June 2026

Market Update: Interest Rates, property market and CGT Outlook

 
 

Interest Rate Cycle + Forecasts

Major Bank Predictions for 2026

  • CBA forecast:  PAUSE: Economists at the CBA declare the rate-hiking cycle over, predicting a prolonged pause for the remainder of 2026 before eventual rate cuts materialize in 2027.

  • ANZ forecast: STEADY: Reflecting the slowdown in economic data, ANZ aligns with CBA, predicting the RBA will maintain a steady holding pattern without further tightening.

  • NAB pivot: DOWN: Having previously forecast an August hike to 4.60%, NAB's economic team executed an immediate about-face, citing fading economic capacity and indicating that the next cash rate move is officially downward.

  • Westpac variance: TWO MORE INCREASES: Standing as the final hawkish outlier, Westpac preserves an alternate baseline projection of two remaining 25-basis-point hikes in late 2026, targeting a terminal cash rate peak of 4.85%.

  • Cycle context: The Reserve Bank of Australia (RBA) enacted three consecutive 25-basis-point cash rate hikes in the early months of 2026, positioning the official cash rate firmly at 4.35%.

Macro momentum shift: While underlying inflation pressures initially triggered these hikes, June 2026 economic data and commercial business surveys reveal a distinct cooling in GDP momentum.

What This Means For the Homeowner

  • Repayment stabilization: Assuming the RBA maintains a pause at 4.35%, typical homeowners can expect temporary relief from mounting variable-rate monthly obligations.

  • The cost of hawkish paths: If Westpac's extreme 50-basis-point peak projection manifests, it will quickly add over $150 per month in additional out-of-pocket interest costs to a $500,000 principal loan balance.

  • Fixed-rate premium dilemma: For households seeking budget certainty, fixed home loan products across major banks remain priced higher than variable options, reflecting a built-in premium for long-term protection.  The exception is Macquarie Bank, with rates on par with variable rates.

  • Budgeting and cash flow mitigation: We recommend exploring immediate loan reviews, and payment strategies—to help with the family cash flow.  Our first steps to help you, is to haggle/review your current rate.  Then look at competitive lenders to lower your rate. Or even extend you loan term, to reduce current payments  Please contact us directly.

Real Estate Auction Clearance Rates

Nationally

  • Deep cyclical cooling: The combined national weighted preliminary auction clearance rate plummeted to 51.0%, marking the lowest market outcome since April 2020.

  • Macro pressure factors: Industry experts attribute this sharp downswing to back-to-back Reserve Bank of Australia (RBA) cash rate hikes in February and March, combined with restrictive personal tax overhauls in the 2026–27 Federal Budget.

  • Volume surge friction: Total property inventory testing the market grew significantly, with over 3,000 auctions held weekly, a structural 40% increase in supply compared to the identical period last year.

  • Stalling price momentum: As a direct result of falling success rates under the hammer, the national Home Value Index flattened out completely to 0.0%, bringing price appreciation to a sudden halt.

Queensland

  • Extreme clearance correction: Brisbane and greater Queensland auction clearances crashed to a preliminary low of 25.8% to 31.9%, the weakest performance recorded since the initial May 2020 pandemic low.

  • Expectation disconnect: The structural collapse in clearance is largely a localized by-product of severe seller-to-buyer price expectation mismatches.

  • Auction structural traits: Queensland properties have historically traded predominantly by private treaty; the abrupt slowdown under the hammer reflects immediate buyer pushback against highly ambitious auction reserve figures.

  • Underlying value anomaly: Despite terrible auction clearance rates, Queensland's broader housing values grew 0.9% over the month, kept afloat by severe structural housing shortages in the established private treaty market.

New South Wales

  • Sydney leads the downturn: Sydney’s preliminary auction clearance rate hovered near 52.9% to 60.3%, a substantial contraction from the strong 74.0% clearance rate recorded during the same period in 2025.

  • Final clearance realities: Finalized monthly data reveals that once missing results are processed, Sydney’s actual auction success rate drops as low as 46.5% to 49.0%.

  • Rising withdrawal numbers: Demonstrating buyer reticence, vendors are increasingly pulling listings, with approximately one in five Sydney properties completely withdrawn before bidding starts.

  • Correction territory confirmed: Combined with falling clearances, high listing volumes and affordability fatigue caused Sydney home values to slide 0.9%, firmly establishing a short-term housing correction.

    Investor Update: Navigating the 2026 CGT Landscape

  • The Budget bombshell: The 2026–27 Federal Budget delivered radical personal tax adjustments, completely repealing the traditional 50% Capital Gains Tax (CGT) discount for property assets effective 1 July 2027.

  • New indexation rules: Profit calculations will return to a legacy consumer price index (CPI) cost-base indexation layout, designed to tax only the "real" asset profits that exceed structural inflation.

  • The 30% tax floor: Net capital gains earned on asset disposals after the transition deadline will be subject to a strict minimum statutory tax rate of 30%.

  • Hybrid transitional calculations: Multi-property portfolios require immediate accounting partitioning; gains accrued on existing holdings up until 30 June 2027 retain the 50% discount eligibility, while gains post-July 2027 fall under inflation indexing.

  • Pre-1985 asset vulnerability: In an expansive policy clawback, properties acquired prior to 20 September 1985—which previously enjoyed comprehensive CGT immunity—are now integrated into the hybrid CGT framework for future gains.

  1. Negative gearing ring-fencing: Established residential properties purchased after 12 May 2026 can no longer use rental shortfalls to offset standard personal salary income. From 1 July 2027, these passive losses can only be deducted against specific residential rental income and property capital gains.


    Strategy for New Investors

    • Prioritize brand-new builds: To foster housing supply, the government explicitly exempts new construction from the restrictive tax framework.

    • Maintain negative gearing freedom: New investors buying brand-new residential property maintain the traditional right to offset net rental losses seamlessly against salary and wages.

    • Flexibility at point of sale: Investors backing new construction hold a distinct structural edge, maintaining a legal choice at divestment to utilize either the legacy 50% CGT discount or the new CPI-indexed method.

    • Target capital growth corridors: Property portfolios are pivoting away from slowing Sydney and Melbourne hubs. Forward-looking demographic projections from KPMG's Property Outlook highlight Perth (+13%) and Brisbane (+11%) as the premiere 2026 growth zones, fueled by severe local supply shortages.

    Act within the grandfathering window: Established properties firmly contracted prior to 7:30 PM AEST on 12 May 2026 remain permanently grandfathered under legacy negative gearing rules, minimizing immediate structural exposure.

    References:

    Interest Rate & Cash Rate Policy Insights:

  2. Taxation, Budget, & Property Market Updates:

  3. Australian Financial Review (AFR) & AUSTRAC: Tranche 2 Anti-Money Laundering Real Estate Implementation Guidance [1,2,3]

 
 

Financial Freedom Awaits

MVP Loan Solutions -  with the strength of the large mortgage broker aggregator - LMG.  David Youels is a Credit representative 409114 of BLSSA Pty Ltd ACN 117 651 760 (Australian Credit Licence 391237).   MFAA Approved Broker: 53763

 

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