Open Home
On the credit tap that’s quietly closing
The RBA cash rate now sits at 4.35%.
That means standard variable mortgage rates of ~6.26%. (source)
How will these rates impact property prices?
We think property prices are directly correlated to the amount of credit pumped into the system.
More credit = higher prices.
Once credit growth slows (or worse, goes negative) property prices fall.
Just look at the chart below.
It answers the question - why did property prices go up when rates were rising between 2022 and 2025?
Because credit was still growing.
To understand where prices are headed next, we need to know whether the banks are capable (and willing) to fund another debt-fuelled rally.
Here is what the Big Four said this week.
Westpac in its half-yearly report:
Australian housing loans +7% year-on-year, business lending +16%.
But credit impairment charges jumped to A$443M from A$174M in 2H25 (a 155% increase half-on-half).
Total provisions now A$5.2B, with a fresh overlay for energy-intensive sectors. Management language: a “tougher environment for some customers”.
Doesn’t sound good… Westpac
NAB flagged first-half credit impairment charges of around A$706M - sharply higher half-on-half - alongside a A$1.8B DRP equity raise.
NAB’s outlook?
A “challenging environment for customers as elevated volatility and cashflow pressures are likely to persist in 2H26”.
If the banks are raising capital, they’re trying to shore up their books - not grow them… NAB
ANZ took a A$126M collective provision charge, with A$175M specifically for the potential impacts of the Middle East conflict.
ANZ’s outlook?
“expectations of lower growth, higher inflation and interest rates likely to challenge some customers”.
(yikes that’s 3/3 so far) ANZ
We will have to see what CBA says when it reports on Thursday, 14 May. CommBank
Now layer in the tightening lending regulations…
APRA brought in macroprudential limits on high debt-to-income lending from 1 February 2026 - a quiet ceiling on the most-stretched borrower segment. APRA
ASIC’s 2026 enforcement priorities lead with mortgage broker conduct.
Broker fraud cases continue to widen - a Sydney lawyer and a Melbourne accountant are charged, with brokers linked to LMG and Finsure under investigation. The Adviser
(so a crackdown on dodgy loans too - just when people need it the most…)
Three back-to-back hikes layered on top of macroprudential limits, layered on top of bank provisioning, layered on top of an ASIC crackdown on the broker channel that supplied roughly 70% of system credit growth in 2024–25.
Now we wait for the following data releases - 13th May should be interesting…
Prospector’s Corner
The headlines that matter
RBA hiked to 4.35% Tuesday in an 8–1 vote - Bullock called it “a bit restrictive”. RBA →
Variable mortgage rates now average 6.26%; Westpac sharpest at 5.99%. A $600k mortgage just got $272/mo dearer. Australian Broker →
An actual Pentridge prison cell is up for sale. Auction 23 May, $85–90k guide. The 19th-century D-Block bluestone now flogged as boutique wine cellars. Commercial Real Estate →
DigiCo sold its Chicago data centre for US$750M - shares jumped 25%+ on the news. Reuters →
Lin Chen-hai bought Paradise Centre + Novotel Surfers Paradise for A$346M - Queensland’s largest hotel-retail deal. Forbes →
Aware Super listed its A$400M almond orchard portfolio - Trump trade-war winner cashed in. AFR →
Sydney first home buyers paid A$1.3M for an apartment with no parking and no natural light. AFR →
Three iconic Sydney pubs hit the market this week in “a big shake-up”. AFR →
Joye: higher-for-longer. RBA may push past 5% if migration and government spending don’t bend. Livewire →
Shane Oliver (AMP) on Livewire: “Australians aren’t getting ahead - and the Budget might not fix it.” The pre-Budget watch. YouTube →
In the Boardroom
Private market yields vs listed A-REIT yields
QIC sold 350 Eastern Valley Way, Chatswood to a private investor for A$30.5M this week - a fully-leased commercial asset (Fitness First Platinum, lease to 2031). Net yield on the deal: 5.57%. Property Markets News
ASX A-REIT's are trading with yields above 6-7-8 and in some cases even 9% - higher yields with the benefit of ASX liquidity...
What’s an A-REIT? An ASX-listed real estate investment trust that owns and manages commercial property - offices, shopping centres, warehouses, data centres - and pays out most of its rental income as quarterly dividends.
