Fourth interest rate hike looms even as analysts predict house prices could fall 10%
News Source
β’Tue, 01 Sep 2026 15:00:02 GMT
π° What Happened
Economists say the Reserve Bank will still raise interest rates a fourth time, even as house prices fall fast. New data from Cotality shows prices dropping in more than 90% of Australian suburbs.
AMP chief economist Shane Oliver says average home values will keep falling for six to nine months. By then, prices nationally could be about 10% lower than their peak. He called that 'the worst in the postwar period'. CBA analysts predict a 12-13% drop in Sydney and Melbourne prices.
π The Backstory
The downturn has been building for a while. Higher borrowing costs, a weak economy, and a once-in-a-generation change to how property investors are taxed have all hit at once.
Past corrections were milder. Falls of around 8% have happened before, most recently in 2022-23. But this time the drop looks wider and faster, which is why analysts are now talking about history-making falls.
π― Why It Matters
House prices affect everyone. Owners watch their biggest asset shrink, while first-time buyers face both cheaper prices and pricier loans. Rate decisions also change how much families pay on their mortgages every month.
Economists say the Reserve Bank will still raise interest rates a fourth time, even as house prices fall fast. New data from Cotality shows prices dropping in more than 90% of Australian suburbs.
AMP chief economist Shane Oliver says average home values will keep falling for six to nine months. By then, prices nationally could be about 10% lower than their peak. He called that 'the worst in the postwar period'. CBA analysts predict a 12-13% drop in Sydney and Melbourne prices.
The downturn has been building for a while. Higher borrowing costs, a weak economy, and a once-in-a-generation change to how property investors are taxed have all hit at once.
Past corrections were milder. Falls of around 8% have happened before, most recently in 2022-23. But this time the drop looks wider and faster, which is why analysts are now talking about history-making falls.
House prices affect everyone. Owners watch their biggest asset shrink, while first-time buyers face both cheaper prices and pricier loans. Rate decisions also change how much families pay on their mortgages every month.