It's the worst-case scenario: you're unable to continue making your mortgage repayments so your lender sells your home to cover the outstanding debt.

Fortunately, the vast majority of homeowners won't ever find themselves in this situation, but with interest rates expected to tick up and rising inflation putting pressure on everyday expenses, it might become a reality for more people.

Nearly 1.5 million mortgage holders were at risk of mortgage stress in the three months to April, Roy Morgan research shows - a figure which is likely to rise if rates keep heading north.

So what actually happens if you fall behind on your home loan? Here's how the process can escalate, and what you can do early to avoid losing your home.

Can going into negative equity put your home at risk?

Owing a bank more than your property is worth (negative equity) isn't ideal - but it's a situation more owners could find themselves in if prices in some parts of the country drop.

Commonwealth Bank's most recent forecast, for one, suggests that home values in Sydney (-6%) and Melbourne (-7%) will fall over the remainder of 2026.

"A buyer who purchased with a 5% deposit at the start of this year has very little buffer against falling property prices," says Sally Tindall, data insights director at Canstar.

"If CBA's forecasts play out, some recent buyers in Melbourne could owe the bank more than their home is worth by the end of the year, despite making their mortgage repayments on time."

The major downside of negative equity is that if you're forced to sell, you'll need to cover any shortfall between your loan and the sale price.

"Negative equity isn't necessarily a crisis if you plan to stay put and keep making repayments, but it can become a major problem if you're forced to sell or want to refinance," Tindall explains.

"If you do find yourself in this position, don't panic. Instead, put your head down and keep your mortgage repayments up."

What should you do if you miss a mortgage payment?

While missing a mortgage repayment isn't recommended, it's not the end of the world.

Plenty of people do it by mistake, though depending on how long it takes to fix it, you may be charged a late payment fee and end up with the missed payment on your credit report.

If you miss a payment because you don't have the money to cover it, lenders recommend contacting them as soon as possible and being upfront about your situation.

There are likely options available says Tom Abourizk, a senior policy officer at the Consumer Action Law Centre, including financial hardship support.

"Don't be afraid to ask for hardship assistance from your bank.

"A long-term deferral of a payment or a waiver of one month's payment might make a big difference, and it's probably in the bank's interest to strongly consider that at the very least."

When does a missed payment become a default?

If you can't rectify one or more missed payments, that's when the formal default process may begin.

"The first step in terms of the legal process is that a default notice will be issued," Abourizk explains.

"Default notices have to quite clearly set out that you're in default of your home loan, how you can fix it, what can happen if you fail to fix it and also provide a timeline for how long you have to fix it.

"I believe the standard is normally 30 days that they must provide at a minimum."

At this point, Abourizk recommends that anyone who receives a default notice considers lodging a dispute with the Australian Financial Complaints Authority (AFCA).

Beyond being able to raise any relevant concerns, repossession (they next potential step) can't go ahead until AFCA's assessed the dispute.

"An ombudsman would go through a process of exploring the options between them [the homeowner] and the bank to see if there is a way for them to retain their house, or at the very least, double-check that the bank is doing everything legally and reasonably."

How does the property repossession process work?

Failing an AFCA resolution or a remedy for the default, that's when a lender can begin the process of repossessing the property.

"To start repossession proceedings, banks generally need to go to court, so that would require formal written notice," Abourizk says.

"The person who receives that notice then has ten days to file an appearance, and they then have 30 days to file a defense if they want to do that."

If the court allows the repossession to go ahead, the lender is then likely to go to the sheriff.

"The sheriff would normally go through a two-step process where they notify the person that they have received the writ and will give them a date that they need to vacate by."

What can you do if you're under mortgage stress?

Repossession is a worst-case scenario. There are actions that homeowners - including those feeling the strain of rising mortgage repayments - can take long before that happens though.

Deb Shroot, a financial counsellor and industry liaison at Financial Counselling Australia, says that the first step for homeowners should be assessing their financial position.

"Work out how much you can afford and the maximum you can afford if rates do go up. Knowing what that amount is can be really useful so that you can quantify and track how you are, versus what you need to pay.

"You could also start either paying extra or putting any excess aside so that you do have a bit of a buffer if things get a bit tight.

"And if your plan includes refinancing, don't wait until you are unable to make your payments before looking at doing it."

Should you prioritise your mortgage over other debts?

Though mortgage repayments may be the largest cost for homeowners, Shroot also reinforces the point that other property-related expenses shouldn't be neglected.

"It's not just your mortgage that's really important, but also your strata and rate payments.

"Strata and rates are bound by either by-laws or legislation, so if you fall behind on these there's not the same flexibility of hardship that's available with commercial loans."

A home loan isn't going to be the only debt some households are paying off either, so how should a mortgage be prioritised?

"It depends on the individual, because everyone's finance ecosystems and value systems are different," Shroot says.

"Housing is a need, however, owning your house is not the only option.

"For example, someone might value continuing to send their child to a private school, so they might sell up and rent, whereas someone else would put their kids in a public school."

How can Australians access financial help?

One bright spot for anyone struggling with mortgage stress is that support is available. That includes hardship assistance from a lender or support from a financial counsellor.

"The options are going to depend on a number of factors, including how much equity you have in your home, how big your repayments are, whether you've accessed hardship before and whether you have other debts.

"So, there's really no one-size-fits-all type of solution," Shroot says.

