In May 2026, the RBA increased the cash rate to 4.35%, the highest level since February 2025. This rise has led to higher mortgage rates, reducing the amount prospective buyers can borrow and increasing monthly repayments.

Real estate agents report a 'levelling out' of the housing market, with some buyers re-evaluating their budgets and delaying purchases due to affordability concerns. Despite this, demand remains strong, indicating resilience in the market.

First home buyers are advised to assess their financial situations carefully, considering potential future rate increases. Exploring fixed-rate mortgage options and seeking professional financial advice can provide stability and clarity in this evolving landscape.