Welcome to our January Newsletter
Last year was an exciting one in the property world. The Home Value Index (as measured by Cotality) surged 8.6% in 2025, adding roughly $71,400 to the national median dwelling value. Three cash rate cuts, increased investor activity and the federal government’s expanded Home Guarantee Scheme (now called the 5% Deposit Scheme) all contributed to price growth in 2025.
However, by the end of the year, home value growth was losing momentum in most markets. Experts are predicting a weaker start to housing trends in 2026, with uncertainty around inflation and interest rates likely to weigh on housing confidence. Ongoing affordability challenges and renewed focus on household debt and credit policy are also likely to influence buyer sentiment.
If you’re looking to purchase a property this year, get in touch early to discuss your finance options. We can explain your borrowing capacity, help you work through the deposit requirements, and organise pre-approval on your finance.
The Consumer Price Index (CPI) rose 3.4% in the 12 months to November 2025, down from a 3.8% increase in the 12 months to October 2025.
Inflation continued its gradual retreat in November, with trimmed mean inflation easing to 3.2% over the year, down from 3.3% in October.
All eyes are now on the Reserve Bank of Australia, which will hold its first monetary policy meeting of 2026 next month, ahead of a cash rate announcement on 3 February.
In December, RBA governor Michele Bullock flagged a possible rate increase if inflation could not be contained.
Meanwhile, Australia’s Big Four banks are split on the outlook for early 2026, with some tipping the cash rate to hold steady and others forecasting a 25 basis point increase in February.
With uncertainty around where rates are headed, it could be a good time to review your mortgage and make sure it’s still working for you.
Get in touch today and we can compare your loan against the wider market to see whether it remains competitive.
According to Cotality, national dwelling values rose 0.7% in December – the smallest gain in five months.
After nearly a year of steady growth, Sydney and Melbourne edged lower in December, with home values down 0.1% – the first monthly decline since January last year.
All other capital cities and broad regional markets continued to record price rises, albeit at a more subdued pace.
Cotality research director Tim Lawless said the easing conditions could signal a softer opening to housing market trends in 2026.
“Renewed speculation that the rate cutting cycle is over and the next move from the RBA could be a hike has dented housing confidence,” he said.
“A ‘higher for longer’ setting on interest rates, alongside a resurgence in cost-of-living pressures and worsening affordability pressures, looks to have taken some heat out of the market.”
Regional markets proved more resilient in December, slowing to 1% growth from the previous month’s increase in values of 1.2%. Over the calendar year, regional dwelling values rose by 9.7%, outpacing the 8.2% rise recorded across the combined capital cities.
| All dwellings | Auctions | Clearance Rate | Private Sale | Monthly home values change |
|---|---|---|---|---|
| VIC | 16 | 69% | 1030 | ▼ – 0.1% |
| NSW | 5 | 20% | 615 | ▼ – 0.1% |
| ACT | 0 | — | 33 | ▲ 0.3% |
| QLD | 9 | 44% | 823 | ▲ 1.6% |
| WA | 7 | 43% | 541 | ▲ 1.9% |
| NT | 0 | — | 14 | ▲ 1.7% |
| TAS | 0 | — | 128 | ▲ 0.9% |
| SA | 14 | 71% | 208 | ▲ 1.9% |
With uncertainty around where rates are headed, it may be worth expediting your purchasing plans.
From February, the Australian Prudential Regulation Authority (APRA) will introduce new limits on high-debt lending, capping the share of new home loans issued to borrowers with a debt-to-income (DTI) ratio of six or more at 20%. The cap will apply separately to owner-occupier and investor loans.
The changes are aimed at curbing higher-risk lending so, if this could affect you, it’s worth having a conversation about your options sooner rather than later.
To discuss your finance needs, get in touch today. We’re here to help make your 2026 purchasing plan a reality.