That's why Shroot recommends reaching out to a financial counsellor who can provide advice which is catered to an individuals' situation, values and priorities.

"Financial counsellors can provide free, independent and confidential advice to help you work through the best options and the next steps forwards for your situation.

"There might also be flow-on consequences from someone's decisions, so we'll be able to discuss the consequences of choosing to pay your mortgage over your rates, or the other way around, and the pros and cons of doing that."

To speak to a financial counsellor you can call the National Debt Helpline on 1800 007 007, or you can find a counsellor in your local area or to fit your specific needs by visiting the National Debt Helpline's find a financial counsellor portal.

Reader question

Hi Paul, I have four adult children but only one still lives in our hometown.

I live on a large block and my daughter and her husband were struggling to afford a house and land package, so I subdivided my block and gifted them a piece of land to build their first home.

Now my other children are upset that I only helped one child. They are asking me to buy each of them a block of land.

Paul, I can't afford land in Sydney or Melbourne. I was proud to be able to help out my daughter. She has stayed close to home in our small town and always lends a hand when I need it.

I am close to retirement and have enough if I am careful, but expensive blocks of land certainly aren't in my budget.

How can I make this right with my other kids even if I can't make it exactly fair? Thank you for your advice. - Pete

Paul's response

Darn. The best time for us to have had this chat, Pete, was before the decision to help your daughter.

It is a real shame, but when it comes to family harmony, money is one of the issues that causes the most disruption, in particular 'early inheritance' gifts.

Few could afford a block of land in Sydney and Melbourne. To be quite frank, I think your children in these big cities are being unreasonable. I can see you want to resolve the situation and I do get fairness when it comes to financial gifts and inheritance.

A good solution may be to look at the value of your gift. You mention you live in a small town; the land you subdivided may not be a big dollar amount.

You could have the subdivided block of land valued at the time of your death, and this value is attributed to your daughter, meaning the other three kids get a larger amount from the estate. Your own financial security in retirement comes first.

Your call. But for me the solution would be to explain the low cost.

I'd also be transparent about the fact that like pretty much every near retiree, the money is not there for capital.

What the other three kids is requesting is unfair.

A block of land subdivided by you is not equivalent to a city block of land. It may be that this can be resolved via your estate; a chat with your solicitor could be very helpful.

What to read next

• Ask Paul: Should we leave our kids unequal inheritances?
• Estate planning and wills: How to protect your assets
• How to plan your countdown to retirement
• Ask Paul: My wife won't stop giving our adult kids handouts
• How to best give away an early inheritance

Buying a strata property can be a minefield, but the biggest risks are often hidden until it's too late.

In NSW, with one-third of all strata developments in Australia, 53% of strata buildings have reported serious defects in common property, according to a 2023 survey by the Office of the Building Commissioner and Strata Community Association of NSW (SCA).

The most prevalent defects are related to waterproofing, fire safety systems, structural issues, building enclosures and, increasingly, building services such as lifts and plumbing.

Mixed-use can quietly drive up your costs

Problems with strata living or investing can be compounded if the strata you buy into is also part of a mixed-use development, for example shops below and apartments above, and is governed by a building management statement (BMS) or a strata management statement (SMS).

These documents regulate shared areas between different entities, setting out how they will be managed and funded.

A building management committee (BMC) is the body responsible for carrying out the rules set out in the SMS or BMS and is made up of representatives from each of the different schemes.

The very nature of a mixed-use complex indicates a plethora of interests, including the residential owners or tenants, the commercial landlords (often the original developers), the commercial tenants, local authorities, customers and visitors, generally, according to legal firm Bannermans, which specialises in construction, strata and property development law.

"The potential for conflicts between these often-competing needs and interests is very real."

Mixed-use developments are becoming more common, says David Glover, managing director of the owners corporation network (OCN).

And the problem with many BMSs is that they are drafted by the developer and registered before residents move in.

Strata jargon, decoded

BMS (Building Management Statement)
Rules for how shared spaces between residential and commercial areas are managed and paid for

SMS (Strata Management Statement)
Similar to a BMS, used in multi-layered strata developments

BMC (Building Management Committee)
The group that makes decisions about shared areas and costs

SCA (Strata Community Association)
Industry body representing strata managers and stakeholders

Why apartment owners often foot the bill

"Decisions made at development approval stage will directly shape the governance, financial sustainability and liveability outcomes for thousands of current and future residents," says Glover.

"Poorly structured or inequitable BMSs create persistent governance and financial problems."

Strata expert Professor Cathy Sherry of Macquarie Law School agrees that mixed-use developments are becoming more prevalent.

In the current, frenzied, simplistic push for high-density development, there has been a marked growth in stratum subdivision, which combines retail, commercial and residential development in large high-rise estates, serviced by complex infrastructure and governed by largely unregulated management statements drafted by developers," said Sherry in an article in The Sydney Morning Herald in February 2024.

Problems are emerging with BMC structures, says Glover.

These include "inequitable distribution of costs, with residential owners often subsidising commercial infrastructure and locked in cost allocation formulas that are difficult or impractical to amend, even when they become clearly unfair".

Other problems that can disadvantage residential owners identified by the OCN include diffuse accountability for shared infrastructure, increasing long-term building deterioration and financial risk for residents, and limited transparency and indirect representation of residential owners who cannot participate directly in BMC decision-making.

"I could never see myself buying into a strata development with a BMC," says Glover.

