The Reserve Bank of Australia ended 2025 with the cash rate unchanged, keeping a cautious stance. Economic growth is slowing, but persistent housing-driven inflation prevents the Bank from lowering rates.
Despite weaker household demand, key inflation drivers remain stubbornly high:
This creates a dilemma: higher rates lower demand but also limit new housing, delaying relief in the areas the RBA is targeting.
Labour market conditions are softening, but remain strong:
This strength allows the RBA to keep policy tight for longer.
Recently, all four major banks raised at least one term deposit rate. ANZ leads, offering an eight-month term deposit at 4.25%. Banks usually reprice term deposits first when interest rate expectations change, and these moves suggest expectations have shifted quietly.
Markets now expect rate cuts only in late 2026, reflecting the RBA’s caution. Mortgage pressures may stabilise, but real relief is unlikely soon.
November delivered a rare pause in national housing prices, with both house ($940,000) and unit ($710,000) values flat. The stabilisation follows several months of broad-based growth and a strong October that pushed annual house price growth into double digits.
East-Coast Markets Stall Sydney, Melbourne and Canberra are playing it cool, prices held steady in November as buyers got picky. Auctions? Less crowded. The frenzy of mid-2025 feels long gone.
Smaller Capitals Lead Perth, Adelaide and Darwin are tearing it up, jumping 1.1%–1.5% thanks to tight listings and eager buyers. These cities are punching above their weight for national growth.
Regional Markets Regain Momentum Regionals are on a roll, up 1.4% and beating the capitals. With homes scarce, regional sellers in WA, SA and QLD have the upper hand.
New listings fell 20.4% month-on-month, reducing buyer choice heading into the holiday period. While overall supply is marginally higher than late 2024, conditions remain tight.
What to Expect in 2026
Together, these point to a gentle slowdown rather than widespread price declines. Tight housing supply continues to act as a floor under prices.
The new year is the perfect time to review your finances. A quick check—whether for your home loan, investments, or both can set you up for a prosperous 2026.
The Value of a Financial Review
Stay Ahead of Market Shifts – Lending rules, prices, and property values change fast. A review keeps you competitive.
Unlock Savings – Optimising your loans or investments can free up cash, lower repayments, or create new opportunities.
Adjust to Life’s Changes – Update your financial strategy as your goals shift, whether you’re upgrading, investing, or planning.
How HTL Private Office Supports You
Start the Year on the Front Foot
Set your financial strategy for success in 2026. HTL Private Office is ready to conduct a comprehensive financial health check.
📞 Contact us today to begin the year with clarity, confidence and momentum.
Nerida Conisbee, RW Chief Economist, provided data and insights in this update
Vasco Duarte - National Director | HTL Private Office
M +61 403 368 604 E [email protected]
Andrew Bomford - Director | HTL Private Office
M +61 493 862 867 E [email protected]
Matthew Driscoll - Director | HTL Private Office
M +61 422 564 594 E [email protected]
