Key takeaways
The RBA lifted the cash rate by 25 basis points to 4.35% on May 5th - the third consecutive hike this year - in an 8-1 board vote, effectively unwinding the full cycle of rate cuts delivered through 2025.
Governor Michele Bullock signalled the board now has room to pause and monitor how the economy responds, though the door to further hikes hasn't been closed.
CBA economists believe rates will stay on hold for the rest of 2026, while Westpac is still forecasting two more hikes in June and August that would take the cash rate to 4.85%.
The Federal Budget is being handed down tonight (May 12th) and it looks set to be one of the most significant for property investors in many years - with negative gearing potentially abolished for new investments in established properties and the CGT discount likely cut from 50% to somewhere between 25% and 33%.
Importantly, grandfathering provisions are expected to protect existing investors - so if you already own investment property, your position should be secure under these changes.
New housing commitments in the budget include $3.1 billion to build 100,000 new homes and $2 billion for critical housing infrastructure - which tells you the government's primary goal is supply, not simply punishing investors.
Auction clearance rates fell sharply last weekend to 52.5% nationally, down from 57.3% the prior weekend and well below the 63.8% recorded at the same time last year, as buyers paused ahead of the RBA decision and budget uncertainty.
Auction volumes were also softer, reflecting hesitation rather than a fundamental shift - this is the kind of short-term noise that often precedes clearer conditions once the uncertainty passes.
National dwelling values remain 9.1% higher than a year ago, Brisbane is still up 19.8% and Perth 18.6% - the underlying market is not falling apart, sentiment has simply pulled back.
The structural case for Australian property - chronic undersupply, population growth, a decade-long construction deficit - has not changed because of a rate hike or a budget night announcement.
Every week I sit down with the latest property data and try to cut through the noise to find what actually matters for serious investors.
And this week, there is more noise than usual.
The RBA confirmed what most of us expected on May 5th, raising the cash rate by 25 basis points to 4.35% in a split 8-1 board decision - the third consecutive hike this year, effectively reversing all of last year's rate cuts in just a few months.
The RBA left the door open to further rate rises, saying it will "do what it considers necessary" to bring inflation under control, warning there may be "second-round effects" on the economy from rising fuel costs tied to Middle East tensions.
That said, there was a more measured tone from Governor Bullock at the post-meeting press conference. CBA's head of Australian Economics Belinda Allen said guidance from the RBA reinforced the view that policy settings are likely to remain unchanged for the rest of 2026, though risks still sit towards another increase.
Westpac remains the outlier among the major banks. Westpac is the only major bank still forecasting further rate rises, tipping two more 0.25 percentage point hikes in June and August, which would take the cash rate to 4.85%.
Of course, interest rates do not build more houses, fix planning bottlenecks or bring skilled tradespeople back onto building sites, but tonight, we get the Federal Budget - and for property investors, this one matters.
Media reports have revealed the budget will include $3.1 billion to build 100,000 new homes and $2 billion for critical housing infrastructure. Those are meaningful commitments to supply, which is where the real long-term solution to housing affordability sits.
But the more significant news for investors is the likely changes to negative gearing and the capital gains tax discount.
The budget is widely expected to abolish negative gearing for all new investments in established residential properties, while keeping interest deductibility intact for new builds - the government's signal being clear: if you want the tax break, contribute to the supply.
However, it's likely that negative gearing will be grandfathered for those who already own an investment property.
On the CGT side, it's likely that any future property purchases will have capital gains indexed for inflation, rather than benefitting from a 50% reduction. Grandfathering for existing investment properties is expected, which would protect current investors under the current 50% rate.
These changes, if they land as expected, are not the catastrophe some commentators will make them out to be for existing property investors.
If you already own investment-grade properties in the right locations, the fundamental drivers of supply, demand, and interest rates are still expected to dominate market moves, and the impact on prices is expected to be relatively modest.
For those not yet in the market, it does change the calculation - particularly for negatively geared established properties purchased after tonight. I'll report more on this when we know the details.
As for the short-term market reaction, it was already showing up in the weekend auction results.
The months ahead may feel bumpier than we'd like. But the investors who stay focused on quality, location, and a long-term plan - rather than reacting to every budget announcement or rate decision - are the ones who will look back in five years and be glad they didn't blink.
Let me walk you through what the data is showing us this week, city by city.
