What happened
PRD’s Australian Economic & Property Report revealed home loan repayments now require 50.9 per cent of average Australian family income. Higher interest rates and larger loan sizes caused national buyer sentiment to drop 8.3 per cent over the year to October 2026, while national home values declined 1.6 per cent from their March peak.
Why it matters here
Excessive debt-servicing ratios leave households with minimal discretionary spending power, slowing broader economic activity. The property market downturn is increasingly split, with softening prices in Sydney and Melbourne slightly improving localized entry affordability, whereas Western Australia and Queensland continue to experience tighter conditions and weaker borrowing capacity.
What to watch
Monitor monthly housing market clearance rates, days on market, and regional median price trends as prospective buyers adjust to elevated interest rate settings.
Source
eliteagent.com