Welcome to our
June Newsletter

After years of relentless growth, Australia’s property market is showing signs of slowing, with home values stalling in some cities and falling in others.

Rising interest rates have stretched affordability to its limits, and the federal budget’s proposed tax reforms have only added to the uncertainty. The result? Buyers are pulling back, and auction clearance rates are feeling the pressure.

In case you missed it, the latest federal budget proposed new changes that are set to take effect from 1 July 2027. This will limit negative gearing for residential property investments to new builds and replace the 50% Capital Gains Tax (CGT) discount for individuals, trusts and partnerships with cost base indexation and a 30% minimum tax rate on capital gains.

The good news for existing investors is that these changes will be limited in their impact. Properties you already owned on or before 7:30pm AEST on 12 May 2026 are exempt from the negative gearing changes. And if you sell a property, the new CGT rules only apply to any profit earned after 1 July 2027.

If you’re planning an upcoming winter property purchase, we can explain your borrowing capacity and organise pre-approval on your finance.

Interest rate news

At its latest meeting, the Reserve Bank of Australia (RBA) left the cash rate on hold at 4.35%, following three consecutive rate hikes so far this year.

Inflation is easing with Australia’s annual Consumer Price Index (CPI) dropping to 4.2%, which is down from 4.6% in March.

However, the RBA’s preferred measure of inflation, which is called underlying inflation, still sits at 3.4%. That’s above the 2–3% target band that the RBA needs to hit before it will consider cutting rates.

RBA governor Michele Bullock recently said higher interest rates were working, but struggling households could face up to two more years of cost-of-living pain.

“These increases have been necessary to tighten financial conditions and slow growth in demand in the economy to ensure we get on top of inflation,” she said.

“We have already seen some signs that this tightening has worked, but it will take one to two years for the full effects to flow through the economy.

“Now I recognise this is a difficult time for many households facing cost-of-living pressures, but it is important we bring inflation under control.”

If your repayments are starting to feel like a stretch, it’s worth thinking about refinancing sooner rather than later.

That’s where we come in. We’ll compare the market on your behalf and find a home loan that works for your financial situation and goals. And if you’re a property investor trying to make sense of the federal budget’s changes, we can help you understand what it means for your portfolio.

The next cash rate decision lands on 11 August. Opinions are divided on what comes next, with some economists predicting more rises ahead, while others believe the peak is already behind us. We’ll keep you updated in the coming months.

Home Value Movements

Australia’s national home values were flat in May, which could be a sign that the housing market is continuing to lose momentum across most of the country.

Sydney and Melbourne led the declines with dwelling values falling 0.9% and 0.8% respectively. Canberra also slipped, down 0.2% for the month.

It’s a different story in other capital cities where home values are still rising, just not as fast as before. Perth and Darwin were the standout performers, leading monthly gains at 1.5%.

Cotality research director Tim Lawless said this level of diversity had been a defining feature of housing conditions over the past five years.

“While the speed of value change remains very different from city to city, the direction is becoming more consistent, with most markets losing momentum as demand-side headwinds intensify,” he said.

In addition to easing values, the slowdown in housing demand is also clear in lower home sales.

The estimated number of home sales over the past three months nationally was tracking 2.2% lower compared to a year ago and 4.1% below the five-year average.

“The largest drop in estimated sales can be seen in Sydney and Melbourne, down 17% and 14.2% on levels a year ago,” said Mr Lawless.

“These are also the cities where advertised supply has risen to above-average levels, providing more choice and better leverage for buyers.”

Housing values increased 0.6% across the combined regionals in May – the smallest monthly rise in a year.

Home Value Index

Ready to Buy?

Whether you’re buying your first home, upsizing or investing, we’re here to help every step of the way. We can walk you through your borrowing power and match you with the right home loan for your needs. Rather than shopping around yourself, we can do the legwork and help you compare what’s on offer across the market.

And if the proposed changes to negative gearing and the CGT discount have raised questions for you, don’t hesitate to get in touch.

Reach out today and let’s talk through what it could mean for you.

Additional sources

Cotality Daily Home Value Index: Monthly Values

https://www.corelogic.com.au/our-data/auction-results

https://www.realestate.com.au/auction-results

Is Refinancing still worth Considering?

With the cash rate on hold, many borrowers are taking a closer look at their home loans.

If you haven’t reviewed yours in a while, it may be worth exploring whether your current loan still suits your situation. With cost-of-living expenses still stretching household budgets, even a small reduction in your interest rate could make a meaningful difference to your monthly repayments.

Refinancing isn’t right for everyone, but it’s always worth understanding your options. Here’s what to consider before you decide.

