• The RBA has lifted the cash rate to 4.35%, with major banks passing the rise through from 15 May
• Mortgage stress is rising, with more borrowers reassessing what they can comfortably afford
• Fixed rates are moving higher, as lenders reprice ahead of the next round of rate decisions
• Sydney and Melbourne conditions are softening, creating more room for negotiation in some segments
• Supply constraints and policy uncertainty are continuing to shape buyer, owner and investor behaviour
The property market does not move on one headline. It shifts with a mix of interest rates, lender pricing, supply, demand, and policy settings.
Each week, we look at what is changing across the market and break it down in a way that is easier to understand.
Here is what moved the property market between May 6 and 10, and what it could mean for you if you are buying, refinancing, upgrading or reviewing your home loan.
1. The cash rate has moved higher, and the major banks are passing it on
The RBA confirmed a cash rate of 4.35%, and all four major banks announced they will pass the increase through in full from 15 May. Westpac is moving slightly later, with its change effective 22 May.
That means variable rate borrowers now have only a short window before the higher repayments flow through.
What this means for you:
If you are on a variable rate, your repayments may rise once the new pricing takes effect. Some borrowers may still be able to review their loan, but the time between a rate decision and a lender change is often shorter than it looks.
You might also be interested in: Your guide to variable rate home loans in Australia
2. Fixed rates are being repriced as lenders build in more rate risk
Fixed rates have moved higher again, with major lenders repricing around the expected path for rates. The digest shows two-year fixed rates across the major banks sitting around the mid-6% range, with lenders also adjusting rate lock costs.
What this means for you:
If your fixed term is ending soon, the number you are rolling onto may be materially higher than the rate you locked in last time. For some borrowers, that makes a split loan worth modelling rather than assuming one option will suit every situation.
You might also be interested in: Fixed rates in focus after RBA move, but fewer borrowers rush to lock in
3. Borrowing capacity is still under pressure
Aussie’s own market commentary this week puts a rough number on the effect of rate rises: for every 0.25% increase, borrowing capacity can drop by around $25,000.
That means some buyers who qualified for more in mid-2025 may now be working with a much smaller budget.
What this means for you:
Even if property prices do not move much in the short term, higher rates can still change what you can afford. That is why many buyers and refinancers are checking their numbers again before making a move.
4. The market is still two-speed, with Brisbane and Perth holding up better than Sydney and Melbourne
The latest property data shows a clear split in market performance. Brisbane is up 19.8% annually, and Perth is up 18.6%, while Sydney and Melbourne have softened in the short term, even though values remain higher than a year ago.
National dwelling values are still up 9.1% year on year, and new listings remain below average, which continues to support prices in some areas.
Source: PropertyUpdate
What this means for you:
There is no single “property market”. What is happening in Sydney is not necessarily what is happening in Perth or Brisbane. If you are buying, that means local conditions matter more than broad headlines.
You might also be interested in: Priced out of Sydney? Here’s where the market is actually moving
5. Auction results have softened, which can open negotiation room for buyers
National auction clearance rates have been sitting around the low 50s, and that is creating more negotiation room in some parts of the market. Sydney and Melbourne are seeing the softest conditions, while private sales are becoming more common in several states.
Source: PropertyUpdate, The Shoreline Agency
What this means for you:
If you are buying, lower clearance rates can work in your favour, especially where vendors are realistic on price. Private sales can also change the pace of a deal, so being finance-ready matters.
You might also be interested in: Why falling clearance rates could be the signal investors have been waiting for
6. Budget week is adding another layer of uncertainty for investors
With the Federal Budget due on 12 May, pre-budget reporting suggests major tax settings may change for new property purchases.
The digest points to negative gearing being removed for new purchases and CGT discount reform being replaced by indexation, although the final position is not confirmed until Budget night.
Source: Commonwealth Bank of Australia
What this means for you:
For investors, timing matters. If you are already finance-ready and looking to buy, the week of the Budget is a good time to understand what is still on the table and what may change after the announcement.
7. First home buyer activity is still active, especially where schemes and price caps line up
First home buyers are still showing up in the market, particularly in price bands where government schemes are making the numbers work.
The digest points to strong enquiry in Queensland ahead of the $30,000 grant deadline, while Help to Buy and the First Home Guarantee continue to support demand in eligible markets.
What this means for you:
If you are buying your first home, scheme eligibility and price caps can make a real difference to your options. It is worth checking what support you may be eligible for before you lock in a property search.
You might also be interested in: Queensland’s $30,000 first home buyer grant deadline looms as buyers race the clock
8. Rent pressure is still building, and that is keeping pressure on households
Rental conditions remain tight, with national vacancy at 1.2% and rents up around 44% over five years. The digest also notes capital city rents are now above $700 a week in many markets, while the supply pipeline is still constrained.
Source: Elders Real Estate and API Magazine
What this means for you:
If you are renting, the cost of waiting may be getting harder to absorb. For some households, this may prompt a closer look at whether buying is realistic sooner rather than later.
What to watch in the coming weeks
A few key events are likely to shape the next phase of the market:
The Federal Budget on 12 May
The Big Four’s higher variable repayments taking effect from 15 May
The next RBA meeting on 15-16 June
These updates may affect borrowing power, repayment costs, investor settings, and buyer sentiment.
How this could impact your next step
Property markets can move quickly, but not every update will affect everyone in the same way.
What matters most is understanding how the changes apply to your own situation, whether you are buying, refinancing or reviewing your current home loan.
If you want help working through your options, an Aussie Broker can walk you through what may be available based on your circumstances.
