Small Loans Australia

... helping Australians to finance a better future

Small Loans Australia :: News

Share this news item!

Housing Affordability Crisis Hits Home: Insights on the Australian Market

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

In an unexpected turn of events, Australian housing prices have seen a rise over the past two years, despite the Reserve Bank of Australia (RBA) increasing interest rates by 4.25%.

This anomaly has posed significant challenges for prospective homebuyers struggling with rising mortgage costs.

Recent analysis indicates that housing affordability in Australia has reached a critical low, with approximately 47% of a household's gross income now required to service a mortgage. Maree Kilroy, a senior economist at Oxford Economics Australia, emphasized the gravity of the situation, stating, “Housing affordability is currently at its worst level since 2008.”

As prices surged alongside elevated mortgage repayments, many buyers have been pushed towards lower-priced properties, altering the landscape of the housing market. The trend of rising prices has seen a shift, particularly as major cities like Melbourne and Sydney experience declines. As we head into 2025, the forecast remains grim.

The quarterly property survey from the Australian Financial Review has revealed a more measured optimism for the upcoming year, with property experts predicting a modest increase of 3% in residential home prices. This represents a decrease from an anticipated 4.9% rise in 2024, driven largely by a shared concern about dwindling affordability acting as a deterrent to growth.

Many analysts foresee a split scenario for 2025, expecting a dip in values at the year's start, followed by a rebound in the latter half as the RBA is likely to reduce interest rates. Shane Oliver, chief economist at AMP, noted, “Lower interest rates should help from mid-year though to drive a renewed upswing, providing the economy stays out of recession and unemployment only rises to around 4.5%.”

However, not everyone is convinced of a rosy outlook. Jo Masters, chief economist at Barrenjoey, forecasted a continued decline in home values, especially in Sydney and Melbourne. “We expect prices have further to fall in Sydney and Melbourne and soften in other main capital cities over the next six months,” she asserted. Masters echoed concerns over auction clearance rates, indicating that they reflect the current weakness in the housing market.

The broader economic context is pivotal as well. The slowing of net overseas migration combined with recovering stock levels may cause a realignment of the historic relationship between mortgage rates and property values. This trend suggests that unless the RBA eases interest rates, home prices may persist in a downward trajectory, exacerbating the existing affordability crisis.

Experts suggest that the profound decoupling of home values from actual borrowing capacity presents a pressing dilemma for potential buyers. With household income growth lagging, the ability to access affordable housing continues to wane.

As we analyze these market dynamics, it’s clear that the interplay of interest rates, economic stability, and migration patterns will be crucial in shaping the future of the Australian housing market. Should the RBA act to lower rates earlier than projected, it could provide a much-needed lifeline to both buyers and the overall market, translating to improved affordability and access to homeownership.

Overall, understanding these developments is vital for all stakeholders in the property sector, as the path forward remains uncertain amidst an ever-evolving economic landscape. The information presented draws from the latest insights published in the Australian Financial Review.

Published:Tuesday, 7th Jan 2025
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Finance News

Non-Bank Lenders Capture 26% of SME Loan Market

09 Jan 2026: Paige Estritori

In recent years, non-bank lenders have significantly increased their presence in the Australian small and medium-sized enterprise (SME) financing sector. As of early 2025, these lenders account for 26% of smaller loans to SMEs, marking a notable shift in the financial landscape. - read more

Australian SMEs Navigate Cashflow Struggles Amid Cost Increases

09 Jan 2026: Paige Estritori

Australian small and medium-sized enterprises (SMEs) are currently grappling with significant cashflow challenges, primarily driven by rising operational costs. Factors such as increased wages, inflation, and higher interest rates have placed considerable strain on these businesses, affecting their financial stability and growth prospects. - read more

OnDeck Australia Sees Significant Growth in Broker-Originated SME Loans

01 Jan 2026: Paige Estritori

OnDeck Australia has reported a remarkable 246% year-on-year increase in broker-originated small business loans funded in November 2024 compared to the same month in 2023. This substantial growth underscores a renewed confidence among Australian small and medium-sized enterprises (SMEs) in seeking financial support through broker channels. - read more

AFCA Issues Caution to SMEs on Unregulated Lending Practices

01 Jan 2026: Paige Estritori

The Australian Financial Complaints Authority (AFCA) has issued a warning to small businesses regarding the risks associated with engaging unregulated lenders. This caution comes in response to a notable increase in complaints related to lenders not covered by the Credit Act and who are not members of AFCA. - read more

So Money Launches New Lending Solutions for Self-Employed and SMEs

01 Jan 2026: Paige Estritori

In response to Australia's expanding small business sector, non-bank lender So Money has introduced new lending solutions tailored for self-employed borrowers and small and medium-sized enterprises (SMEs). This strategic move aims to simplify the income verification process and provide more flexible financing options to a traditionally underserved market. - read more

