More house price falls on cards as rates squeeze buyers
FinancePerthNow

More house price falls on cards as rates squeeze buyers

The RBA raised the cash rate to 4.6 per cent, its highest in 15 years, and economists warn house prices could fall further and longer than before.

While not yet in uncharted territory, Australia's housing market is in for a hiding from higher interest rates, lower borrowing capacity and tax changes.

The Long Sip
What happened

The Reserve Bank lifted the cash rate to 4.6 per cent, its fourth rise this year and the highest level in nearly 15 years.

The detail

National dwelling values have already fallen 3.1 per cent in the three months to end of August, according to housing data firm Cotality.

What it means

Economists warn this downturn could be deeper than past ones because households now spend more than half their income servicing their mortgage.

For you

Borrowing capacity has dropped by $90,000 since February, and monthly repayments on an average mortgage are up more than $450 since the start of 2026.

Full story at PerthNow

What readers are saying

jazzyj
The bit about mortgage servicing jumping from a third of household income in 2011 to over half now is the real problem - it's not just about the rate rise itself, it's that people have nowhere left to absorb the hit.
nita_sunbury
Watch out for the tax tweaks on investors mentioned in the piece. That is going to keep pushing values down faster than previous cycles.
richardr
Average mortgage payments are taking over half of household income now.
PerthMum_Steph
The drop in borrowing capacity down by $90,000 since February explains why fewer buyers can compete right now. On top of that, rising material and fuel costs mean builders are pricing those increases directly into new quotes, so construction stays expensive.
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