Key takeaways
The RBA's cash rate remains at 4.60%, with its next decision on 3 November as markets reassess the likelihood of another rise.
National auction clearance rates remain below last year's levels, potentially giving some property buyers more room to negotiate.
New home sales fell 17.5% in the September quarter, raising concerns about Australia's future housing supply.
Mortgage stress is rising in some Australian suburbs, highlighting the importance of reviewing home loan repayments.
Australia's property market continues to shift, with changing interest rate expectations, softer auction results and affordability pressures shaping the outlook for buyers and homeowners.
This week, weaker employment figures have prompted markets to reassess the likelihood of another interest rate rise in November.
Meanwhile, auction clearance rates remain below last year's levels, new home sales have slowed, and mortgage stress is rising in some areas.
Whether you're buying your first home, looking to refinance or keeping an eye on property prices, here's what's happening in the Australian property market this week and what it could mean for you.
1. Interest rate outlook shifts after unemployment rises
The Reserve Bank of Australia's (RBA) next interest rate decision is approaching, but recent employment figures have changed expectations about what might happen.
According to the Australian Bureau of Statistics (ABS), Australia's unemployment rate was 4.7% in September 2026, while employment fell by 39,300 people.
The weaker employment figures have prompted financial markets to reassess the likelihood of another interest rate increase in November.
According to Reuters reporting, market pricing on 15 October suggested the probability of a November rate rise had fallen to around 9%, down from approximately 32% before the employment data was released.
However, the outlook remains uncertain. Westpac continues to forecast another 0.25 percentage point increase, while Commonwealth Bank and NAB expect the RBA to keep rates on hold, according to the Australian Associated Press.
The RBA's official cash rate currently sits at 4.60%, with its next decision scheduled for 3 November 2026. The September quarter inflation figures, due on 28 October, could also influence the Board's decision.
What this means for you:
If you have a variable rate home loan, now could be a good time to review your repayments and consider how another rate increase might affect your budget.
An Aussie Broker can help you compare home loan options and check whether your current rate is still competitive.
You might also be interested in: How a rate rise could change what home buyers can afford
2. Auction clearance rates remain below last year's levels
Australian property buyers may be seeing more opportunities to negotiate as auction activity continues to reflect softer market conditions.
According to a weekly auction report, the national auction clearance rate was 46.5% over the weekend, compared with 68.1% during the same period last year.
Results varied across capital cities, with Sydney recording a clearance rate of 58.7%, Melbourne at 56.5%, Brisbane at 19.6% and Adelaide at 31.7%.
The figures suggest that a substantial proportion of properties offered at auction are not selling under the hammer, although individual results can vary depending on location, property type, and buyer demand.
The outlook for property prices has also softened.
According to NAB's September quarter Residential Property Survey, surveyed property professionals expect national house prices to fall by 4.2% over the next 12 months, with South Australia forecast to record a 5.4% decline.
These are forecasts rather than guaranteed outcomes, and local property markets may perform differently.
What this means for you:
If you're looking to buy, softer auction conditions could give you more time to research properties, review comparable sales, and negotiate with sellers.
Getting your home loan pre-approval sorted early can also help you understand your budget before making an offer.
You might also be interested in: How do property auctions work?
3. New home sales fall as construction pressures continue
Australia's new home building sector is facing renewed challenges, with higher borrowing costs and broader economic uncertainty weighing on demand.
According to the Housing Industry Association (HIA), new home sales fell by 17.5% in the September quarter of 2026, reaching their lowest quarterly level in 18 months.
The HIA reported a 26.3% quarterly fall in Queensland and a 7.6% decline in South Australia. The HIA also reported that new home contract cancellations increased to 13.6%.
The decline in sales could affect future construction activity, given the time between signing a building contract and completing a new home.
What this means for you:
If you're planning to build, it's worth understanding how your construction loan works, including progress payments, potential delays, and changes to building costs.
An Aussie Broker can help you explore your finance options and understand what to consider before committing to a build.
You might also be interested in: Could falling premium home prices make it easier to upsize?
4. Mortgage stress rises in some Australian suburbs
Higher home loan repayments are continuing to put pressure on some Australian households.
According to Mortgage Professional Australia, research drawing on Digital Finance Analytics data identified approximately 450,539 mortgage-stressed households across 77 hotspot postcodes.
The report recorded a 7.5% quarterly increase and a 21% rise over the year in the households covered by its analysis, with parts of Melbourne's western suburbs among the areas experiencing significant increases.
Separate Finder survey research found that 23% of surveyed Australians had delayed paying a bill to prioritise their mortgage or rent.
These findings highlight the financial pressures some households are experiencing, although they do not mean every Australian borrower is facing mortgage stress.
What this means for you:
If your home loan repayments are becoming difficult to manage, reviewing your interest rate and loan features could be a useful starting point.
You can also speak with your lender about available hardship assistance if you're struggling to keep up with repayments.
An Aussie Broker can help you review your current home loan and compare options from our panel of lenders.
You might also be interested in: What is mortgage stress and how can you manage it?
5. First home buyers weigh up deposit savings and repayments
The Australian Government 5% Deposit Scheme can help eligible first home buyers purchase a property with a smaller deposit, but it's important to consider the ongoing cost of a home loan.
According to The Adviser, reporting on Primara Research's analysis of ABS data, the average first home buyer loan has reached $610,063, with average loan sizes increasing by approximately $49,800 since the scheme's expansion.
Primara Research estimated that the larger loan amount could add approximately $587 to monthly repayments under the assumptions used in its analysis.
While the scheme can help eligible buyers enter the property market without paying lenders mortgage insurance, a smaller deposit generally means borrowing a larger proportion of the property's value.
What this means for you:
If you're considering buying your first home, it's important to look beyond the deposit and understand what your repayments could be, including if interest rates change.
An Aussie Broker can help you explore your borrowing power, understand your eligibility for the Australian Government 5% Deposit Scheme and find a home loan that suits your circumstances.
You might also be interested in: How a first-home buyer saved $30,000 with a buyer's agent by his side
What to watch in the coming weeks
Several upcoming economic releases and RBA announcements could provide further insight into property market and borrowing conditions:
20 October: ANZ-Roy Morgan Consumer Confidence figures and an RBA speech by Ellis Connolly.
21 October: RBA Deputy Governor Andrew Hauser is scheduled to speak at a Citi conference.
26 October: RBA Assistant Governor Brad Jones is scheduled to participate in the AFR Super and Wealth Summit.
28 October: ABS September quarter Consumer Price Index (CPI) release.
3 November: RBA's next scheduled cash rate decision.
Sources: RBA upcoming events and ABS release calendar.
The upcoming inflation figures and comments from RBA officials may provide further insight into the economic conditions influencing the November interest rate decision.
What could this mean for your next move?
Changing interest rate expectations, softer auction conditions and ongoing affordability pressures are creating different considerations for Australian buyers and homeowners.
For some buyers, lower auction clearance rates may provide more opportunities to negotiate, although conditions will vary between locations.
For existing homeowners, higher borrowing costs could be a reason to review their repayments or explore refinancing options.
Meanwhile, first home buyers may benefit from exploring available government schemes while considering how their deposit size could affect ongoing repayments.
However, property market conditions vary by location, and the right approach will depend on your individual financial circumstances and goals.
Whether you're buying your first home, planning your next move or reviewing your current loan, an Aussie Broker can help you understand your home loan options and compare loans from our panel of lenders.
Book a chat with your local Aussie Broker to explore your next steps.
