Cold feet and cooling prices: Australia’s property market is transforming – and first home buyers aren’t biting
News Source
•Fri, 03 Jul 2026 15:00:33 GMT
📰 What Happened
Australia's housing market is slowing down. First home buyers are pulling back after months of strong demand. Fewer than half of homes listed for auction each week are selling since late May. About 40% of homes are sold before auction now.
Home loan applications dropped 10.9% in May compared to last year. First-timer applications fell even more at 13.4%. A mortgage broker group saw first home loans drop 20% in June. The government's 5% deposit scheme had boosted first-time buyers for months, but rising interest rates are now scaring them off.
🔍 The Backstory
Australia's housing market had been very hot for years. Prices rose quickly and made it hard for young people to buy homes. The government expanded its 5% deposit scheme in October to help first home buyers enter the market. This led to over 10,000 new loans each month.
But the Reserve Bank has raised interest rates three times in a row. Higher rates make mortgages more expensive. Tax reforms are also changing the market. Investor demand is now falling too, except for new properties. This marks a big shift from the boom period.
🎯 Why It Matters
If you are saving to buy your first home, falling prices might sound good. But higher interest rates make loans more costly. This shift could change who gets to own a home in Australia.
Australia's housing market is slowing down. First home buyers are pulling back after months of strong demand. Fewer than half of homes listed for auction each week are selling since late May. About 40% of homes are sold before auction now.
Home loan applications dropped 10.9% in May compared to last year. First-timer applications fell even more at 13.4%. A mortgage broker group saw first home loans drop 20% in June. The government's 5% deposit scheme had boosted first-time buyers for months, but rising interest rates are now scaring them off.
Australia's housing market had been very hot for years. Prices rose quickly and made it hard for young people to buy homes. The government expanded its 5% deposit scheme in October to help first home buyers enter the market. This led to over 10,000 new loans each month.
But the Reserve Bank has raised interest rates three times in a row. Higher rates make mortgages more expensive. Tax reforms are also changing the market. Investor demand is now falling too, except for new properties. This marks a big shift from the boom period.
If you are saving to buy your first home, falling prices might sound good. But higher interest rates make loans more costly. This shift could change who gets to own a home in Australia.