{"id":391788,"date":"2026-01-04T21:12:05","date_gmt":"2026-01-04T21:12:05","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/391788\/"},"modified":"2026-01-04T21:12:05","modified_gmt":"2026-01-04T21:12:05","slug":"rate-hikes-to-slow-growth","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/391788\/","title":{"rendered":"Rate hikes to slow growth"},"content":{"rendered":"

Powell said Sydney would probably post stronger rates of growth, but Adelaide, Brisbane and Perth were likely to rise at a more modest pace than before.<\/p>\n

\u201cBut we have the shared equity scheme and the expanded Australian government 5 per cent deposit scheme and that will propel the market,\u201d she said.<\/p>\n

The main headwind in 2026 would be rate hikes, Powell added.<\/p>\n

Eliza Owen, head of Australian research at Cotality, said the market had already shown signs of fatigue as inflation re-accelerated and rate-cut expectations faded. Cotality\u2019s December Home Value Index showed<\/a> house values fell 0.3 per cent in Sydney and 0.1 per cent in Melbourne, the first time since January last year that values in the cities had fallen.<\/p>\n

\u201cIf 2025 was the year that the market was revitalised by rate cuts, then for 2026 it seems obvious that without rate release things are going to become more subdued,\u201d Owen said.<\/p>\n

Loading<\/p>\n

\u201cMajor banks are already revising their outlooks, and two of the big four are forecasting an increase.\u201d<\/p>\n

Final auction clearance rates reached only the high 50s in December \u2013 versus 70 per cent in early spring \u2013 while several high-end Sydney suburbs began to record mild price falls, she said.<\/p>\n

\u201cIf you look at the Sydney housing market, it\u2019s already flat-lining,\u201d Owen said. \u201cAt the end of 2024, the market was looking weak, and that was saved by cash rate reductions, so we\u2019re back there, but housing is about 8 per cent more expensive.<\/p>\n

\u201cI think affordability constraints, rates and consumer sentiment is going to put downward pressure on the property market, and I see that impacting the higher end of the market properties in Sydney above $2.5 million.<\/p>\n

\u201cBut if there\u2019s a bright spot for 2026, it is those cheaper property markets. These will be buoyed by the 5 per cent deposit scheme, and in Sydney and Melbourne that will be markets that are 20 kilometres or more from the CBD.\u201d<\/p>\n

\"First<\/p>\n

First home buyers can get help from government schemes.Credit: Oscar Colman<\/p>\n

Owen said that affordable regional markets \u2013 particularly Far North Queensland and Western Australia \u2013 were likely to rise, driven by investors and rentvesting first-home buyers.<\/p>\n

She added that NSW lending market figures revealed about 10 per cent of new investor loans in the September quarter were to first home buyers \u2013 a trend she expects to continue.<\/p>\n

AMP chief economist Dr Shane Oliver echoed the outlook, saying that without strong migration rates that buoyed the market amid 2023 rate hikes, prices could cool.<\/p>\n

Loading<\/p>\n

\u201cIf rates hold, we could indeed see about 6 per cent property price growth,\u201d Oliver said. \u201cBut if they go up, I wouldn\u2019t at all be surprised if it went negative.<\/p>\n

\u201cThe RBA started raising rates in May of 2022 and property prices initially fell for six months, but when the immigration boom hit, property prices took off again and went to record highs. But this time around I don\u2019t think the property market will be rescued by immigration.\u201d<\/p>\n

Oliver agreed the first home buyer deposit scheme remained a tailwind in the low to mid-market.<\/p>\n

He said if the RBA decided to increase rates, more would probably follow.<\/p>\n

\u201cInterest rates are like cockroaches, where there\u2019s one you\u2019ll always find more,\u201d Oliver said.<\/p>\n","protected":false},"excerpt":{"rendered":"Powell said Sydney would probably post stronger rates of growth, but Adelaide, Brisbane and Perth were likely to…\n","protected":false},"author":2,"featured_media":391789,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":{"0":"post-391788","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-au","9":"tag-australia","10":"tag-business","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/391788","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=391788"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/391788\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/391789"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=391788"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=391788"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=391788"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}