On the auction front this week... Preliminary clearance rate slips to second lowest result of the year
The preliminary clearance rate dropped to 56.5% last week, marking the second lowest early result recorded this year.
The lowest clearance rate occurred during the Easter long weekend, coming in at 55.5%.
This decline highlights softer auction market conditions compared to recent weeks, with clearance rates struggling to rebound from seasonal and market-related impacts.
See Cotality's full auction report below.
This week, Cotality also reports that:
- Sydney property prices declined -0.1% over the last week, also declined -0.6% over the last month but are 3.9% higher than they were 12 months ago.
- Melbourne property prices declined -0.2%t over the last week, also declined -0.67% over the last month, and increased 1.6% compared to 12 months ago.
- Brisbane property prices increased 0.3% over the last week, increased 1.1% over the last month and are 19.9% higher than they were 12 months ago.
Overall, Australian capital dwelling prices increased 0.1% over the last month and are now 9% higher than they were 12 months ago.
Clearly, the property cycle is moving on but our markets are very fragmented.
Source: Cotality May 11th 2026
Of course, these are "overall" figures - there is not one Sydney or Melbourne or Brisbane property market.
And various segments of each market are performing differently.
At the beginning of this cycle the upper quartile of the market lead the upswing but last year the lower quartile across every capital city recorded a stronger outcome for housing values relative to its upper quartile counterpart.
The following chart shows how various segments of each capital city market are performing differently, with median-priced properties performing well.
To help keep you up-to-date with all that's happening in property, here is my updated weekly analysis of data and charts as of 11th May 2026, provided by SQM Research, Cotality, and realestate.com.au.
Current property asking prices
Property asking prices are a useful leading indicator for housing markets - giving a good indication of what's ahead.
Here is the latest data available:
Sydney
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 2,136.745 | -1.745 | -1.2% | 4.2% |
| All Units | 929.713 | -0.713 | 0.6% | 8.9% |
| Combined | 1,643.279 | -1.471 | -0.8% | 5.0% |
Source: SQM Research
Melbourne
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,341.717 | -2.760 | -0.3% | 4.9% |
| All Units | 682.611 | -0.511 | -0.2% | 8.5% |
| Combined | 1,133.020 | -2.013 | -0.3% | 5.5% |
Source: SQM Research
Brisbane
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,427.068 | 0.493 | -1.7% | 16.0% |
| All Units | 892.530 | -1.840 | -0.6% | 24.9% |
| Combined | 1,291.812 | -0.200 | -1.5% | 17.3% |
Source: SQM Research
Perth
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,320.323 | -1.024 | 0.0% | 17.1% |
| All Units | 801.070 | -0.293 | -1.3% | 24.1% |
| Combined | 1,183.821 | -0.875 | -0.2% | 18.3% |
Source: SQM Research
Adelaide
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,150.807 | 0.293 | 0.7% | 13.5% |
| All Units | 604.552 | 4.948 | -0.5% | 12.1% |
| Combined | 1,053.944 | 1.316 | 0.6% | 13.3% |
Source: SQM Research
Canberra
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,236.895 | -4.227 | -2.5% | 7.5% |
| All Units | 604.552 | 4.948 | -0.5% | 1.2% |
| Combined | 996.686 | -1.105 | -2.1% | 5.5% |
Source: SQM Research
Darwin
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 836.797 | 10.203 | -0.5% | 9.4% |
| All Units | 488.155 | -1.655 | 0.7% | 20.5% |
| Combined | 699.639 | 5.528 | -0.2% | 12.2% |
Source: SQM Research
Hobart
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 915.980 | -2.026 | 1.0% | 8.4% |
| All Units | 536.601 | 1.299 | 4.0% | 6.3% |
| Combined | 857.884 | -1.547 | 1.2% | 8.2% |
Source: SQM Research
National
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,087.697 | -0.166 | -1.2% | 10.8% |
| All Units | 656.951 | 1.011 | 0.1% | 12.8% |
| Combined | 993.925 | 0.038 | -1.0% | 11.0% |
Source: SQM Research
Cap City Average
| Property type | Price ($) | Weekly Change | Monthly Change % | Annual % change |
|---|---|---|---|---|
| All Houses | 1,577.186 | 3.613 | -1.1% | 7.1% |
| All Units | 816.738 | -0.069 | -0.5% | 11.1% |
| Combined | 1,349.160 | 2.389 | -1.0% | 7.7% |
Source: SQM Research
The value of property asking prices as a leading indicator for housing markets is quite significant.
