What happened
Canstar analysis reveals that another 25-basis-point rate hike will reduce borrowing capacity for an average Australian worker ($108,650 salary) by an estimated $11,200. Should the cash rate rise to 4.85% following five hikes in 2026, total individual borrowing capacity will have dropped by $58,100, or 11%, since the start of the year.
Why it matters here
Reduced borrowing capacity directly restricts buyer purchasing power, constraining price growth in major property markets like Sydney, where Westpac projects 10% price falls. For property investors, reduced buyer leverage suppresses capital growth prospects while raising serviceability costs on existing variable-rate investment loans.
What to watch
Updated capital city auction clearance rates and Westpac's revised monthly property price indices following the RBA's interest rate decision.
Source
canstar.com.au