Welcome to our
February Newsletter
It’s been a busy few weeks in the property world.
Most notably, the Reserve Bank of Australia increased the cash rate for the first time since November 2023. Even so, property prices have continued to climb in several markets and housing confidence has held up.
As interest rates and lending conditions shift, having professional guidance can help you navigate your options. Whether you’re purchasing or thinking about refinancing, we can compare lenders and help you understand what’s available.
Interest Rate News
At its first meeting for 2026, the RBA hiked the cash rate 0.25 percentage points to 3.85% in response to rising inflation data.
The widely anticipated decision marked the end of the shortest rate-cutting cycle in the RBA’s modern history, after three cash rate reductions in February, May and August of last year.
The Consumer Price Index (CPI) rose 3.8% in the 12 months to December, up from 3.4% in the 12 months to November.
Meanwhile, underlying inflation (as represented by the trimmed mean) was 3.3% in the 12 months to December, slightly up from 3.2% in the 12 months to November.
The RBA wants inflation “sustainably” within its target band of 2 to 3%, preferably around the midpoint.
“The recent run of data gives the board a clear enough view (that) the underlying inflation is too strong,” RBA governor Michele Bullock told reporters after the decision.
“Now, I know this is not the news that Australians with mortgages want to hear, but it is the right thing for the economy.”
After the decision, all of Australia’s big four banks were quick to announce they’d be passing on the cash rate increase.
According to Roy Morgan data, February’s cash rate hike could send 1.3 million households into mortgage stress territory, adding another $115 to the monthly repayment on an average $694,000 mortgage.
If you’re feeling concerned, reach out and we’ll let you know whether your lender is increasing your interest rate, what that means for your repayments and whether you could find a more competitive loan elsewhere.
The RBA board will announce the next cash rate call on 17 March. February’s decision was unanimous, and there’s widespread talk there may be more increases to come.
Home Value Movements
According to Cotality, national dwelling values rose 0.8% in January, up from a 0.6% increase in December, with all capital cities recording positive growth for the month.
Perth outshone all the other capitals, with prices rising 2%. Brisbane’s monthly gain slowed from 2% in October last year to 1.6% in January, and Adelaide’s monthly increase dropped back to 1.2% from a 1.8% rise in December. Sydney and Melbourne lagged behind.
Cotality research director Tim Lawless noted that housing values are still rising despite affordability constraints and the prospect of further rate hikes, though momentum is expected to slow.
“The ongoing capital gains reflect persistently low inventory in the face of above-average housing demand, however, we are likely to see demand side pressures gradually ease in 2026,” he said.
“Affordability and serviceability constraints are likely to naturally dampen demand, but also renewed cost-of-living pressures and a strong chance that interest rates will rise. There is also slowing population growth to consider.”
Meanwhile, regional markets performed strongly in January, with Cotality’s combined regionals index up 1%.
Ready to buy?
With interest rates trending higher, it may be a good time to review your home loan and consider your options. Refinancing could help reduce the amount of interest you pay overtime, making it worth exploring.
Likewise, if you’re planning to buy, we can compare the market and organise pre-approval on your finance, so that you can dive in confidently with an offer or bid.
It’s also worth noting that from 1 February, the Australian Prudential Regulation Authority (APRA) introduced limits on high debt-to-income lending. Banks are now restricted to issuing no more than 20% of new home loans to borrowers with a debt-to-income ratio of six times or more, with the cap applied separately to owner-occupier and investor loans.
The measure is designed to curb risky lending, so if this applies to you, chat to us about your options.
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/
Property investment trends for 2026
For many property investors, 2025 offered compelling reasons to buy.
The cash rate came down three times and property prices soared in many markets, driven by lower rates, tight housing supply and government incentives. Meanwhile, rents continued to climb across much of the country.
So, following February’s cash rate increase, what might investors expect next? Below we explore key investment property trends likely to shape the market in 2026.
Uneven price growth across markets
National home values are projected to continue to rise, but growth is unlikely to be evenly spread.