📝 Reply to this email with "ASX REIT" and we will send you a list of all ASX REIT's, their distribution yields and other data like the types of properties the REIT owns, its average lease duration and discount to NTA.
For the Data Nerds
The numbers behind the headlines
Auction Clearance - Week ending 9 May 2026
Domain preliminary, last updated Saturday 9 May 2026.
| City | Clearance | Scheduled | Reported |
|---|---|---|---|
| Sydney | 55% | 1,030 | 583 |
| Melbourne | 56% | 1,051 | 719 |
| Brisbane | 32% | 160 | 98 |
| Adelaide | 56% | 133 | 72 |
| Canberra | 52% | 127 | 97 |
This Week’s Numbers
RBA Cash Rate Decision (Tue 5 May): +25bp to 4.35%, 8–1 vote. Third hike of 2026. RBA
RBA Statement on Monetary Policy (Fri 9 May): Quarterly forecasts updated. Watch the new inflation track. RBA SMP
On the Market
ASX Property Weekly Wrap · 5 – 9 May 2026
REITs
DigiCo (DGT) ▲ +25%+ - sold its Chicago data centre for US$750M; A$360M cash unlocked; LA assets next. Reuters
Banks (the property-credit channel)
Westpac (WBC) ▼ - 1H26 profit up 3% to A$3.4B, but bad-debt charges more than doubled to A$443M. Energy-sector overlay added. Westpac
NAB ▼ - bad-debt charges spiked to ~A$706M; bank raised A$1.8B fresh capital via DRP. NAB
ANZ ▲ - half-year profit A$3.78B; set aside A$175M for Middle East conflict risks. ANZ
Settlement Day
Major deals and M&A
DigiCo sold its Chicago data centre for US$750M to a North American fund manager. LA assets next. Reuters
Lin Chen-hai (Forest Endeavor) bought Paradise Centre + Novotel Surfers Paradise for A$346M - QLD’s largest hotel-retail deal. Forbes
QIC sold 350 Eastern Valley Way Chatswood for A$30.5M at 5.57% yield. Colliers + Knight Frank. Property Markets
Little Projects bought 476–478 High St Prahran off-market for A$12M. CBRE sold; Colliers bought. Commo
Aware Super listed its A$400M almond orchard portfolio. AFR
Solotel (Bruce Solomon) acquired Sydney’s Courthouse Hotel for ~A$24M. AFR
Gateway closed an A$80M Sydney warehouse deal - 39,500 sqm of new industrial supply. AFR
Three iconic Sydney pubs hit the market in “a big shake-up”. AFR
What’s Settling Next Week
Forward look
Key Watch The Budget that may rewrite the property tax base. The lending print that tells you whether the credit cycle is really tightening.
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★ Key Watch Tue 12 May - Federal Budget. Treasurer Chalmers delivers. The CGT discount cut to 33% or 25% (from 50%) is the centrepiece leak; negative-gearing tinkering and Div 296 super both in scope. Property investor base waiting before settling anything. |
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★ Key Watch Wed 13 May - ABS Lending Indicators (March quarter 2026). First major credit print to capture the February + March RBA hikes. Investor lending vs owner-occupier mix the headline number to watch - and the direct read on whether the credit cycle in the Open Home thesis is actually bending. |
Social Media Fix
What the internet is arguing about
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Reddit · r/AusFinance Top threads of the week - the RBA Tuesday wave Tuesday’s 25bp hike to 4.35% kicked the subreddit into peak rate-cycle anxiety mode. Three of the top-five threads of the week are RBA, mortgage stress, or fixed-rate cliff posts - and the comment thread on the Big Four passing the hike on within 48 hours captures what the headline doesn’t: most posters were expecting it, none of them are happy about it. |
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X · @investingLive_ “CBA tips RBA rate hike tomorrow but warns Iran war makes the call harder.” Posted the day before Tuesday’s decision. CBA were the last of the big-four to capitulate on a 25bp call - and they were right. Goldman’s 4.60% peak (per last week’s X card) is now 25bps closer. The Iran-energy variable that Bullock cited as the trigger is still doing the work for the next print. |
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