Welcome to our December Newsletter
2025 delivered a surge in national dwelling values, with November marking the third month in a row that had growth of 1% or more. Even as the pace began to ease, momentum remained strong across much of the country.
Three cash rate cuts, renewed confidence, investor activity and the federal government’s expanded Home Guarantee Scheme (now the 5% Deposit Scheme) all played a major role in driving prices upward throughout the year.
If you’re thinking about buying a property this summer, now could be a good time to explore your finance options. Get in touch and we’ll help you get pre-approval sorted and guide you through the entire purchasing process.
At its last meeting for 2025, the Reserve Bank of Australia (RBA) left the cash rate on hold at 3.60%, holding firm despite shifting economic pressures.
The Consumer Price Index (CPI) rose 3.8% in the year to October, up from 3.6% in September. Underlying inflation, measured by the trimmed mean, also lifted slightly from 3.2% to 3.3% over the same period.
With inflation pushing above the RBA’s preferred 2–3% target band, the prospect of a cash rate cut appears increasingly unlikely. In fact, three of the Big Four banks now expect rates to hold for longer than previously forecast, while some economists are even warning of potential cash rate hikes in early 2026.
The next RBA cash rate decision will be announced on 3 February, giving borrowers a window to reassess their home loan strategy. If it’s been a while since your loan was reviewed, now may be a good time to consider a home loan review.
We’ll analyse the market for you and check whether your current loan is competitive, cost-effective, and aligned with your goals for the year ahead.
National housing values increased 1% in November, slowing down from October’s 1.1% gain.
Perth led the way, with prices increasing 2.4%. Sydney and Melbourne saw values increase 0.5% and 0.3% respectively, but every other capital city recorded a rise of at least 1% throughout November.
Cotality research director Tim Lawless said that growth in home values across the mid-sized capitals was once again diverging from the larger cities – a similar trend to the one seen in late 2023 and 2024.
“With inflation once again above the RBA’s target range and rates potentially on hold for the foreseeable future, it’s likely housing sentiment will suffer,” said Mr Lawless.
“With housing affordability already stretched and worsening, it stands to reason that fewer borrowers will be able to access credit as serviceability barriers become more prominent.
“We can already see the flow-through effect from such stretched affordability and serviceability measures, with growth in housing values skewed towards lower price points of the market.
“Over the past three months, most of the state capitals have seen values across the lower quartile of the market rising the fastest. Melbourne, where housing affordability isn’t quite as stretched, is the one exception, with the city’s broad middle of the market is seeing the fastest lift in values.”
| All dwellings | Auctions | Clearance Rate | Private Sale | Monthly home values change |
|---|---|---|---|---|
| VIC | 1367 | 61% | 1375 | ▲ 0.3% |
| NSW | 1181 | 54% | 1840 | ▲ 0.5% |
| ACT | 91 | 57% | 117 | ▲ 1.0% |
| QLD | 237 | 47% | 1150 | ▲ 1.9% |
| WA | 15 | 47% | 540 | ▲ 2.4% |
| NT | 1 | 100% | 27 | ▲ 1.9% |
| TAS | 2 | 100% | 159 | ▲ 1.2% |
| SA | 123 | 70% | 294 | ▲ 1.9% |
With multiple interest rate reductions already behind us in 2025 and rates currently holding steady, many people are reassessing their plans to purchase a home. Depending on your personal circumstances, this may be a time to review whether buying your first property, upgrading, or expanding your investment portfolio is the right move for you.
From February 2026, new lending rules will also come into effect. The Australian Prudential Regulation Authority (APRA) will introduce a 20% limit on the proportion of new home loans issued to borrowers with a debt-to-income (DTI) ratio of six or more, with different limits applying to owner-occupiers and investors.
These changes are aimed at managing higher-risk lending, which APRA has observed rising alongside recent interest rate decreases and increases in property prices. While the new rules do not automatically prevent a borrower with a DTI of six or more from getting a loan, they may influence how individual lenders allocate credit across different borrower types.
If you’re considering a purchase in the coming months, it may be helpful to understand how these developments could affect your borrowing capacity, alongside your income, expenses, and financial position. Exploring your options early can provide clarity and help you plan ahead with confidence.
If you’d like guidance on what may be suitable for your situation or want to discuss pre-approval, please get in touch.