Watch for these warning signs

• High or rising levies with unclear causes
• Frequent disputes in meeting minutes
• Little mention of defects or repairs
• Complex cost-sharing arrangements

What it is really like to live with a building management committee

I can understand his position from my own experience because I bought into such a development without fully understanding the ramifications.

Mine covers four separate schemes and we all have one vote out of four, yet the residential scheme pays the lion's share of the considerable levies required to run the BMC.

One big frustration of living in shared property is that everything that needs to be done to keep my home liveable seems to take such a long time.

Decisions about many things, from upgrading landscaping or just undertaking necessary repairs to common property, can drag out because of governance deadlocks and disputes between competing interests, sometimes compounded by a lack of regular BMC meetings.

The owners of the apartments, especially those who call them home, generally want their buildings and facilities to be maintained to a certain standard and not have to wait for months or even years for things to be brought up to scratch.

The commercial owners, whose tenants usually occupy their spaces during business hours, don't generally have the same priorities.

Why these arrangements rarely change

The bad news is that these arrangements, usually designed by developers to suit their own commercial purpose, can go on forever, says Glover, sometimes 50-100 years.

They can only be changed by the unanimous agreement of all members or by order of the Supreme Court.

"I know of a strata committee that sought legal advice on the prospects of dismantling a BMC arrangement. It cost them $75,000 just to consider whether it was a good idea or not and they were told they had no prospect of success," says Glover.

He thinks, eventually, that informed consumers may turn away from buildings with BMCs attached, which may spur change.

In the meantime, your best protection, if you are buying into any strata development, is to conduct your own strata search, says Glover. Scrutinise both the minutes of meetings and the notices of meetings for at least three years, he says.

"If something bad is going on, there will be some hints somewhere. If you're not reading anything about building problems, then the owners committee and strata manager are likely hiding something."

Reader question

Hi Paul,

For 40 years, my husband, 71, and I, 69, both retired for two years, have lived in our outer-east Melbourne 1950s weatherboard home on a steep half-acre block.

Over the years we have extended and updated parts of the house, although it still needs some TLC.

We tried selling it in 2023, yet the offers wouldn't cover a new property that didn't need renovations, so we had our house restumped, a roof renovation and a total paint job inside and out, paid for from our superannuation.

The property is still at the low end of the market in an area with a range of low-to-high values.

We looked into subdividing the property, but the cost to put in stormwater through four properties to the outlet as per the council, is too high.

My husband has chronic health issues and finds accessing the yard and even the shower over the bath difficult. We have $400,000 in superannuation and $50,000 in savings.

Should we sell the house and use part of the super to buy a better, turnkey home on a smaller, level block, which may cost more, or stay here and update the bathroom and kitchen?

We don't want to live in a unit, apartment or a retirement village.

I'm worried that we'll run out of super in the years to come, or that we'll expire before the super does. Feeling very torn! - Susan

Paul's response

I'm feeling out of my depth here, Susan. There are some powerful personal feelings about your house. I can tell you have loved it - and still do.

Reading your email, though, I get plenty of clues that the emotional attachment you seem to have is not practical. You tell me about your husband's chronic health issues and how accessing the yard and the shower over the bath is difficult.

The house is on a half-acre, steep block. I wonder how you will be able to maintain this land, let alone an older house.

This is up to a professional real estate agent, but you mention it is in the lower end of property prices, and it has the option to subdivide into four blocks, with costs such as stormwater drainage. I would think this would be attractive to developers.

I also worry that its real value is land value, meaning any extra money you put into it is wasted.

I can only read the words you have sent me, so you need to talk to some decent agents about your sale prospects. Values and saleability may have changed since 2023. My sense, based on broad experience over many decades, is that it may be time for you to move to a more appropriate property, given your husband's health.

I can understand that you do not want to live in a unit, apartment or retirement village; that is a personal choice. But what about a much smaller home on a small, flat block of land. Equally a townhouse might be just the thing for you.

My wife and I are pretty much the same age you are. So it is not just my professional experience with people looking to downsize, it is real life for us.

Many of our friends are going through exactly this, often driven by one partner's health issue. We also know our house will be too big for us in time to come.

Unless an agent tells you differently about spending more on your current home, I am nervous about spending money on more improvements.

But, more importantly, I am worried about you and your husband. You may be able to make the house more liveable today, but is an old house on a huge block right for you as the years go by? I suspect not.

The decision to move is a very big one. It is also emotionally and physically hard as you pack up memories.

I'll tell you from experience one thing that is for sure. You really should move before it becomes too hard due to your age and health. None of this is easy and I wish you both all the best.

What to read next

• How to downsize without losing your identity
• A practical guide to downsizer super contributions
• How to cash in on land values by subdividing
• A beginner's guide to bridging loans
• What a home renovation really costs

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Catriona Graham, financial planner at Bridges Financial Services.

They unpack the real costs, trade-offs and timing of downsizing, and what Australians should weigh up before making the move.

Episode timestamps

00:00 Introduction

01:19 What is downsizing?

02:56 Key benefits and motivations

04:38 Hidden costs and risks

05:50 Downsizer super contributions

07:50 Downsizing and the Age Pension

08:53 The importance of timing

10:33 Lifestyle options and retirement living

11:23 Final tips

Listen to this episode of Friends With Money

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Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

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Rate hikes return, so is it time to switch lenders?

Three consecutive rate hikes have wiped out 2025's rate cuts.

