Welcome to our
April Newsletter
With rising interest rates, a diverging property market, and ongoing economic uncertainty, many homeowners and investors are inclined to reassess their options.
The housing market across the country has split into different speeds. Perth’s property prices continue to sprint skyward, and Brisbane, Adelaide and Hobart are also posting solid gains.
Meanwhile, Sydney and Melbourne have seen prices flatten, as higher interest rates and weaker buyer sentiment take hold.
So what does it all mean for you? Let’s break it down.
Interest Rate News
Inflation is starting to ease slightly, with the Consumer Price Index (CPI) rising 3.7% over the past year to February, down a touch from January.
At the same time, underlying inflation (as represented by the trimmed mean) remains steady at 3.3%.
Following the Reserve Bank of Australia’s (RBA) decision to increase the cash rate to 4.10% at its March meeting, many lenders passed on the 0.25% increase in full. It marked the second consecutive cash rate hike of the year.
There’s now widespread talk of more cash rate increases to come, as the global energy shock in the Middle East threatens to push Australia’s inflation towards 5%. Some economists are even anticipating three more interest rate hikes in May, June and August, bringing the cash rate to a level not seen since the global financial crisis (GFC).
If the RBA does increase the cash rate again in May, the 75 basis point increase since the start of the year would add roughly $239 a month to repayments on a $500,000 home loan, or $478 a month on a $1 million loan.
Treasurer Jim Chalmers has acknowledged the pressures faced by Australians grappling with higher fuel prices and cost of living pressures, and noted savings will be delivered in the May budget.
The next cash rate decision will be announced on 5 May.
Home Value Movements
Dwelling values across the nation rose 0.7% in March, and 2.1% over the first quarter of 2026. Overall, the pace of gains is easing, dropping from a 2.8% increase in the final quarter of 2025.
Perth’s property prices surged 7.3% over the first quarter of 2026, while Melbourne saw values drop -0.9% from their November high, and Sydney’s prices fell -0.4%.
The mid-sized capitals and Darwin are recording growth of 1.2% or more on a month-by-month basis, while Sydney and Melbourne experience declines.
“Since the end of November 2025, Melbourne values have retreated by -0.9% and the Sydney market is down -0.4%,” said Cotality research director Tim Lawless.
“The softer trend in values coincides with falling auction clearance rates and a pickup in advertised supply, providing buyers with more choice and less urgency at the negotiation table.”
In Perth, home values are accelerating in the face of higher interest rates and lower sentiment.
“In dollar terms, the 7.3% rise in Perth home values over the quarter has added approximately $69,000 to the median dwelling value,” Mr Lawless said.
“Clearly this pace of growth is unsustainable, but continues to be supported by low supply, with advertised stock levels tracking about 40% below the five-year average for this time of the year.”
Meanwhile, regional markets are proving resilient, with values rising 1.1% over the month and 3.3% over the quarter.
What does this mean for you?
There’s no one-size-fits-all answer in a market like this. If you’re buying, the right strategy may depend on where you’re looking and how future rate changes could affect your budget.
If you already have a home loan, it may be worth reviewing whether your current rate is still suitable, especially with the possibility of more increases ahead.
Meanwhile, if you’re considering investing, differences between markets may mean factors like location and timing play an important role.
Need help reviewing your options?
Whether you’re planning to buy, refinance, or simply want a home loan health check after the recent rate rises, we’re here to help.
We can compare lenders, review your current loan, and help you understand your options so you can make confident decisions in a changing market.
Get in touch today.
Additional sources
Cotality Data Daily Home Value Index: Monthly Values
https://www.cotality.com/au/our-data/auction-results
https://www.realestate.com.au/auction-results/
Offset or Redraw:
Things to consider as rates rise
With interest rates rising, many borrowers are taking the time to review their home loan arrangements. A review of your loan structure may assist in managing repayments, subject to your individual circumstances.
Offset accounts and redraw facilities are features offered on some home loans. When used appropriately, they may help reduce the interest payable and overall loan costs, depending on individual circumstances.
❖ Offset accounts
An offset account is a transaction or savings account that’s linked to your home loan. The money you have in this account ‘offsets’ your loan balance when your lender calculates interest.
So, if your loan balance is $500,000 and you have $50,000 in a 100% offset account, the bank will only charge you interest on $450,000.
You generally don’t earn interest on the balance held in the offset account. Instead, the money is actively reducing interest charges.
Key benefits:
-
Interest savings. The balance in the offset reduces the interest charged on your home loan.
-
Flexibility. Funds aren’t locked away. You can access the money immediately for daily transactions and ATM withdrawals.