Switching could make a meaningful difference

Interest rates can vary significantly between lenders. According to MoneySmart.gov.au, there can be a difference of more than 2% between variable home loan rates on the market. Depending on your loan size, this could translate to a meaningful difference in what you’re paying overtime.

If you’ve been with the same lender for some time, you may also be stuck paying ‘loyalty tax’. Lenders often reserve discounts and deals for new customers rather than existing ones, making it even more important to regularly review your home loan and compare others.

Factor in all fees and charges

Before refinancing, it’s important to understand the fees and charges that may apply. These can include:

Break fees — if you’re on a fixed-rate loan

Discharge fees — charged by your current lender to close your loan

Application fees — charged by the new lender to set up your loan

Switching fees — if you stay with the same lender but change loan products

Stamp duty — depending on your state or territory

Weighing up these costs against any potential change in your repayments is an important part of deciding whether refinancing makes sense for your circumstances.

Be aware of Lenders’ Mortgage Insurance

Before refinancing, it’s worth having a clear picture of your home’s current market value and how much equity you hold, particularly given that property values have fluctuated across many markets in recent years.

If you hold less than 20% equity in your property, refinancing may trigger a requirement to pay Lenders Mortgage Insurance (LMI). It’s also worth noting that LMI is generally not transferable between lenders, meaning even if you paid it on your original loan, you may need to pay it again on a new one.

This is an important cost to factor in when reviewing whether refinancing is the right move for you.

Consider the loan term

When refinancing, it’s important to pay attention to the loan term. Resetting to a longer term, such as 30 years, generally means paying more interest over the life of the loan, even if the rate is lower.

Depending on your circumstances, it may be worth considering a loan term that aligns closely with what remains on your current loan.

Be intentional with interest-savings features

When rates are rising, having a financial buffer can help ease pressure on your budget. Features like an offset account or redraw facility allow you to keep extra funds working against your loan balance, which may help reduce the interest you’re charged while still giving you access to those funds if needed.

It’s worth exploring whether your current or prospective loan includes these features as part of your review.

Get a professional on your team

Comparison websites can be a useful starting point, but they may not show the full picture. Some feature sponsored listings or a limited selection of lenders and products.

A mortgage broker can offer a more personalised approach, taking the time to understand your individual circumstances before comparing options across a wide range of lenders.

When reviewing your options, there are a few additional things to be aware of:

Switching costs vs. rate risk — it’s worth understanding any upfront costs involved alongside the potential impact of further rate movements

Serviceability — lenders will assess whether you can meet repayments under their lending criteria, which is an important part of any refinancing application

Rate lock — if you’re considering a fixed-rate loan, a rate lock option may allow you to secure a quoted rate while your application is being processed

To find out more, get in touch with our team for a home loan health check.

What a Softer Market means for Investors and Owner-Occupiers

Australia’s property market is moving through a softer phase. Rising interest rates, stretched affordability, and the federal budget’s tax reforms have eased buyer demand.

This is particularly evident across Sydney, Melbourne, and Canberra, where prices have drifted lower since the start of the year.

Conditions vary considerably by location, property type, and price bracket. While some markets continue to hold firm, others are seeing more listings, longer selling times, and vendors with greater motivation to negotiate.

For buyers who are prepared, a quieter market can present a different set of opportunities than what was available during the peak. So, what does a softer market actually mean for buyers?

Falling prices may make entry easier

Property values have been recording noticeable declines across a number of markets, with Sydney, Melbourne, and the ACT among the areas seeing the most movement. Auction clearance rates have hovered around 50% in recent weeks, a level hitting a six-year low and some experts are now expecting price declines of up to 10%.

While falling prices can reduce the entry point for some buyers, lower values don’t automatically translate to greater affordability. Higher interest rates affect how much buyers can borrow, which remains an important consideration regardless of where prices sit.

Less competition, more motivated sellers

As market conditions soften, buyer competition has eased in many areas, though supply constraints in some locations mean demand remains relatively firm.

In markets where the balance has shifted, vendors may have greater motivation to negotiate. This can create more room for discussion around price, purchasing conditions, and settlement terms than was typical during the peak of the market.

Vendor discounting

We are already seeing vendors discounting their prices amidst weaker market conditions.

According to Cotality, buyers have been paying around 5% less than the original asking price for private treaty purchases across capital cities in recent months, which is above the decade average of 3.3%.

The federal budget’s proposed changes to negative gearing and the Capital Gains Tax discount have also added uncertainty for investors, with some agents already adjusting price guides in response to weaker demand.

Properties are also taking longer to sell in many markets. For buyers, more time on the market can mean more opportunity to research, compare, and enter into negotiations without the same pressure that characterised the peak of the cycle.

