How the budget is reshaping borrowing capacity — and where property opportunities are emerging
Three rate rises in five months have done what they were designed to do — cool the market. But this isn’t a uniform story. Across Australia we’re seeing a deeply uneven picture: some cities softening, others still climbing, and within that shift there are genuine windows of opportunity — particularly for buyers who’ve been priced out or waiting on the sidelines. Here’s my plain-English breakdown of what’s happening nationally, city by city — and what I think it means for you right now.
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Cash Rate
4.35%
After 3 hikes in 2026
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National Prices (May)
−0.04%
Broadly stable nationally
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Next RBA Decision
16 Jun
Pause widely expected
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Investor Impact — Must Read
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First Home Buyers
Your moment may be now
For years, first home buyers have faced the double challenge of rising prices and tighter borrowing capacity. That equation has started to shift. A cooling market in Sydney and Melbourne, combined with the most generous first home buyer support package Australia has ever offered, means the window that’s opened here is real — but it won’t stay open indefinitely.
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First Home Guarantee
Buy with just a 5% deposit — no LMI. The government guarantees the remaining 15%. All four major banks now on the panel, including ANZ as of last month.
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No Income Caps
As of October 2025, income caps were removed entirely. No maximum income disqualifies you from the federal first home buyer schemes.
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LMI Saving
On a $700,000 property, the 5% deposit scheme can save you ~$20,000–$25,000 in LMI costs alone — and gets you into the market years sooner.
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Updated First Home Guarantee property price caps — effective October 2025
| City / Region |
Price Cap |
Change |
| Sydney & NSW Metro | $1,500,000 | ↑ From $900K |
| Brisbane & QLD Metro | $1,000,000 | ↑ From $700K |
| Melbourne & VIC Metro | $950,000 | ↑ From $800K |
| Adelaide & SA Metro | $900,000 | ↑ Updated |
| Perth & WA Metro | $900,000 | ↑ Updated |
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Queensland buyers — urgent deadline: The Queensland First Home Owner Grant of $30,000 applies to eligible contracts signed on or before 30 June 2026. That deadline is weeks away. If you’re buying in QLD and haven’t explored this, please contact Jasmine today — we may still have time. |
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Broader Market Update
What’s happening across Australia right now
The Big Picture
A two-speed market is emerging
The three consecutive rate rises of 2026 have had their most pronounced effect on Australia’s two most expensive cities. Sydney and Melbourne are recording modest monthly price falls, buyer sentiment has softened, and national auction clearance rates are tracking in the mid-to-high 50% range — well below the frenzy of 2025. Meanwhile, mid-sized capitals and many regional markets continue to hold firm or grow. The result is a genuinely fragmented, multi-speed market where your strategy depends heavily on where you’re buying and who you are as a buyer.
City by City
What’s happening in your market
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Sydney
−0.9% in May | Median ~$1.92M
Cooling
Rate sensitivity is showing at the top end. Days on market are extending and negotiating power is returning to buyers with pre-approval in hand.
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Melbourne
−0.8% in May | Median ~$1.17M
Value Opportunity
Five years of underperformance has made Melbourne potentially the most undervalued major city in Australia. Buyers with capital are looking here ahead of the next cycle peak.
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Brisbane
Growth moderating | Houses ~$1.19M
Steady
Growth has moderated from its 2023–25 highs but remains solid. Units are outperforming on both price growth and yield. Olympic decade fundamentals remain intact.
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Adelaide
+12–14% YOY | Median ~$944K
Resilient
Still near record highs with the strongest annual growth of any major capital. The pace has moderated — buyers now have more time to assess and finance is scrutinised more carefully.
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Perth
+20.6% YOY | First monthly dip
Strong Long-Term
First monthly price dip since late 2024, but annual growth remains extraordinary. Tight supply, strong employment and ongoing migration underpin structural strength.
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Regional Australia
+0.2% in May — outperforming capitals
Growing
Regional markets continue to grow even as major capitals soften. Lifestyle regions, coastal markets and mining-adjacent areas are attracting buyers priced out of the cities.
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What to Watch
The outlook from here
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16 June — RBA decision: A pause is widely expected, with ANZ, CBA and NAB all forecasting the RBA to hold at 4.35%. If confirmed, this gives borrowers and the market breathing room to absorb the three rises already delivered. |
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August remains ‘live’: A pause now doesn’t mean rates have peaked. The August meeting — following June quarter CPI data — could see further action if inflation doesn’t ease. Westpac is alone among the majors forecasting another hike before year end. |
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Markets pricing one more: ASX interbank futures are pricing at least one further 25bp increase later in 2026 — likely September or October — taking the cash rate to 4.60%. Variable rate borrowers should factor this into their planning now. |
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Supply remains the floor: Strong employment, tight housing supply and high construction costs are expected to prevent significant price falls nationally. Australia’s population is forecast to exceed 30 million by 2030 — structural undersupply continues to underpin long-term values. |
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What We Recommend
Your next steps in this market
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Review your current loan. With three rate rises behind us and the market shifting, now is the time to check whether your current rate, structure and lender are still the right fit. We may be able to negotiate a better deal — or find one elsewhere. |
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First home buyers — explore your eligibility now. The combination of the First Home Guarantee, updated price caps, and a slightly more accessible market makes this one of the most favourable windows for first home buyers in several years. |
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Consider fixing all or part of your loan. If another rise materialises in August or later, having a portion locked in provides certainty. We can model fixed vs variable vs split scenarios based on your specific situation. |
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Don’t wait for the perfect moment. The pause expected on 16 June is a window — not a guarantee. Borrowers who act during periods of stability consistently outperform those who wait for a certainty that never quite arrives. |
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Let’s talk through your options
Whether you’re a first home buyer, looking to refinance, or managing an investment in a changing market — every situation is different. I’m here to help you work out what this means specifically for you.
Book a free 15-min consultation
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