Buyer’s market expected to take hold following double-digit correction across major property hubs
Australian house prices are likely to keep falling in the coming months, according to REA Group, the owner of mortgage broking franchise group Mortgage Choice. The company says the latest rate rise by the Reserve Bank of Australia (RBA) and tax changes will weigh on buyer demand.
Chief executive Cameron McIntyre (pictured) delivered the warning on Thursday, telling shareholders the near-term outlook now hinges on borrowing costs.
"Interest rates are the biggest factor contributing to market uncertainty at the moment. Further price falls are likely over the coming months as last week's interest rate rise, tax changes and the cumulative impact of higher borrowing costs weigh on buyer demand," McIntyre said.
The comments came nine days after the RBA lifted the cash rate by 25 basis points to 4.6% – its fourth increase of 2026 and the highest level in around 15 years – with policymakers warning of the likelihood of more to come.
Property values were already sliding before the last hike. National dwelling prices fell 0.9% in August, the fifth consecutive monthly decline, according to NAB's September 2026 Housing Monitor.
The latest move has brokers and economists debating whether rates have peaked, with the fourth rise of 2026 already reshaping client conversations and cutting into borrowing capacity.
McIntyre said resilient employment, limited forced selling, homeowner equity buffers and ongoing constrained supply "should put a floor under the falls we see. As interest rates stabilise in the coming months, we expect consumer confidence to improve, and buyer activity to pick up”.
The market had already become more favourable for buyers in the June quarter as national house price growth moderated and vendors continued to list despite proposed federal tax changes, global events and rate increases.
A two-speed market
National new buy listings fell 2% year on year in the September quarter (REA's first quarter of its 2027 financial year). McIntyre said this was in line with the group’s guidance and that listings remain comparable with long-term averages.
But the national figure masks a sharp divide. New listings in Melbourne and Sydney fell 16%, reversing 8% growth in the June quarter. Brisbane, Perth and Adelaide recorded 17% growth for a second consecutive quarter.
"We continue to see a two-speed market with the smaller capitals offsetting the quieter conditions in Melbourne and Sydney in Q1," McIntyre said.
Mortgage Choice volumes up
Despite the bearish market outlook, Mortgage Choice lifted submission volumes 15% and settlements 13% in the 2026 financial year.
The growth fed through to revenue. REA's financial services division, which includes Mortgage Choice and property data arm PropTrack, grew revenue 11% to $114 million.
Momentum eased late in the year. Settlements rose 14% in the first half and 21% in the March quarter before a slower final leg.
Settlements from REA Group-owned realestate.com.au leads rose 30% year on year, which McIntyre credited to upgrades to the portal's finance features.
"Enhancements to the finance experience on our platform supported the delivery of quality leads to Mortgage Choice brokers," he told shareholders.
Technology was the other lever. "Continued investment in our core broking platforms and in AI training and tools, delivered greater value too, with 50% of our brokers now using AI agents to efficiently automate processes," McIntyre said.
Brokers are one of three groups REA's strategy is built around, alongside consumers and its agent customers. The group has also taken Mortgage Choice into commercial lending by buying a 70% stake in boutique brokerage Simplicity Loans & Advisory.
Simplicity's results have been consolidated into REA's accounts from 1 June 2026.
REA will report its first-quarter results in November. The RBA's next cash rate decision is due on 3 November.
