Australian Home Buyers Pause Amid Falling Housing Market

Australian home buyers are adopting a wait-and-see approach as the housing market continues to decline. Property data from Cotality shows house prices have dropped 6.4% in 2026, driven by high interest rates, rising living costs, and federal tax changes. Steve Laidlaw, chief executive of People First Bank, noted that potential buyers are hesitant to act until the market stabilizes, which is also affecting sellers.

Laidlaw predicted a potential 10-15% reduction in housing prices, though he believes the decline may not be as severe. The Reserve Bank of Australia's recent cash rate hike to 4.6%, its highest in 15 years, has further increased mortgage rates, adding pressure on borrowers. Some homeowners now find themselves with loans exceeding their property values.

Despite these challenges, People First Bank reported a 10% increase in profit to $48.7 million for the 2025/26 financial year. Total loans and advances grew by 8% to $22.8 billion, while assets expanded by 7% to $27.1 billion. The bank added 36,000 new members, bringing its total to 750,000. Laidlaw attributed this growth to the bank's customer-focused approach, emphasizing service and community support.

People First Bank, formed by the merger of Heritage Bank and People's Choice Credit Union in 2023, operates from joint headquarters in Adelaide and Toowoomba. Laidlaw highlighted the bank's ability to weather market headwinds, noting its challenger status allows it to manage moderation in lending growth effectively.