But homeowners don't have to just bear the extra cost.

Yes, you may be able to haggle with your lender for a rate discount.

But for a lower rate rate, it can pay to think about refinancing - especially if you look beyond the big banks.

At the time of writing, some of the best rates across the four major banks include:

• 5.84% - CommBank Digi Home Loan 5.84%
• 5.74% - Westpac online offer - Flexi First Option home loan
• 6.19% - NAB Basic variable rate
• 6.14% - ANZ Simplicity PLUS

If you're prepared to look further afield, you could get rates as low as:

• 5.59% - Pacific Mortgage Group
• 5.59% - Virgin Lite Home Loan
• 5.69% - Greater Bank
• 5.74% Reduce Home Loans

Some of these lenders, such as Reduce Home Loans, also offer a cashback sweetener for refinancers.

Property research group Cotality says that there is potential for further rate hikes ahead.

It could make now the time to see how your home loan rate shapes up.

Mother's Day spending jumps, even with cost pressures rising

Tomorrow, May 10, is Mother's Day, and despite rising living costs (and higher interest rates), Aussie mums look set to be spoiled.

ANZ Bank reveals customer spending remains resilient year-on-year.

In 2025, for example, ANZ customers spent $592 million nationally over the Mother's Day weekend, an increase of 6.6% on 2024.

Dining out proved the most popular way to celebrate, with spending also rising on travel for mums (up 15%), watches and jewellery (up 11.9%), and florists (up 7.81%).

ANZ's managing director of data and analytics, Joanna Gurry, says the data underscores Australians' enduring commitment to celebrating mums.

"Aussies love to spoil mum. Mother's Day remains a key moment on the retail calendar, with customers showing their appreciation through both traditional gifts and shared experiences."

ATO cracks down on dodgy tax tips ahead of June 30

As the clock ticks towards June 30, the Australian Taxation Office (ATO) is warning Australians to be wary of incorrect or misleading information, particularly claims promising greater refunds, shortcuts or hacks.

The ATO reports a rise in tax-related content and 'tips' being shared online.

ATO Assistant Commissioner, Anita Challen, says Australians should "think twice" before acting on information from artificial intelligence (AI) platforms, 'finfluencers', and even family or friends.

"In an environment where misinformation can spread within minutes, it's important to pause and check your tax information before you act on it," says Challen.

"Dodgy tax advice doesn't just mislead - it can also lead to significant penalties."

This tax time, the ATO will focus on areas where taxpayers are likely to make errors including work-related deductions and expenses, and omitted income.

"We understand apportioning expenses can be tricky," says Challen. "But don't fall into the trap of thinking if you intentionally claim a little more than you are entitled to, it'll fly under the radar and that the ATO won't notice."

The ATO is also reminding taxpayers to declare all sources of income including side-hustles, cash jobs, interest and rental income.

Savings hit record highs, but are you missing better rates?

Aussies are thumbing their nose at higher living costs by saving more - not less.

The latest figures from bank regulator - the Australian Prudential Regulation Authority (APRA), show Aussie households have amassed $1729 trillion in savings, up from $1682 trillion in December 2025.

Trouble is, we may not always stash cash in accounts that pay the highest return.

CommBank dominates the savings account market, with around $447,808 million of household savings.

But smaller banks can offer very compelling rates on spare cash.

As at early May, Rabobank is offering a 5.65% bonus rate.

Ubank is paying 5.60%.

ING is paying 5.65%.

These rates can come with strict terms and conditions to earn bonus interest. And some may be introductory offers. But now is the time to shop around and make your money work harder.

Banks on standby to support Aussies facing financial pressure

Over 80% of home loan borrowers are still ahead on their loan repayments and household deposits remain at record levels.

That said, Financial Counselling Australia (FCA) says the May rate hike will intensify financial pressure on households with mortgages who are already struggling.

However, homeowners don't have to suffer in silence.

The Australian Banking Association (ABA) is urging home owners with a mortgage to get in touch with their bank if they need support.

ABA CEO Simon Birmingham says, "Australian banks recognise that this week's interest rate rise will be difficult news for many households.

"You don't have to tough it out on your own - get in touch with your bank."

Depending on individual circumstances, assistance may include:

• Moving to interest-only payments for a period.
• Deferring payments temporarily.
• Restructuring the length of a loan to lower monthly repayments, and
• Providing flexible access to savings and term deposit products to support short-term cash flow needs.

The key is to act fast - certainly before you miss a repayment, which can leave a black mark on your credit record, potentially making it harder to refinance to a lower rate.

Property price growth has started to soften. In some markets, prices are even going backwards, according to Cotality.

National home prices rose just 0.3% in April, but competition is intensifying in the cheapest parts of the market where first home buyers are most active.

Over the course of April, the national median home value edged up by just 0.3% to $940,048, which is the lowest increase recorded by Cotality since January last year.

Melbourne and Sydney are proving to be the largest drags on growth, with property prices in both markets falling by 0.6% in April.

It was a different story in some of the other capitals though. Home values in Perth (up 2.1%), Brisbane (up 1.2%) and Adelaide (up 1.1%) all rose in April, though at lower rates than in previous months.

Interest from buyers also appears to be waning, with Cotality noting that estimated sales are down on previous years while listings are on the rise.

"The housing market was losing momentum from late last year as affordability and serviceability constraints weighed on demand," says Tim Lawless, research director at Cotality.

