REA Group has warned that the ensuing borrowing squeeze threatens the housing outlook, as contrasting market signals complicate the picture.
Australian property prices face further declines following the latest cash rate increase, according to REA Group, the digital property business that owns major mortgage broking franchise Mortgage Choice.
Addressing shareholders on Thursday, CEO Cameron McIntyre put interest rates at the centre of the company’s assessment, alongside tax changes and the mounting cost of borrowing.
“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 warning came after the Reserve Bank of Australia (RBA) raised the cash rate by 25 basis points to 4.6 per cent on 29 September, taking the official rate to its highest level since November 2011.
That decision is adding pressure to an already retreating market, with NAB’s September 2026 Housing Monitor showing that national dwelling prices dropped 0.9 per cent in August, extending the run of monthly declines to five.
McIntyre’s outlook was not uniformly pessimistic, however, with the CEO pointing to resilient employment, limited forced selling, home owner equity buffers, and restricted supply as reasons the downturn could be contained.
He said these factors “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”.
Capital city split cushions listings
The geographic imbalance was evident in REA’s September-quarter update, covering the first three months of the financial year 2027.
National new buy listings were 2 per cent lower than a year earlier, with McIntyre characterising that outcome as consistent with guidance, rather than an unexpected deterioration, adding that volumes remained comparable with long-term averages.
Behind the national result, combined listings in Sydney and Melbourne swung from 8 per cent growth in the June quarter to a 16 per cent decline.
Brisbane, Perth, and Adelaide collectively posted another quarter of 17 per cent growth.
McIntyre said activity outside the two largest capitals was helping counterbalance their weaker listing performance.
“We continue to see a two-speed market with the smaller capitals offsetting the quieter conditions in Melbourne and Sydney in Q1,” McIntyre said.
Portal leads bolster Mortgage Choice
The housing warning contrasts with Mortgage Choice’s FY26 expansion, although its annual figures precede the September rate decision.
Loan submission volumes grew 15 per cent, and settlements increased 13 per cent.
Settlement growth nevertheless lost pace in the closing quarter, after increases of 14 per cent in the first half and 21 per cent in the March quarter.
Revenue across REA’s financial services division, which combines Mortgage Choice with property data provider PropTrack, reached $114 million, an 11 per cent increase.
One stronger-performing channel was realestate.com.au, where leads generated settlement growth of 30 per cent year on year, exceeding the franchise’s overall increase.
McIntyre linked that result to changes in the portal’s finance offering, highlighting the connection between REA’s property audience and its broker network.
“Enhancements to the finance experience on our platform supported the delivery of quality leads to Mortgage Choice brokers,” he said.
[Related: Mortgage Choice and Skip release low-deposit home loan]
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