In fact it's more valuable than median prices which can be quite misleading.
Let's delve into why this is the case and how it impacts the real estate market.
- Early Market Sentiment Indicator: Asking prices often reflect the current sentiment of sellers in the real estate market.
If sellers are confident, they might set higher asking prices, anticipating strong demand.
Conversely, if sellers are uncertain or perceive a market downturn, they might lower their asking prices to attract buyers.
This makes asking prices a real-time indicator of market sentiment, often preceding changes in actual sales prices. - Predictive of Future Price Trends: Trends in asking prices can be predictive of where the actual property prices are headed.
For example, a consistent rise in asking prices over a period can signal an upcoming rise in transaction prices. - Impact of Economic Factors: Economic factors such as interest rates, employment rates, and broader economic health influence asking prices.
For instance, changes in the Reserve Bank of Australia's policies or shifts in the job market can quickly reflect in the asking prices, providing insights into how these factors are influencing the housing market. - Regional Variations: In a diverse market like Australia's, asking prices can also provide insights into regional disparities.
For instance, the property markets in Melbourne and Sydney might behave differently from those in Brisbane or Perth. Asking prices can give early indications of these regional trends. - Influence of Supply and Demand: Asking prices are also a response to the balance of supply and demand in the market.
In areas with limited supply and high demand, asking prices tend to be higher and vice versa.
However, it's important to note that while asking prices are a valuable indicator, they should not be used in isolation.
Other factors like actual sales prices, time on the market, auction clearance rates, and economic conditions also play crucial roles in understanding the property market dynamics.
READ MORE: The latest median property prices in Australia’s major cities
- Also read:This week’s Australian Property Market Update – Latest Data, State by State May 12th 2026
- Also read:Melbourne property market forecast for 2026 & 2027 | Why the opportunity is bigger than it looks
- Also read:Sydney property market forecast for 2026 and 2027 | Why the short-term softness is a long-term opportunity
- Also read:Latest Property Price Forecasts Revealed. Australian Property Market Outlook 2026: Where To Now After The Rate Rise.
- Also read:Brisbane Property Market Forecast [2026 & Beyond] – What The Olympics Decade Means for Investors.
Last weekend's auction report
Preliminary clearance rate slips to second lowest result of the year
The preliminary clearance rate dropped to 56.5% last week, marking the second lowest early result recorded this year.
The lowest clearance rate occurred during the Easter long weekend, coming in at 55.5%.
This decline highlights softer auction market conditions compared to recent weeks, with clearance rates struggling to rebound from seasonal and market-related impacts.
Volumes softened, with 2,212 auctions held last week, 13.6% below the previous week.
Relative to a year ago, volumes remained high, with 27.5% more homes going under the hammer than the same week last year.
The higher number of auctions year-on-year is aligned with the overall flow of new listings coming to market, which had also been tracking above 2025 levels.
Melbourne led auction volumes, with 1,078 homes going under the hammer last week, a 15.6% reduction from the previous week but 34.9% higher than the same week last year.
Melbourne's preliminary clearance rate of 57.7% was the lowest reading since the last week of September 2024.
In Sydney, 739 auctions were held, 10.5% fewer than the week prior but 12.7% more than the same week last year.
The preliminary clearance rate fell to 55.2%, the lowest in four weeks, reversing the modest upward trend seen since mid-April.
Brisbane hosted 164 auctions, a 20.4% reduction on the previous week but 53.3% higher than a year ago.
The preliminary clearance rate rose one percentage point, from 52.7% the week prior to 53.7%.
Brisbane's preliminary clearance rate has held below 60% in six of the past seven weeks.
In Adelaide, 106 properties went to auction, down 27.4% on the previous week and 2.8% lower than a year ago.
The preliminary clearance rate, at 67.2%, was 3.2 percentage points higher than the week prior.
Canberra saw 114 auctions, a 16.3% rise on the previous week and more than double the number held a year ago.
Just 48.3% returned a positive result based on collected data so far.
Eleven auctions were held in Perth and none in Tasmania.
Auction volumes are set to ease again this week, with just over 2,000 events currently in the calendar, picking up to approximately 2,350 the following week.