Different real estate methods

Given the changing market, some sellers may opt for “expression of interest” (EOI) campaigns or private sales, rather than auctions. This can be beneficial for buyers, as it gives them more time to make calculated purchasing decisions.

With an EOI, buyers are invited to submit their best and final offer in writing by a specific date, along with their preferred terms and conditions. Under a private sale or private treaty, the property is listed with an asking price attached. These kinds of real estate methods offer buyers more time, lower-pressure negotiations, and the ability to potentially include subject-to-finance or building and pest inspections in their contracts.

Auctions, on the other hand, are generally unconditional and can be highly competitive. It’s best to come with a sense of urgency to act.

Ready to talk through your finance options?

If you’re thinking about taking advantage of the softening market conditions, understanding your borrowing capacity and finance options early can put you in a stronger position when the right property comes along.

Get in touch today to find out what may be available for you.

5 Tips for First-Home Buyers to kick off the New Financial Year

With property prices easing in some markets and recent federal budget housing tax reforms appearing to reduce investor competition, conditions may be becoming more favourable for first-home buyers. In this type of environment, there could be more choice, less pressure and more room to negotiate than we’ve seen in recent years.

Buying your first home can feel like a big leap, especially when prices, rates and lending rules are constantly changing. But the start of a new financial year provides a great opportunity to reset, get organised and understand what support may be available to help you take the next step.

Here are some tips if you’re looking to buy your first home this new financial year.

1) Review your finances

Before you start browsing listings or attending open homes, the most important thing you can do is to get your finances in shape.

Lenders don’t just look at your income. They’ll analyse your spending habits too, examining bank statements to build a picture of how you manage money day-to-day. That means your finances need to tell a good story.

Go through your statements and ask yourself what subscriptions, memberships, or recurring expenses you could cut or reduce. Even modest changes that are sustained over a few months can meaningfully strengthen your application and show lenders you’re financially disciplined.

2) Create a budget and supercharge savings

If you don’t already have one, a budget can be a useful tool for understanding your finances. Consider mapping out your after-tax income alongside your expenses, which might fall into essentials (like rent, groceries, utilities, and insurance) and non-essentials (such as eating out, entertainment, and hobbies).

From there, it can be interesting to see how much could potentially be saved each month. A well-known framework is the 50/30/20 rule — 50% toward essentials, 30% toward lifestyle, and 20% toward savings.

Keeping separate bank accounts for each “bucket” is something many people find works well for them.

3) Do a credit check

It’s worth taking a look at your credit report before you apply for a home loan. Lenders typically review your credit history as part of their assessment process.

Under the Privacy Act 1988, you’re entitled to a free copy of your credit report every three months from each of Australia’s three credit reporting bureaus: Equifax, Experian, and illion.

Your credit report generally includes information such as:

Your borrowing history over the past five years

Any credit applications you’ve made

Your repayment history

Each bureau also assigns a credit score, calculated on a different scale:

Because each bureau uses its own scoring system, your score may vary between them, and different lenders may use different bureaus.

If you spot any errors or information that doesn’t look right, contact the relevant credit reporting bureau directly to have it investigated and corrected.

4) Understand the government support

It’s important to familiarise yourself with government support that is available for first home buyers at a federal and state level. These schemes vary depending on where you’re buying and your personal circumstances.

Under the Australian Government 5% Deposit Scheme, first-home buyers can purchase a home with a minimum 5% deposit and backing from the Australian Government. There are no income caps, no limits on places, no waitlists, and you won’t be up for Lenders’ Mortgage Insurance (LMI).

The Australian Government Help to Buy Scheme is a shared equity initiative, whereby the government contributes up to 40% for new builds and 30% for existing homes. Buyers can purchase with a deposit as low as 2% without paying LMI, and there are 10,000 places each year.

There’s also the First Home Super Saver Scheme, which allows you to make voluntary contributions (up to $50,000) into your superannuation to save for a deposit, while taking advantage of concessional tax rates.

Depending on your situation and location, you may be eligible for other support such as the First Home Owner Grant or stamp duty exemptions/concessions. Chat to us and we’ll explain what’s available.

5) Get your finance sorted early

Before you start house hunting, it’s important to meet with a mortgage broker to understand your borrowing power. This will save you countless hours looking at properties that could be outside your budget.

After running through your financial situation, we’ll explain your borrowing capacity, and any upfront and ongoing costs to consider, such as stamp duty, legal fees and building and pest inspections.

We’ll help you apply to get your finances pre-approved with your preferred lender, so that you’re all ready to go when you find the right home.

Buying your first home is exciting, and there are a lot of good reasons to jump in now. Let’s make your home purchasing dream a reality this financial year.

Get in touch today.

Welcome to our June Newsletter