Insights from Cotality’s Decoding 2026 report show that 87% of real estate agents and financial professionals across the property and finance sectors expect dwelling values to rise over the year ahead, while only 3.5% anticipate prices to fall.
Queensland, Western Australia and South Australia are considered the most bullish markets, with strong price performance supported by high population growth and limited supply.
Looking ahead, Perth, Adelaide and Brisbane are expected to outperform Sydney and Melbourne, where price momentum softened towards the end of 2025.
Increased demand for dual-occupancy properties
Properties that can accommodate multi-generational living are expected to be in high demand throughout 2026.
As both housing prices and rents rise, more families are choosing to live together, making dual-occupancy homes particularly attractive to investors. This includes properties such as a main residence with a granny flat, duplexes, side-by-side townhouses, or homes with a detached studio or cottage that functions as a second dwelling.
These types of properties can offer investment benefits, including higher rental income, greater flexibility and reduced risk.
An uptick in regional investing
Investors seeking value outside the capital cities may have regional areas on their radar in 2026. Regional markets often offer lower entry costs than capital cities, high rental yields, and the opportunity for investors to diversify their portfolios across geographic locations.
In terms of price growth, regional areas have remained comparatively strong, yet they’re still feeling some pressure. Flexible working arrangements and lifestyle migration has meant more people are thinking of moving to regional areas, increasing demand for housing.
In 2025, regional dwelling values rose 9.7%, compared to 8.2% across the combined capital cities. Western Australia stood out, with a 16.1% annual increase, followed by regional Queensland, which saw values rise 12.6%. Regional Victoria had the lowest growth, up 6% in 2025.
Energy efficiency a priority
Energy efficiency and climate resilience are becoming increasingly important considerations for investors.
Properties with features such as solar panels, battery storage, electric vehicle charging, quality insulation and smart energy management systems are expected to be more appealing to tenants in 2026, which in turn can enhance long-term investment appeal.
Young buyers looking to rentvest
Rentvesting is expected to gain further momentum in 2026, particularly among younger buyers navigating affordability challenges.
Rentvesting involves renting in a location that suits your lifestyle, while purchasing an investment property in a more affordable area with the potential for solid rental returns.
This approach can suit buyers who value flexibility and lifestyle, are priced out of their preferred suburb, but still want to build wealth through property ownership.
Thinking about investing?
With the right knowledge and support, property investors can navigate 2026’s property market with confidence and take advantage of emerging opportunities.
If you’re considering purchasing an investment property this year, get in touch. We can help you understand your borrowing capacity, compare lender options and structure your finance to support your long-term investment goals.
Are you secretly paying ‘loyalty tax’ on your home loan?
Loyalty is an honourable trait, but not necessarily when it comes to your home loan.
Sticking with the same lender indefinitely may mean you’re paying what’s known as a ‘loyalty tax’. This often shows up as higher interest rates compared to what new customers are offered.
With interest rates on the rise, now could be a good time to check whether you are paying loyalty tax and it may be worthwhile exploring your options along the way.
What is loyalty tax?
Loyalty tax refers to the extra cost some borrowers pay simply by staying with the same home loan provider over time.
To attract new customers, lenders often advertise lower interest rates or special offers that aren’t automatically passed on to existing borrowers. As a result, long-term customers can end up paying a higher rate without realising it.
In some cases, the longer you remain with one lender, the more a loyalty tax can creep in. That’s why reviewing your home loan from time to time can help ensure you’re still on a competitive rate.
Interest rates aren’t the only area where loyalty tax can apply. In some cases, long-standing customers may miss out on special offers, encounter additional fees, or receive a lower standard of customer service than new customers.
Why it pays to review your home loan
Whether it’s your utilities or your mortgage, comparing providers can help you identify areas to save. While the amounts may seem small at first, they can accumulate over time and contribute to broader financial goals.
What to do if you’re paying loyalty tax:
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Compare rates
Start by checking how your current interest rate compares with the rates your lender is advertising to new customers. If there’s a noticeable difference, it may be time to take action.
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Request a lower rate
You may also consider negotiating directly with your lender to see if a more competitive rate is available. In some cases, lenders may apply a discretionary discount to retain existing customers. Having a strong credit history and a lower loan-to-value ratio can help strengthen your negotiating position.
