April 2026 Property Market Update: A Split Market, Rising Rates & What It Means
The Australian property market is moving in one straight line. Sydney and Melbourne are easing, Brisbane and Perth are still rising, and cheaper homes in our biggest cities are behaving differently again. Rates are higher, oil is pushing up prices, and tax changes for investors are back on the agenda. Let’s break it down and look at what you should consider as a borrower.
Key Takeaways
The property market is splitting by city and price point
Lower-priced homes are outperforming due to demand concentration
Interest rates have risen to 4.10%, with more increases expected
Borrowers are facing higher repayments and cost pressures
Potential tax changes could impact investor demand
Loan structure and preparation are critical in this environment
A Split Market, Not a Crash
Across the country, prices are still edging higher, but the story changes by city and by which part of the market you are dealing in.
Sydney and Melbourne are flattening, and in some areas drifting lower as higher rates and weaker confidence begin to bite
Brisbane and Perth are still rising, supported by low supply, strong migration, and tight rental markets, although growth has eased from last year
While headline numbers look softer in Sydney or Melbourne, the lower end of the market is holding up and in some pockets, rising.
It’s a broader shift we’re seeing across the market. Why?
First home buyer schemes are concentrating demand under specific price caps. In October’s blog update last year, we mentioned how these schemes were likely to drive demand in this sector of the market. History has shown initiatives like these springboard growth, and it’s now happening again.
As borrowing capacity tightens, more buyers are being pushed into lower price brackets.
Investors are shifting toward cheaper, higher-yield properties
More buyers are competing for a smaller pool of “affordable” homes
Recent data from Cotality in April 2026 reinforces this, showing homes below scheme price caps have risen 6.7% on average, compared to 3.6% above the caps.
That’s a meaningful gap and a clear example of how segmented the market has become.
Premium stock is under pressure. But well-located, lower-priced homes remain highly competitive.
Rates up, costs up
The RBA has already lifted the cash rate to 4.10%. This is a response to a fresh inflation shock that was here even before higher oil prices and the conflict in the Middle East.
These higher oil prices are pushing up the cost of petrol, transport and energy. This then feeds through to groceries, construction, and services.
Many forecasters now see inflation heading back towards 5–6% if oil stays high. Markets are pricing in two more rate rises this year, with the next one expected next month.
Some economists advise that there is the potential for even more increases, depending on how things play out for the rest of the year.
On a $750,000 loan:
Rate increases so far this year = ~$200+ per month
Every additional 0.25% = ~$118 per month
And that’s before factoring in higher everyday expenses.
So what can you do?
This is the kind of environment where your loan structure really matters. We’re helping clients to:
● Stress-test repayments at higher rates and you can too, using the calculator below
● Think about fixing your loan or even a split loans (part fixed and part variable). We spoke about the importance of fixing your loan in February’s blog.
● Build offset or redraw buffers while rates stay “higher for longer”.
Tax changes to watch
The Federal Government is again looking at property investor tax settings. Nothing has passed yet, but ideas on the table for the Budget next month include:
● Reducing the Capital Gains Tax (CGT) discount on investment properties.
● Limiting negative gearing by capping the number of properties.
These types of changes could potentially:
● Reduce investor demand
● Put some pressure on prices in investor-heavy pockets.
● Increase rents if fewer investors sell their properties, to avoid paying higher CGT amounts
As a result, if you’re an investor, it is important to understand that tax rules can change, so it makes sense to consider less generous settings in your plan now, rather than relying on today’s rules forever.
Final Thoughts: Simple Moves Matter
While there is a lot to consider from a finance and property perspective at the moment, it doesn’t mean you need to overcomplicate things. The property market is more segmented. Rates are likely to go higher. And uncertainty is elevated. But the practical steps remain the same:
Know your numbers at higher rates - check out our repayment calculator here to run your own numbers on higher rates or have us do them for you
Understand how different state and federal schemes affect your price range
Focus on data to support purchasing quality assets and build sensible buffers
If you’d like to walk through how this affects your purchase plans or your current loan, reach out to the Black and White Finance team.