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mortgageshousingAustraliainterest rates
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Related tickers and likely impact
AUD/USD
• NeutralRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/20/2026 | 0.70040 |
| Change that session | +0.35% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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- Stockland ( SGP ASX ) housing buyer inquiries drop to seven - year low as residential property downturn continues
Stockland's new housing inquiries, a leading indicator of future sales, fell to 10,452 in the three months to September, almost half the 20,183 recorded in the December quarter. That is the lowest level since the September quarter of 2020 and the lowest in at least seven years. The company, the country's largest listed diversified developer, linked the decline to higher interest rates, rising construction costs and broader economic uncertainty that have stifled demand from potential buyers.
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Couple Jessica Ongarello and Callum McIntyre decided two months ago to buy in the area they want to live in, taking advantage of falling house prices after years of renting. Domain's September Quarter 2026 House Price Report shows Melbourne prices fell 3.3% in the quarter, a third straight quarterly decline, and the downturn spread nationwide for only the second time on record, with prices falling across every capital city. Perth recorded a record 4.7% drop, while Sydney prices fell 4.7% to $1.66 million, a two-year low. Higher interest rates, cost-of-living pressures and changes to housing investment tax policy have weakened buyer confidence and borrowing capacity, and Domain's chief residential economist said prices could keep falling for many months. Morgan Stanley expects the market to bottom out in the second half of 2027, with a peak-to-trough decline of up to 15%.
- Higher for longer : why low rates are relics of the past
Mortgage holders should expect interest rates to stay higher for longer, whether or not the RBA lifts them again. The RBA says intense global competition for capital from AI and data centre companies is pushing up the neutral rate, and assistant governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad. The cash rate is now 4.6%, the highest in 15 years, and markets have almost fully priced in another rise by mid-2027, with no expected falls below current levels before mid-2028. Economists Luke Yeaman and Paul Bloxham link high government spending, at 26.9% of GDP in 2025/26 and the highest in 40 years excluding COVID-19, to weaker rate effects, and Bloxham urged further federal spending cuts.
- Higher for longer : why low rates are relics of the past
Mortgage holders should expect rates to stay high for longer, whether or not the Reserve Bank of Australia (RBA) lifts them again. The RBA says competition for capital from AI and data centre companies is pushing up its estimate of the neutral rate, which Christopher Kent said appears to be rising in Australia and abroad. At 4.6 per cent, the cash rate is the highest in 15 years, markets have almost fully priced in another rise by mid-2027, and they do not expect rates to fall below current levels before mid-2028. Luke Yeaman of Commonwealth Bank warned that higher government spending would force the RBA to push rates harder, while Paul Bloxham of HSBC urged spending cuts after federal government spending reached 26.9 per cent of GDP in 2025/26. Treasurer Jim Chalmers has flagged further savings measures in the December update, though previously announced savings face resistance in parliament.
- Higher for longer : why low rates are relics of the past
Mortgage holders should expect interest rates to stay high for longer, as the RBA warns that AI and data-centre investment is pushing up the neutral rate. Assistant governor Christopher Kent said there is reasonable evidence that neutral rates are rising in Australia and abroad. The cash rate sits at 4.6%, its highest in 15 years, and markets do not expect rates to fall below current levels before mid-2028. Commonwealth Bank economist Luke Yeaman argued that heavy government and AI spending makes rate hikes less effective, while HSBC's Paul Bloxham urged tighter fiscal policy ahead of the December update.
- Higher for longer : why low rates are relics of the past
Mortgage holders should expect interest rates to stay high for longer, whether or not the RBA lifts them again. The RBA says intense global competition for capital from AI and data centre firms is pushing up its estimate of the neutral rate, and Assistant Governor Christopher Kent said there is reasonable evidence neutral rates are rising in Australia and abroad. At 4.6%, the cash rate is at its highest in 15 years; markets have scaled back bets on another hike, but a rise by mid-2027 is nearly fully priced in, and no fall below current levels is expected before mid-2028. Heavy government and AI-related spending may be reducing the effectiveness of rates, forcing the RBA to hit households harder, and Luke Yeaman of Commonwealth Bank warned that more government spending would be a serious mistake. HSBC's Paul Bloxham urged further federal spending cuts, as federal spending reached 26.9% of GDP in 2025/26, the highest level in 40 years excluding COVID-19.
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