-
Tax-effective savings on interest. Interest savings are generally not treated as taxable income. However, tax outcomes can vary depending on your individual circumstances, so it’s important to seek advice from a qualified tax professional. Offset accounts may provide an effective after-tax benefit similar to your loan interest rate, depending on your circumstances.
-
Help reduce the loan term over time. By reducing interest, a bigger chunk of your regular repayment goes towards the principal, reducing the overall mortgage term.
-
Good for investors. For investment properties, using an offset account instead of a redraw facility ensures that if the money is withdrawn, the tax deductibility of the loan interest is maintained.
Potential drawbacks:
-
Potentially higher fees. If the offset account comes with a loan package, there may be annual fees attached.
-
Potentially higher interest rates. In some instances, loans with offset accounts may come with higher interest rates.
-
Limited availability. Offsets are usually attached to variable-rate loans, not fixed-rate mortgages.
❖ Redraw facilities
With a redraw facility, you can make extra repayments in addition to your minimum fortnightly or monthly home loan repayment. The extra funds reduce the loan balance, which lessens the amount of interest you pay. You can redraw the funds in future as required.
So, if your loan balance is $500,000 and you repay an extra $50,000, the new loan balance is $450,000. The lender will charge interest on that amount.
Key benefits:
-
Interest savings. By making extra repayments, you reduce the principal loan balance and the interest payable.
-
Help reduce the loan term over time. Making extra repayments regularly may help you to pay off your mortgage sooner.
-
Repayment holidays. If you are ahead on repayments, some lenders may allow you to reduce or pause repayments, subject to their terms and conditions.
-
Less temptation to spend. Your funds may be harder to access than with an offset account, making it easier to save.
Possible drawbacks:
-
Restricted access. Lenders often set limits on withdrawals (though this could be a good thing and keep you accountable to your savings targets).
-
Contamination risk for investors. If the redraw is attached to an investment property, using the redraw for personal expenses may impact the deductibility of interest (it’s a good idea to chat to your accountant about your personal tax situation).
-
Limited availability. Redraw facilities usually come with variable-rate loans, not fixed-rate mortgages.
Please note that while these features may help reduce interest costs, they also come with limitations and may not be suitable for all borrowers.
Why a record number of Aussies are refinancing
In 2025, more than 640,000 homeowners refinanced their mortgage, representing a 20 per cent jump from the previous year.
With multiple interest rate hikes so far this year, many borrowers will be looking to refinance to a loan with a more competitive interest rate or one with interest-saving features.
Like to chat through your finance needs?
Whether refinancing is right for you depends on a range of factors, including your financial situation and goals. If it’s an investment property, you’ll also want to consider the tax implications for offset accounts versus redraw facilities.
To explore which loan structure is right for you, get in touch today.
Buying before you sell?
Bridging Loans explained
For many homeowners, timing can be one of the challenges when purchasing their next property. If you’re planning to sell your current home to fund your next purchase, a bridging loan may be worth considering.
Mortgage brokers have reported increased interest in bridging finance, as some buyers consider alternative ways to navigate higher living costs and rising interest rates.
Here’s how this type of finance works, along with some key considerations to keep in mind.
What is a bridging loan?
A bridging loan is a short-term loan that may allow you to buy a new property before selling your existing one. It’s designed to ‘bridge’ the gap between the two transactions.
In essence, a lender can use the equity in your current property to support the purchase of your next home.
In competitive markets, where housing supply is tight and properties can sell quickly, some buyers consider bridging finance as a way to act sooner.
Making an offer ‘subject to the sale of your existing property’ may be less appealing to some vendors, but bridging finance may offer a way around this. Instead, you could apply for bridging finance and structure your offer ‘subject to finance’, which in some cases may be viewed more favourably by vendors.
Bridging finance may also be worth exploring if you’re looking to reduce the likelihood of needing temporary accommodation between selling your current home and buying your next one.
A range of homeowners use bridging finance, including those looking to upsize, downsize or relocate.
How do bridging loans work?
Bridging loans are often structured over a period of around six to 12 months, although in some cases they may only be needed for a few weeks if the existing home sells quickly. It’s also worth noting that lenders could structure bridging loans in different ways.
When you apply to a lender for a bridging loan, they temporarily finance both properties – the one you intend to sell and the new property.
The ‘peak debt’ is the combined loan amount of both properties during this period. This may include the remaining balance on your existing home loan, the purchase price of your new property, and associated buying costs.
Repayments are generally interest-only, with interest sometimes added to the loan balance (known as capitalisation) until the sale is completed.
