Aussie Housing Market 'Halt' as Buyers Flee Higher Rates

Mark Bouris, an expert in home loans who has been writing mortgages since the late 1990s, believes that Australians have simply stopped buying houses. He attributes this shift to both the May Federal Budget and three consecutive rate hikes by the Reserve Bank of Australia (RBA). The RBA raised its cash rate three times in the first half of 2026, taking it to 4.35% before holding steady in June.

Bouris points out that buyers who could previously borrow around $900,000 can now get roughly 10% less, approximately $810,000. This reduced borrowing power has resulted in a decrease in activity on his loan book.

The investor segment of the market has also seen a significant decline, dropping from nearly 37% to about 22%. First-home buyers have become even scarcer, making up 'hardly anything' of Bouris's borrowers. The balance, now around 80%, are refinancing.

Sellers, however, are not in a hurry to lower their prices, as more than half of all property owners are at least two years ahead on their repayments, giving them little pressure to sell. This has led to vendors pricing properties around February levels, which buyers can no longer afford with the reduced borrowing power.