Australian property market trends after RBA rate decision

In this episode of The Property Playbook, host Tim Graham examines the shifting Australian housing market as conditions diverge across the country following the Reserve Bank of Australia’s decision to hold the cash rate at 4.35%.

Sydney and Melbourne are continuing to record price declines under sustained affordability pressure and higher borrowing costs, while several regional and smaller capital city markets are still seeing modest growth, albeit at a slower pace.

Research and Development Lead at Hotspotting, Cameron Kusher, explains that the prolonged period of elevated interest rates is likely to keep downward pressure on prices, particularly in higher-priced markets where borrowing capacity has been significantly reduced.

He notes that while some areas are showing resilience, the broader market is adjusting to a sustained tightening cycle rather than a temporary correction.

High inventory levels are also playing a major role in shaping current conditions, with listings in Sydney, Melbourne and Canberra sitting at decade highs.

Combined with weak consumer sentiment and tighter lending conditions, this is encouraging many buyers to remain on the sidelines as they wait for clearer signals on future rate movements.

First-home buyers are also facing increased risk, including potential negative equity for those with smaller deposits, although stable employment conditions are helping to limit broader financial stress.

Looking ahead, interest rates are expected to remain elevated into next year, keeping investment activity subdued and reinforcing a shift in strategy toward yield rather than capital growth.

While short-term conditions remain challenging, particularly in the most expensive markets, more resilient opportunities may continue to emerge in larger regional centres with stronger underlying economic fundamentals.