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Shop around and refinance
If you’d like to see what else is out there, we can compare home loans across the market for you.
If we find a more suitable or competitive option, refinancing could be worth a look and it may even give you access to new customer offers. We’ll break down the potential savings and explain any costs involved, so you can decide with confidence.
Ready to say goodbye to loyalty tax?
When it comes to home loans, it doesn’t pay to set and forget. Regularly reviewing your mortgage and comparing options can help reduce the risk of paying a loyalty tax.
The good news is that refinancing is generally more straightforward than buying a property. There’s no contract of sale, no real estate agents, and often far fewer parties involved – just us and, in many cases, your lender.
To get started, Get in touch today and we’ll help you run the numbers.
First home buyer decisions: Apartment or a house on land?
If you’re looking to buy your first home in 2026, one of the first big questions is whether an apartment or a house makes more sense for you, which often comes down to your lifestyle, financial situation and what you’re working towards.
Each option comes with its own benefits and trade-offs, so understanding the differences can help you make a more confident decision.
Let’s take a look at the pros and cons of each.
APARTMENT
Lower price tag
Buying an apartment may allow you to get into the market sooner, as apartments are usually more affordable than houses.
Take Sydney, for example, where the median house price is more than double the city’s median unit price.
A lower purchase price usually means a smaller deposit and a more manageable mortgage.
Capital growth potential and rental appeal
Apartment prices are growing faster than house prices in most capital cities, although Melbourne buyers are not quite convinced.
If you decide to rent the property out in future, apartments can possibly offer an attractive rental yield (the annual rental income as a percentage of the property’s value) in some areas.
Lower running costs
Living in a smaller property means less electricity and gas usage, and therefore lower utility costs.
Less maintenance
Apartment living often comes with less maintenance and common areas are typically looked after by strata management. This means you’re less likely to spend weekends mowing lawns or tending gardens.
Security and lifestyle appeal
In some cases, apartments may provide added security compared to suburban houses, particularly in complexes with controlled access.
They’re also frequently positioned in central or well-connected locations, close to cafés and other everyday amenities.
Pros
Cons
Strata or body corporate constraints
Apartment living often comes with strata or body corporate rules, such as limits on pets, renovations, or noise. While these help manage shared spaces, they may feel restrictive for some owners.
Costly fees
Depending on the amenities, strata fees can be costly and are an ongoing expense. Over time, these fees can add to the overall cost of apartment ownership.
Less space and privacy
Living in a smaller space is not for everyone. Common areas can also mean sacrificing your privacy, as you’ll be sharing these areas with neighbours.
Oversupply risk
In suburbs with a high number of apartments, oversupply can affect demand and resale value. Boutique complexes with fewer units may perform better than large high-rise developments.
HOUSE
Pros
Long-term capital growth potential
Houses have traditionally delivered stronger long-term capital growth, largely due to the value of the land. That said, apartments in some cities have recently recorded faster short-term growth.
No strata constraints or fees
Unlike apartments, houses don’t come with strata fees or body corporate rules. This generally gives owners more freedom to renovate, extend, or personalise their home.
More space and privacy
Houses typically offer more internal and outdoor space, along with greater privacy. This can be appealing if you value room to entertain, garden, or enjoy facilities like a pool without interruption.
Cons
Higher entry point
Houses generally come with a higher purchase price and require a larger deposit. For some buyers, this may mean looking further from the CBD or their workplace to stay within budget.
More maintenance
With more space comes more upkeep. Houses typically require ongoing maintenance, and older properties can involve higher repair and renovation costs over time.
Higher costs
A higher purchase price can also mean higher upfront costs, such as stamp duty. Ongoing expenses like insurance and general upkeep may also be higher compared to an apartment.
Ready to get started?
There’s no universal ‘right’ answer as to whether an apartment or house is better.
It all depends on your budget, lifestyle and long-term goals. If you’d like help understanding your borrowing capacity or talking through your purchase plans, Get in touch today.
We can review your finances and help you assess which type of property may be the best fit for you.