Why Do All Four Major Banks Now Expect Another Rate Rise?
Westpac chief economist Luci Ellis said “a rate hike in November moves back into the base case,” reversing the bank’s earlier view that rates would stay on hold through 2026 and fall in mid-2027 Australian Broker. Westpac pointed to a more resilient household sector and bigger than expected spillovers from the data centre construction boom, which Ellis said will support growth but “limit the pace of disinflation.”
Westpac, CBA and ANZ now expect a 0.25 percentage point rise in November, while NAB still expects the Board to move at its 28 to 29 September meeting. Market pricing for a September rise climbed from around 40% in late August to 54% in the first week of September. A rise of 0.25 percentage points would take the cash rate to 4.60%.
For borrowers on variable rates, the useful planning figure is the repayment at a rate roughly 0.25 percentage points higher than today. Building that into a budget now, or holding the difference in an offset account, gives some breathing room if the forecasts prove right.
| Bank | Next move | Timing |
|---|---|---|
| NAB | +0.25% | September |
| ANZ | +0.25% | November |
| CBA | +0.25% | November |
| Westpac | +0.25% | November |
How Are Households Reacting to the Rate Outlook?
The Westpac-Melbourne Institute Consumer Sentiment Index fell 5.2% to 84.4 in September, led by weaker assessments of family finances Australian Broker. Petrol prices back above $2 a litre and a stronger than expected July inflation read both weighed on the result. The share of consumers expecting mortgage rates to rise over the next year climbed to 64% from 59%, and to 73% among households that already have a mortgage.
The time to buy a dwelling index fell 10.7% to 85.5, and house price expectations eased slightly to 110.3. CBA economists now forecast a national peak-to-trough fall in home prices of around 9%, with Sydney and Melbourne expected to fall furthest. Business conditions in NAB’s monthly survey turned negative for the first time in six years.
What Did the ABS Dwelling Stock Figures Show?
The total value of Australia’s residential dwellings fell $34.1 billion, or 0.3%, to $12.7 trillion in the June quarter, the first quarterly fall since September 2022 Australian Broker. The decline was driven by prices, with the mean dwelling price falling 0.7% to $1.1 million. ABS head of finance statistics Mish Tan said the result “is consistent with recent softening in housing market conditions.”
New South Wales recorded the steepest fall, with the mean price down 2.4% or $32,700, followed by Victoria at 2.1% and the ACT at 1.3%. Every other state and territory recorded a rise over the quarter, and the value of the national dwelling stock remains 8.5% higher than a year earlier.
Why Are Property Investors Selling at a Record Pace?
The Property Investment Professionals of Australia annual survey found 18.3% of investors sold at least one property in the year to August, up from 16.7% and the third straight annual rise Australian Broker. Just over half of those sales went to owner-occupiers, and 12.4% went to first home buyers. The share of investors planning to buy another property fell to 27.8% from 41% a year earlier.
Holding costs were the most common reason for selling, cited by 37.1% of sellers, and 62.3% of investors said their portfolio is now cash flow negative, up from 56%. The negative gearing and capital gains tax reforms have passed into law, with the new treatment applying from 1 July 2027 and properties bought before 12 May 2026 keeping their negative gearing entitlements. PIPA chair Cate Bakos said many investors are selling because “the numbers no longer work for them.” Anyone reviewing an investment property strategy under the new rules is best served by advice from an accountant or registered tax agent, alongside a review of their investment loan structure.
How Did the Spring Auction Season Open?
The first weekend of spring recorded 1,462 capital city auctions, 31.1% fewer than a year earlier, and a preliminary clearance rate of 52.7% Australian Broker. A year ago the same weekend cleared around 70%. Cotality’s Tim Lawless noted it was “the fourth week in a row where the number of auctions held was more than 30% down on year ago levels.”
Results split sharply by city. Sydney reached an 18-week high of 57.7% and Melbourne a four-week high of 58.2%, while Brisbane cleared just 24.8% and Adelaide 34.5%, its lowest result since April 2020.
What Happens to Your Home Loan When Your Bank Changes Hands?
A Queensland-based bank acquired by one of the major banks in 2024 began writing to its 1.2 million customers this week about moving every account, product and digital platform onto its new owner’s systems by June 2027 Australian Broker. Customers do not need to do anything yet and will receive individual guidance before their accounts move. Separately, a foreign-owned bank is exiting Australian home lending, selling its mortgage book to a private equity firm with a non-bank lender managing the loans.
Does an existing home loan change when the bank is taken over or sells its loan book?
The existing loan contract continues, including the rate type, remaining term and any fixed rate period. What can change is the product range you can switch into, the online banking platform, and how the lender handles variations such as top-ups or new splits. A migration is also a common time for scam messages, so any request for details is best checked directly through official channels. It is also a natural point to compare whether your current rate is still competitive.
Key Takeaways
- •Westpac now expects a November rate rise, so all four major banks forecast the cash rate to reach 4.60% this year.
- •Consumer sentiment fell 5.2% to 84.4 in September, and 64% of consumers expect mortgage rates to rise over the next year.
- •The value of Australia’s dwelling stock fell $34.1 billion in the June quarter, the first fall since September 2022.
- •18.3% of surveyed investors sold a property in the year to August, and 62.3% say their portfolio is cash flow negative.
- •Spring auctions opened at a 52.7% clearance rate, with Brisbane at 24.8% and Adelaide at its lowest since April 2020.
- •A Queensland-based bank’s 1.2 million customers will move to its parent’s systems by June 2027, with no action needed yet.