Australian Home Buyers Pause as Housing Market Faces Sharp Decline

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

Laidlaw estimates that house prices could fall by 10-15%, though he believes the decline may not be as severe. The Reserve Bank of Australia recently raised the official cash rate to 4.6%, its highest level in 15 years, further straining borrowers. Major banks have passed on the rate hike to customers, increasing mortgage rates and adding pressure on homeowners.

Despite the market challenges, People First Bank reported strong financial results for 2025/26. The bank's profit rose by roughly 10% to $48.7 million, with total loans and advances growing 8% to $22.8 billion. Total assets expanded 7% to $27.1 billion, and the bank added 36,000 new members, bringing its total to 750,000. Laidlaw attributes the bank's resilience to its customer-focused model and absence of shareholder pressure.

Formed from the merger of Heritage Bank and People's Choice Credit Union in 2023, People First Bank operates with joint headquarters in Adelaide and Toowoomba. Laidlaw emphasizes the bank's ability to weather market headwinds, noting that its challenger status allows it to perform well even in a moderating lending environment.