Once your existing home is sold, the proceeds are typically used to reduce the loan, leaving a standard mortgage secured against the new property.
Reasons you might use a bridging loan
Bridging finance comes with risks, but it may be worth considering if:
-
You find the right property for your needs before your existing home sells
-
You want to avoid temporary accommodation between sale and purchase
-
You need options in a fast-moving property market where demand outstrips supply
-
You have a decent amount of equity in your existing home.
Potential drawbacks to consider
Possible downsides to keep in mind:
-
Interest rates for bridging loans may be higher than for standard loans.
-
Having debt on two properties can create financial pressure.
-
You may need to weigh up the cost of a bridging loan, compared to the potential costs of selling before buying, such as seeking alternative accommodation.
-
If your existing property takes longer to sell, or sells for less than expected, you may be left with a shortfall. This could require you to contribute additional funds or increase your ongoing debt.
What lenders will assess
When assessing your bridging finance application, lenders will consider:
-
The equity and value of your existing home
-
Your ability to service the peak debt (with both properties)
-
The expected sale price of your current home
-
Relevant market conditions.
Ready to purchase your next home?
Bridging loans are generally more suitable for borrowers with sufficient equity and a clear exit strategy, such as a planned property sale. They can offer flexibility with timing when buying and selling, but it’s important to understand the costs, risks, and suitability for your circumstances.
To explore whether bridging finance could work for you, get in touch today.
Why investors are focusing on rental income in 2026
Property investors may be motivated by different goals. With changing market conditions and some areas seeing slower price growth, some investors may be placing greater focus on rental yield and cash flow rather than capital growth alone. This shift may influence both property selection and financing decisions.
If you’re considering investing in property, here’s what to know about rental yields and why they matter.
What is rental yield?
Rental yield is the annual rent generated by a property, divided by its market value and expressed as a percentage. It’s a commonly used measure to help investors assess a property’s income potential.
For example, if a unit rents for $500 per week, it generates $26,000 in annual rent. If the property is valued at $600,000, the gross rental yield would be 4.3%.
The two main types of rental yield are:
-
Gross rental yield is calculated before costs. It enables investors to quickly compare income potential across different properties in various locations.
-
Net rental yield is calculated after costs (such as body corporate, property management fees and insurance). This is usually the figure investors are most interested in, because it provides a clearer picture of the property’s income after expenses, although it doesn’t account for all costs such as loan repayments or tax.
What’s a ‘good’ rental yield?
A higher rental yield generally indicates stronger rental income relative to a property’s value. For context, average rental yields across Australia’s capital cities were around 3% for houses and 4.3% for apartments as of March 2026.
Some investors use yield ranges as a general guide, but what’s considered suitable can vary widely depending on individual goals, risk tolerance, and market conditions.
Examples of areas with high rental yields include:
-
Echuca, Victoria – houses 10.6%, units 13%
-
Newman, Western Australia – houses 10.3%, units 12.4%
-
Pegs Creek, Western Australia – houses 11.4%, units 10.2%
Factors affecting rental yield
Rental yield can vary depending on a range of factors, including property type, location, and broader rental and property market conditions.
➢ Property type
Apartments often have higher rental yields than houses, as they may be more affordable to purchase and can generate relatively strong rental income. However, they may also come with ongoing costs such as strata or body corporate fees.
Houses, on the other hand, may have lower rental yields, but are sometimes associated with stronger potential for long-term capital growth.
➢ Location
Properties in some regional areas may offer higher rental yields than those in metropolitan areas, often due to lower purchase prices and, in some cases, limited rental supply. However, these areas may also experience higher vacancy rates, and price growth can be more variable.
➢ The rental market
Changes in rental supply and demand, such as an oversupply or shortage of rental properties, can influence rental returns.
➢ The property market
Market conditions, including whether prices are rising or falling, may also affect rental yield outcomes.
Why rental yields are a key focus in 2026
Rental yield highlights the potential income a property may generate, making it an important consideration for many investors — particularly in the current market environment.
With interest rates and inflation influencing market conditions, some market commentators suggest property price growth could moderate in 2026, although forecasts can vary and are subject to change. As a result, some investors are placing greater focus on rental yield and cash flow, including the income a property may generate on an ongoing basis.
Like to chat about your finance options?
Rental yields can be an important consideration for investors entering the market, particularly in the current environment.
If you’re considering starting your property investment journey, we can help you compare different loans and lenders to find an option that suits your needs and circumstances.
Get in touch today!
This information is general in nature and does not take into account your objectives, financial situation or needs. You should consider whether it is appropriate for your circumstances.