Understanding APRA's New Cap on High Debt-to-Income Loans

24 Dec 2025: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has announced a significant policy change aimed at mitigating risks in the housing market. Effective February 2026, APRA will implement a cap on high debt-to-income (DTI) home loans, limiting banks to issuing no more than 20% of new home loans with DTI ratios of six times or higher. This measure applies to both owner-occupier and investor loans, excluding new housing developments. - read more

ASIC's Deep Dive into Private Lending Reveals Industry Shortcomings

24 Dec 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has conducted a comprehensive review of the private lending sector, uncovering several areas of concern. The investigation revealed inconsistent and unclear reporting, downplayed risks, opaque fee structures, conflicts of interest, and poor valuation practices within the industry. - read more

Rising Non-Bank Lenders Draw Attention from Regulators

24 Dec 2025: Paige Estritori

The Australian non-bank lending sector is experiencing significant growth, attracting attention from both the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA). As more Australians turn to non-bank lenders for property loans, concerns about financial stability and regulatory oversight have emerged. - read more

Australian Business Lending Hits Record Highs

16 Dec 2025: Paige Estritori

In a significant development for Australia's financial sector, business lending has reached an unprecedented $925 billion across the nation's top 10 authorised deposit-taking institutions (ADIs) as of July 2025. This milestone underscores a robust appetite for corporate borrowing, reflecting growing economic confidence among businesses. - read more

Click for more Finance News

Personal Loans Articles

Secured Versus Unsecured: Which Loan Option Aligns with Your Financial Goals?

The landscape of personal financing is broad and varied, particularly in the Australian market where individuals have access to an array of loan options. When considering lending, the fundamental distinction to comprehend is that between 'secured' and 'unsecured' loans. - read more

How to Boost Your Credit Score Before Applying for a Personal Loan

Your credit score is a numerical representation of your financial trustworthiness. Lenders use this score to assess the risk of lending you money. - read more

Creating a Financial Safety Net: Insurance and Savings Tips for Young Families

Welcome to our blog! For young families, securing your future often requires careful planning and prudent financial decisions. One of the most crucial steps you can take in this journey is creating a financial safety net. - read more

Budgeting 101: How to Get a Personal Loan Despite Bad Credit

Smart budgeting is the cornerstone of financial health. It helps you understand where your money is going and empowers you to make informed financial decisions. In Australia, like everywhere else, a well-managed budget can significantly improve your quality of life and financial stability. - read more

Bad Credit? Here's How You Can Still Get a Competitive Personal Loan

In the landscape of modern finance, credit scores can often feel like gatekeepers to our goals, barring or granting access to essential funding when we need it most. The truth is, debt is as common as it is complex, threading through the lives of many with silent tenacity. Understanding its prevalence is the first step in navigating the choppy financial waters it can create. - read more

Understanding the Key Differences Between Secured and Unsecured Loans

In simple terms, a loan is an amount of money you borrow from a lender and agree to pay back over time, often with interest. Loans come in various forms and can be tailored to suit different needs, such as buying a home, financing a car, or consolidating debt. - read more

A Beginner's Guide to Personal Loans During Financial Hardship

Welcome to our beginner's guide on personal loans during financial hardship. Navigating financial challenges can be overwhelming, but personal loans could serve as a viable solution. This article will cover what personal loans are, how they work, and why they might be beneficial during tough times. - read more

Avoiding Common Pitfalls in Personal Loan Utilization

Personal loans can be a valuable financial tool when used wisely. They can help you cover unexpected expenses, consolidate debt, or even fund major purchases. However, it's crucial to understand the implications of taking out a personal loan, especially if you have bad credit. - read more

The Smart Borrower's Guide: Understanding Interest Rates on Small Loans

When it comes to borrowing money, whether it's for personal use or for your small business, understanding interest rates is paramount. An interest rate, simply put, is the cost you pay to borrow money. It's typically expressed as a percentage of the principal amount you're loaned. This fee is how lenders earn on the funds they lend and is a key component you should consider before signing a loan agreement. - read more

Need Help Finding a Loan?

All finance quotes are provided free (via our secure server) and without obligation.
We respect your privacy.

Knowledgebase

Dividend:
A distribution of a portion of a company's earnings to its shareholders, usually in the form of cash or additional stock.

This website is owned and operated by Clark Family Pty Ltd (ACN 010 281 008) as Trustee for the Clark Family Trust (ABN 35 957 893 714), 43 Larch Street Tallebudgera QLD 4228. Clark Family Pty Ltd is an Authorised Representative (AR 1298860) of Unique Group Broker Services Pty Ltd (AFSL 509434) for financial product referrals and an Authorised Credit Representative (ACR 401491) of Saccasan Pty Ltd (ACL 386297). Check our licensing details on the ASIC registers: Clark Family Pty Ltd ACR, Clark Family Pty Ltd AR, Saccasan Pty Ltd, Unique Group Broker Services.

IMPORTANT: We do not provide financial product advice or credit assistance. We act solely as an introducer and refer enquiries to licensed third-party intermediaries, insurers, and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for validating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.