"Now we have the additional downside pressure of higher interest rates, sentiment has fallen off a cliff, and rising inflation is set to drive the cost of debt even higher."

More buyers are chasing fewer affordable homes

On the face of it, the news that price growth is softening (and even decreasing in some locations) would seem like a welcome development for first home buyers trying to enter the market.

But this isn't necessarily the case.

The growth in home values that is occurring is, according to Cotality, increasingly concentrated in the lowest price quartile - the segment of the market where first-time buyers are most active.

As prices become more expensive and borrowing capacity thanks to rising interest rates, Cotality notes that more buyers are competing for the most-affordable pool of homes.

"The largest difference between upper and lower quartile value growth is in Sydney, where lower-tier house values are up 2.9% year-to-date compared with a 3.3% fall across the most expensive quarter of the market," Lawless explains.

Is the Home Guarantee Scheme pushing up prices?

Last October, the federal government rolled out an expanded Home Guarantee Scheme (HGS) for first home buyers, which included higher property price caps, no income limits and unlimited places.

Six months on and roughly 60,000 people have made use of the expanded scheme to enter the housing market, according to figures from Housing Australia.

While helping thousands get a foot in the door, the scheme also appears to have contributed to a jump in prices at the lower end of the market.

Research released by Cotality last month found that in the six months since the revamped scheme began operating, homes with values under the scheme's price caps have risen by 6.7% - more than double the growth rate of those with values above the caps.

Of course, the redesigned scheme isn't solely responsible for price increases at the lower end of the housing market.

Cotality suggests that affordability and serviceability constraints were already pushing many buyers towards cheaper homes, including a large number of investors who entered the market at the tail end of last year.

Going forward, the impact of the scheme on competition and price growth is likely to lessen, though as Cotality notes, this will be as a result of more homes rising above the existing prices caps and more first-time buyers being constrained by higher interest rates and inflation.

Amid Australia's home building boom, Zeher Khalil has become its most recognisable critic. Founder of Site Inspections and better known as the TikTok Inspector, he roams construction sites in a SWAT-like vest bristling with tools, drones buzzing overhead, calling out defects to an audience of millions. He has catchphrases, merch and a social media following that would make lifestyle influencers jealous. But behind the viral moments is a meticulous operator, calling out bad actors who exploit consumers and chip away at trust in Australia's most cherished asset, the family home.

Australia's home construction industry is, to borrow Zeher Khalil's favourite word, a shemozzle. You wouldn't know it from the paperwork. Compliant. Within tolerance. Approved for handover. Those were the words on the independent inspection report for one of Khalil's own builds, a verdict that should have reassured him. Instead, it left him unsettled.

He had expected scrutiny and to be made to defend his actions, but the bloke was just ticking boxes. "I found myself questioning the findings," he says. "It said the work was compliant, but I thought it hadn't gone hard enough."

For Khalil - a licensed builder with an engineering background - the issue was the lack of accountability. If compliance could be signed off without interrogation, what exactly was being verified? If the inspector was not looking into the detail, who was?

"That's when I realised the inconsistencies and knowledge gaps weren't just happening on building sites," he says. "They were happening during inspections too."

@siteinspections This $900,000 home dropped to just $175K after major defects were uncovered. The certifier approved it without key compliance certificates. The builder lawyered up and sent his own inspector who claimed everything could be fixed for ~$7,000. The insurance company quoted over $80,000 just to cover part of the repairs. Then the council gave the family 30 days to fix it or vacate. We weren't buying it, so we paid the builder a visit and uncovered one of the most shocking property investigations we've ever done. Watch the full story and learn how to protect yourself. #thetiktokinspector #building ♬ original sound - The TikTok Inspector - Site Inspections

Why Australia's building inspections fail buyers

Khalil began to assess every door, nail and waterproofing membrane, and traced each defect he found back to a specific clause in the relevant code or Australian standard.

"I treated it like detective work," he says. "If something was wrong, I wanted the exact why and the exact rule."

Soon after, he qualified as a building inspector - the expert prospective homeowners rely on to identify any faults before they put in an offer to buy. However, it wasn't until he turned the camera on the inspection process, and on himself, that everything changed.

Inside a building inspection with the TikTok Inspector

The drone rises slowly above a half-finished home in Preston, Melbourne's north. From the street, it looks complete. Timber frames are up and the roofline straight. Tiles neatly laid. But from above, something's not quite right.

The TikTok Inspector zooms in. Wedged into the roof structure is a length of timber that doesn't belong - greyed, cracked and visibly aged. The wood appears weathered, inconsistent with the new structural framing surrounding it. Yet the stage had already been signed off by a registered building surveyor.

"You've got to be kidding me," the TikTok Inspector says. "Good from far but far from good."

The footage pans across the site. Nearby, a wooden fence is missing boards.

For the homeowner, who had engaged Khalil for an independent inspection, the moment crystallised a fear that many buyers carry: that the biggest problems in a home are often the ones you can't see.

About 70% of existing homes have building quality problems, according to the Australian Housing and Urban Institute.

In NSW alone, the cost of non-compliant home building is estimated at $700 million per year. Another study of 346 Australian construction projects found that over six years, builders had to redo work 19,605 times to fix defects, costing about 39% of the original contract value.

Why trust is risky when buying a home

For most Australians, a home is the largest financial decision they will ever make, and one largely built on trust. Trust that their home is built to standard and not by rotting wood taken from an old fence out back. Trust that the sign-offs carry meaning.

