposed changes to CGT concessions could alter future investment returns.

• Newly constructed properties are expected to retain access to existing incentives designed to encourage housing supply.

As a result, many investors are reassessing acquisition strategies, cash flow projections and property selection decisions before proceeding with new purchases.

Interest Rate Prediction

The latest inflation figures have reduced the likelihood of near-term interest rate cuts.

Although headline inflation eased to 4.2%, the increase in underlying inflation to 3.4% suggests that domestic price pressures remain persistent and above the RBA's target range.

Adding further complexity, the recent Fair Work Commission decision to increase minimum wages by 4.75% may contribute to additional wage and services inflation over coming months.

As a result, many economists now expect:

• The RBA to maintain a cautious approach.

• Interest rates to remain higher for longer.

• Any future rate cuts to depend on several months of sustained improvement in underlying inflation.

• Further rate increases cannot be completely ruled out if inflation proves more persistent than expected.

While the base case remains for rates to hold, the latest data reinforces that inflation remains the RBA's primary concern.

For homeowners, investors and borrowers, planning around current interest rate settings remains the most prudent strategy rather than relying on imminent rate cuts.

Why It Matters

Several major forces are now affecting the property market at the same time.

• Inflation is easing.

• Interest rates remain elevated.

• Auction markets are softening.

• Tax reform uncertainty is influencing investor confidence.

Together, these factors are creating a more balanced market that rewards preparation, research and strategic decision-making rather than speculation.

Who It Affects

Owner Occupiers

Buyers upgrading or relocating may benefit from improved negotiating conditions, although borrowing capacity remains under pressure from higher rates. 

Property Investors

Investors face a changing landscape.

Rental demand remains strong, but proposed tax reforms, borrowing costs and slower price growth are causing many investors to reassess future acquisitions and portfolio strategies.

Existing Mortgage Holders

Borrowers should review their current lending arrangements and ensure their loan remains competitive in today's market.

Upgraders

This may actually be one of the most important markets for upgraders to watch closely.

Why?

Because if your property value has softened slightly, the property you want to buy may have softened even more.

That creates:

• stronger negotiation leverage

• better buying conditions

• less competition

• more conditional flexibility

Many upgraders focus on what they may achieve when selling, but overlook what they may save when purchasing. In a softer market, the savings on the upgrade property can often outweigh the reduction in their own sale price. 

Broker Insight

• One of the biggest shifts occurring behind the scenes is how borrowers, investors and lenders are approaching risk.

• Many investment buyers are now placing greater emphasis on cash flow sustainability rather than relying solely on future capital growth or potential tax advantages.

• Lenders continue to focus on servicing strength, genuine repayment capacity and long-term affordability.

• For investors considering purchases after 12 May 2026, understanding both lending requirements and potential future tax implications has become increasingly important.

• In today's market, choosing the right lender and structuring finance correctly can have a greater impact than trying to perfectly time the market.

What You Should Do Next

If you are investing

• Check with your lender or broker before making any offers. Some lenders may reassess borrowing capacity for properties purchased or contracts signed after 12 May 2026, following the Federal Budget announcements. This is because lenders may update their credit policies to reflect the proposed changes to negative gearing and the broader tax reforms.

• If your pre‑approval was issued before Budget night, it may be worth reviewing your position before proceeding. Some lenders may require a fresh pre‑approval if their policies change, particularly around how they treat rental losses, future tax positions, or income shading under BID obligations.

• Review your borrowing capacity regularly.

• Take advantage of improving negotiation opportunities. 

If you are refinancing

• Compare your current rate against available market options.

• Review your loan structure and cash flow position.

• Consider whether refinancing could improve flexibility and reduce repayments. 

If you are an upgrader

This may be one of the better negotiating environments we’ve seen in recent years.

The right purchase at the right price can create long-term value - especially while competition remains cautious.