Our rental markets
There is no evidence that the rental market is starting to loosen, with the rental vacancy rate holding at 1.6% across Australia in April, lower in the unit sector (1.5%) and higher for houses (1.7%).
Every capital city recorded a vacancy rate of 1.8% or lower, well below the national average of 2.5% over the decade.
Over the ten years before 2020, the national rental vacancy rate averaged 3.3%.
With vacancy rates remaining low, rents continue to rise, up a further 0.6% in April.
Rents were 5.7% higher over the year, the fastest annual pace of growth since October 2024, adding approximately $38 per week to the national median rent.
In Sydney and Melbourne, as well as Canberra’s unit market, annual rental growth is now outpacing value growth, placing some upward pressure on gross rental yields, albeit from very low levels.
Sydney
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $1,155.44 | 5.55 | 0.1% | 8.7% |
| All Units | $754.20 | -0.20 | 0.1% | 5.7% |
| Combined | $917.01 | 2.19 | 0.1% | 7.3% |
Source: SQM Research
Melbourne
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $811.90 | 2.10 | 0.9% | 6.6% |
| All Units | $598.69 | 1.31 | 0.4% | 5.7% |
| Combined | $688.22 | 1.72 | 0.7% | 6.2% |
Source: SQM Research
Brisbane
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $820.87 | 3.12 | 0.7% | 8.3% |
| All Units | $638.32 | 1.68 | 1.5% | 7.1% |
| Combined | $738.62 | 2.47 | 1.0% | 7.8% |
Source: SQM Research
Perth
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $883.32 | -1.31 | -1.2% | 6.1% |
| All Units | $684.60 | 2.40 | 0.7% | 5.6% |
| Combined | $801.36 | 0.24 | -0.5% | 6.0% |
Source: SQM Research
Adelaide
| Property Type | Rent $) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $685.83 | -6.83 | -1.2% | 3.0% |
| All Units | $558.95 | 3.04 | 2.3% | 8.5% |
| Combined | $643.12 | -3.48 | -0.2% | 4.7% |
Source: SQM Research
Canberra
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $823.54 | 4.47 | 2.4% | 1.3% |
| All Units | $590.89 | -3.88 | -0.9% | 0.8% |
| Combined | $695.48 | -0.23 | 0.8% | 0.9% |
Source: SQM Research
Darwin
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $812.38 | -0.37 | 1.8% | 9.5% |
| All Units | $589.43 | 12.57 | 0.3% | 10.4% |
| Combined | $680.79 | 7.31 | 1.0% | 10.0% |
Source: SQM Research
Hobart
| Property Type | Rent 9$) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $625.41 | -3.42 | 1.6% | 14.2% |
| All Units | $563.92 | 2.09 | -3.7% | 15.7% |
| Combined | $600.92 | -1.21 | -0.5% | 14.8% |
Source: SQM Research
National
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $774.00 | 3.00 | 0.3% | 7.1% |
| All Units | $600.00 | -2.00 | 0.3% | 5.8% |
| Combined | $693.48 | 0.71 | 0.3% | 6.6% |
Source: SQM Research
Cap City Average
| Property Type | Rent ($) | Weekly change | Monthly change | 12 Months change |
|---|---|---|---|---|
| All Houses | $923.00 | 4.00 | 0.3% | 7.5% |
| All Units | $679.00 | 1.00 | 0.2% | 6.1% |
| Combined | $793.47 | 2.44 | 0.3% | 6.9% |
Source: SQM Research
Here's how many properties are for sale at the moment
After tracking at below average levels through most of the year-to-date, the flow of new listings has picked up over the four weeks ending early May.
The rise in freshly advertised stock is likely to be at least partially seasonal, with a flurry of long weekends and public holidays influencing the trend.
Total advertised stock levels are seeing some upwards pressure as the flow of new listings rises and the rate of absorption slows due to less buyer demand.
The rise in total listings is from a low base, with overall stock levels remaining almost 10% below the five-year average in early May.
Vendor metrics
Compared to a year ago, homes are selling faster.
Homes are selling faster, with a median of 27 days on market over the three months ending April 2026, down from 29 days over the same period in 2025.
However, the median selling time has risen through early 2026, reflecting a slowdown in housing demand amid mounting headwinds.