Khalil had no intention of becoming the TikTok Inspector, only to restore this trust. "None of this was planned," he says. "I had zero intention to build a following or become a public figure."

Social media entered the picture almost by accident when a family member suggested he post videos during the Covid slowdown. Khalil was sceptical. "I thought TikTok was just dancing videos and stuff," he says. "But let's see what happens."

His early posts - voiceovers explaining compliance issues - went largely unnoticed. The information was there but the messenger was not.

"So, one day I thought, let's get uncomfortable," he says. "I turned the camera on myself and explained what I was seeing in my own words."

He uploaded the video and went to bed. "Overnight, the video had tens of thousands of views," he says. "I couldn't believe it."

"The attention was overwhelming. It felt out of control, and honestly, it scared me to the point where I deleted the video," he says.

How TikTok turned inspections into public accountability

The reaction forced him to reflect on something much older than social media.

"I grew up in a family who worked with their hands and took pride in doing things properly," he says.

"There was an unspoken rule in our house: if you're going to do something, do it right, even if it takes more time or effort."

That instinct had shaped his work as a builder. Now, it was shaping something larger. The video took on a life of its own. "I thought the attention was a one-off. But it turned out it wasn't."

Pushback from builders and growing support from homeowners

He kept filming. Each inspection became a form of public documentation, identifying defects, explaining why they mattered, and showing how they could be fixed.

The reaction was immediate, and divided. "There was a lot of criticism - online abuse, trolling, people trying to intimidate me," he says. "I'd never experienced anything like it."

Some of the pushback moved offline.

"There have been many attempts by builders to limit our access to the site," he says. "Some have tried to lock us out. Others have tried to make homeowners sign contracts that exclude me specifically."

@siteinspections A builder tried to stop our inspections and have our video removed. After documenting what happened on a Melbourne job site, an Intervention Order (IVO) was filed against us. The order restricted us from returning to the property and forced the video offline while the matter went before the court. We contested the application. The court has now dismissed the case, confirming that we are free to continue conducting inspections and publishing our reporting. In this video we break down: • What happened when we arrived at the site • Why access to the property was denied • The claims made in the court application • The legal arguments presented in court • And the final outcome of the hearing Our work exists to inform homeowners and raise standards in the building industry. When something goes wrong on a construction site, transparency and accountability matter. Now that the matter has concluded, we can finally share the full story. Watch the inspection that started it all. @The TikTok Inspector @Bastion Legal #siteinspections #tiktokinspector #builders #building ♬ original sound - Site Inspections

Access, however, ultimately sits with the homeowner.

"So long as the homeowner has given the builder a heads-up, the builder isn't legally allowed to deny that access. So, we always get to inspect eventually."

While there was resistance, there was also support. "Homeowners, trades, even people inside the industry were saying, 'Keep going, we need this'."

As the audience and Site Inspections grew, Khalil realised the videos were doing more than attracting attention, they were restoring clarity in an opaque market.

"I treated my camera like a tool to make invisible problems visible and help people understand what they're actually buying," he says. "If I was going to keep filming, it would be to share knowledge. And if attention came from it, that's fine, but it's not the goal."

The tools behind the TikTok Inspector persona

Despite the online persona, Khalil insists the inspections remain the bedrock of the business. His videos come later, often late at night.

"At the end of a long day of inspections, I'd go home, write reports and study. Then, at midnight or later, I'd think, okay, I need to explain this to people," he says.

Much of the early production was improvised. Editing, graphics and voice-overs were self-taught. Some recordings were made in his car, parked in the garage after his four children had gone to bed.

But as time went on and the views and scrutiny snowballed, the operation became more professional.

"Not to chase views, but to make sure what we were putting out was accurate, measured and in the public's interest," he says.

"The inspections drive the content, not the other way around. Social media is a tool. The technical rigour, the standards and the evidence come first."

Khalil does not see himself as an influencer but a part of a correction.

"The goal has always been to build a better system," he says.

Site Inspections is developing educational tools to help homeowners and industry professionals better understand compliance and risk. He expects it to be helping consumers soon.

"If there's a next chapter, I hope it's about moving from highlighting problems to helping the industry solve them at scale," he says. "That's where the real impact is."

What home buyers should do before signing a contract

After inspecting thousands of homes, Khalil's advice to buyers is to not rely on appearances. "Don't rely on how the home looks. Verify what it actually is," he says.

Before signing a contract, ensure the approved plans, the contract and the finished build align. Many of the most serious defects, he says, originate in the gaps between those stages.

"If something doesn't line up or if the answers you get are vague, hit pause," he says. "Asking hard questions early is a lot cheaper than discovering issues after settlement day."

He also warns buyers to pay particular attention to inspection clauses. "Most buyers don't realise that the words 'subject to building inspection' are meaningless if it's not properly defined," he says. "If you don't define what standards apply or what qualifies as a major defect, you're often locked into a dispute after the fact. Get clarity before you sign anything."

Is accountability improving in Australia's building industry?

Khalil is measured about the future. "I do think accountability is improving, but very unevenly."

Builders, he says, anticipating independent scrutiny often adjust behaviour pre-emptively.

"That tells you that accountability responds quickly to visibility."

Regulators have strengthened enforcement in parts of the country. But structural reliance on trust remains.

"Mistakes are always going to happen," he says. "But there's no consistent mechanism catching patterns early."

