by Dejan Pekic
Housing Market & Affordability: What’s Really Happening
Posted by Dejan Pekic
While the RBA held the cash rate at 4.35% in June, three successive rises earlier in the year – in tandem with major changes to CGT and negative gearing – continue to influence the property market.
What you may be seeing are headlines around reducing borrowing power and falling property values. The situation is a little more nuanced.
After decades of accelerating property prices, we are seeing falling prices – but not uniformly. Cotality’s national Home Value Index fell 0.4% in June, the largest monthly drop since December 2022. Capital city values are down 1.3% over the quarter, with Sydney and Melbourne leading the charge.
Conversely, cities traditionally seen as more affordable, such as Perth, Adelaide and Brisbane, continue to experience gains. In Perth, property values remain up 20.5% over the last 12 months.
There’s also a disparity between houses and apartments, with unit prices stable or increasing. That reflects demand, with more Australians buying units due to cost-of-living pressures, high interest rates and reduced borrowing capacity, with some estimates suggesting an individual on an average wage has lost roughly $36,000 in borrowing power this year, while a dual-income couple have lost around $72,000.
One thing to remember. If you held an investment property before 12 May 2026 (Budget day), nothing changes, and you can keep negatively gearing and accessing the old CGT discount. For new investment properties, there are exemptions for off-the-plan apartments and new house and land packages.
There’s a lot to consider if you’re considering buying or selling an investment property now. At Newealth, we provide tailored financial guidance to give you more clarity around your options, so contact us for a confidential discussion.
General Advice Warning:
The information in this blog is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for you and seek professional advice before making any financial decisions.
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