Cold feet and cooling prices: Australia’s property market is transforming – and first home buyers aren’t biting
Summary
Australia's housing market is slowing down as first home buyers and investors reduce their buying activity. Rising interest rates and tax changes have caused home loan applications to drop and house prices to fall, especially for expensive homes.Key Facts
- First home buyers are buying less due to higher interest rates and uncertainty.
- Home loan applications in May were 10.9% lower than the previous year, with first-time buyer applications down 13.4%.
- Loan Market reported a 20% fall in first home loan applications in June compared to June 2025.
- Homes priced below certain limits set by a government 5% deposit scheme rose in price longer but started falling in June.
- More expensive homes, especially in Sydney, Melbourne, and Canberra, have seen bigger price drops recently.
- The Reserve Bank’s interest rate increases pushed average new home loan rates above 6% per year.
- Some buyers are hesitant because they fear prices may drop further.
- In cities like Brisbane, buyers want fully renovated expensive homes and are ignoring properties that need repairs.
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