Until education, verification and accountability align, not only in documentation but on site, he believes defects will continue to surface post handover.

"There's clearer recognition these days that poor workmanship has long-term consequences for consumers and the industry as a whole," he says.

Which brings the story back to paperwork. Compliant. Within tolerance. Approved. These words are supposed to guarantee something. They should be more than a box to tick, they should mean a safe home that shelters the next generation of Australians.

"Anything less is a shemozzle."

The move to expand prefabricated and factory-built modular homes as part of a multi-pronged approach to help solve Australia's seemingly intractable housing affordability problem got a boost, thanks to Bunnings' announcement in February that it would start selling modular pod houses.

The pods and studios are designed for backyards, though every council is different, and permit requirements can vary depending on size, use and location.

Australia's largest hardware and home improvement retailer now lists Elsewhere Pods' flatpack dwellings online and in store as a special order.

There are two models, a small 2.7m x 2.4m pod priced at $26,100 and a larger 4m x 2.4m studio at $42,900.

Bunnings says the units can be assembled in as little as two days, positioning the products as DIY-friendly solutions that can serve as crisis accommodation, home offices or teenage retreats.

How housing supply delays are worsening affordability

One of the biggest factors exacerbating our home affordability crisis is the lack of new supply and the increasing time it takes for standard on-site built homes to be completed.

Australia's national housing target is to build 1.2 million new homes over the five years from July 2024 to June 2029. But we are falling well behind this with the National Housing Supply and Affordability Council (NHSAC) predicting that Australia will miss its 2029 target by about 262,000 homes.

The factors causing this include severe workforce shortages and planning and regulatory delays that have increased the time taken to build a detached house by roughly 34% to 40% since the COVID pandemic.

With apartments it's even worse, with some reports that construction times have increased by up to 80% over the past 15 years.

Why construction costs are still climbing

Rising construction costs, with materials such as timber, steel and concrete jumping more than 40% in price since the start of the pandemic, have added to the woes.

Modular homes currently only make up about 8% of Australia's housing stock, but it's a sector gaining momentum.

"The Australia Prefabricated Construction Market was valued at US$8.35 billion ($11.8 billion) in 2025 and estimated to grow from US$9.01 billion ($12.73 billion) this year to reach US$13.17 billion ($18.60 billion) by 2031, at a compound annual growth rate (CAGR) of 7.88% during the forecast period (2026-2031)," stated a recent report into Australia's prefabricated construction market by market intelligence firm Mordor Intelligence.

"Tight housing supply, persistent skilled-labour shortages, and stricter energy-performance rules under the National Construction Code 2022 are steering developers toward factory-based production lines that compress schedules and curb cost overruns."

Why prefabricated homes can be faster and cheaper

A big advantage of prefabricated homes is that they only take about half the time to build as standard housing, one reason the Australian Federal government is investing $54 million to accelerate the adoption of modular and prefabricated housing.

Prefabricated homes often cost 10% to 25% less per square metre to build compared with traditional homes, according to data from the Housing Industry Association, with savings driven by reduced labour, minimised material waste, and faster, more predictable construction timelines.

Additionally, modular homes are generally of high quality and durable as they are built in a controlled, indoor environment, avoiding weather-related damage to materials, ensuring consistent quality. Many are also energy efficient and sustainable with better insulation, sustainable materials, and in-built off-grid capabilities like solar panels.

Many prefabricated homes can be customised and offer architecturally diverse designs, dispelling the myth that they are unoriginal or boxy.

Who modular homes and granny flats are actually suited to

While these types of secondary dwellings are usually considerably smaller than standard houses, they may indeed suit a large number of people. In Australia, 61% of households consist of one to two people, while three to four bedrooms make up 70% of our housing stock, according to analysis from leading real estate data firm Cotality.

Builders are responding to growing demand for modular homes with a Housing Industry Association (HIA) survey of builders in April 2025 showing that granny flat construction, mostly prefabricated, is set to take off across Australia. Respondents reported that they expected to build 10 times more granny flats this year than they did in 2022.

The origin of the sudden surge in granny flat construction lies in the planning system, says the HIA. NSW was the first State to make it much easier to build granny flats in 2009 and the others have followed, albeit some of them quite slowly.

What could hold prefabricated housing back

One of the problems associated with getting a loan to buy a prefabricated home has been lender hesitancy to come to the party because the home is built in a factory. This means lenders cannot use the building as security until it is installed, making them nervous.

This is being mitigated by the fact that at least one major bank, CommBank, is now offering tailored construction loans that allow for progress payments during the off-site, factory-build phase. Others will likely follow as the sector grows.

Another potentially considerable problem is the cost of transporting factory-built homes, usually on the back of a truck.

Depending on the complexity of the transport and lifting job, moving a home may cost anywhere from $5000 to well over $20,000, eating into cost savings from this type of home.

The Senate Select Committee on the Operation of the Capital Gains Tax Discount handed down its final report on Tuesday after taking evidence from economists, industry groups, unions, academics and members of the public. It held public hearings in Melbourne, Canberra and Sydney across February.

The report found that the concession benefits wealthier Australians most, can skew investment toward existing housing and has helped tilt the market toward investors over owner-occupiers.

While political opinions differ, the broad consensus in submissions favours reforming the rules.

While the Greens chaired the Committee, which included Labor and Coalition senators, the government remains tight-lipped on whether the report will trigger changes.

What is the capital gains tax discount?

Capital gains tax applies to the profit made when you sell an asset.

Any net gain is added to your taxable income and taxed at your marginal rate. Your main residence is generally exempt.

Under current rules, Australian residents who hold an asset for at least 12 months can halve the taxable gain using the CGT discount.

According to the Treasury's 2025-26 Tax Expenditures and Insights Statement, about 830,000 people used the discount in 2022-23.

CGT discount: arguments for and against

The current discount was introduced in 1999 to simplify the system and encourage investment. Since then, housing prices have surged.

The report found the median home price has grown from roughly four to eight times the median income, while only half of 30-34-year-olds own property, down from 57% when the discount was introduced.

Coalition senators Andrew Bragg and Dave Sharma filed dissenting views, arguing the discount supports the supply of rental properties and that inadequate housing supply is the core problem.

"Australians are understandably frustrated by high prices and limited availability," they said in a joint statement. "However, it is misleading and irresponsible to blame the CGT discount for this crisis."

They pointed to Grattan Institute research estimating that increasing CGT could reduce housing construction by up to 10,000 homes over five years to 2030, with the removal of the discount likely cutting property prices by less than 1%.

Separate University of Melbourne research shows removing the CGT discount could push rents up by about 1.3%.

The Committee, however, cited research indicating the current settings do not increase the supply of new housing and therefore do not lift rental supply.

Over the past five years, 92% of investor lending has gone to existing housing, the report said. Only 8% of investor lending has funded new builds, compared with 20% of owner-occupier lending going to new housing.

"Australia's tax system is broken," says Nick McKim, committee chair and Greens senator.

"More and more young people are facing the prospect of never owning their home. Australia is in a nationwide crisis of housing unaffordability which the CGT discount has played a pivotal role in creating."

CGT discount: What could change?

While the Coalition wants no change, others are using the report to push competing models for reform.

The Greens are arguing for the most sweeping overhaul. Their view is that the capital gains tax discount should be wound back across all asset classes so income from owning assets is taxed more like income earned from work.

On housing, they want the discount abolished entirely on investment property sales.

They are also opposed to broad grandfathering, arguing that protecting existing investors for too long would blunt the reform and lock in the same intergenerational inequality the report says the current system worsens.

Independent senator David Pocock is proposing a narrower model.

He wants the CGT discount removed for residential investment properties bought after July 1, while keeping the current rules for properties bought before that date.

He would still allow a 25% discount for newly built homes held for more than three years, in an attempt to direct investor money towards adding supply rather than competing for existing homes.

He has also linked that approach to tighter negative gearing rules on second and subsequent investment properties.

What is grandfathering?

Grandfathering means existing owners keep the old tax rules, while new buyers face the new ones.

So if changes began from July, an investor who bought before that date could still claim the current 50% CGT discount when they sell, while someone buying after that date could not.

It is essentially a way of changing the rules without applying them retrospectively.

Capital gains tax: What is the government's position?

The more politically awkward question is Labor's position.

That is because the report, backed by Labor senators, makes firmer findings than Labor senator Richard Dowling was willing to embrace in his own remarks.

The report says the CGT discount disproportionately favours investors and worsens inequality.

Dowling, by contrast, said the inquiry had merely "heard evidence" about the discount's effects, and stressed that housing outcomes are shaped by many structural factors, with tax policy only one part of a broader housing policy mix.

That is the tension. The report itself reaches strong conclusions about the role of the CGT discount. Dowling stops short of owning those conclusions politically, and instead shifts the focus back to Labor's broader tax and housing agenda.

That is despite Dowling being the deputy chair of the Committee.

All eyes turn to the May Budget

Treasurer Jim Chalmers has also not backed any change to the CGT discount yet, but he has left the door open.

Before the report was released, Chalmers said the government would consider its findings "in the usual way", but made clear that parliamentary committees do not decide tax policy, cabinet does.

He also said the government's policy "hasn't changed in this area" and that any further steps would be a matter for cabinet.

This careful language means Chalmers is not endorsing reform, but he is not shutting it down either.

His most important comment may have been about timing.

"No doubt, the Committee's made a range of findings," Chalmers said in a press conference after the Reserve Bank handed down its latest cash rate decision.

"But when it comes to budgets, they usually finalise closer to May than the middle of March."

In that sense, the report raises the pressure, but the budget is where it counts. If Labor wants to revisit the discount, May is when that choice is most likely to show up.

The average national rent is about $683 a week and climbing 7% year on year. In the capitals it's closer to $779.

Vacancy rates sit at just 1.2%, and rent growth outpaces wages almost everywhere.

If you never buy, the penalty follows you into retirement - renters need roughly $300,000 more in super than homeowners to achieve the same living standard.

But as housing affordability worsens, new layers of technology and middlemen are reshaping the rental market - often in ways that increase risk, cost and control over tenants.

1. Privacy leaks

In the scramble for a rental, tenants are paying with data.

A recent AHURI study found rental application portals can request around 50 separate data points, extending well beyond identity and income into lifestyle-related details gathered through long digital forms.

In NSW alone, the government estimates about 187,000 pieces of identification are collected from renters each week: passports, driver licences, bank statements, payslips and referees' details. That information is often screened against tenancy databases and so-called blacklists.

 

 

 

 

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"Currently, there is no consistent standard for how this highly sensitive information is stored, used or destroyed," says NSW rental commissioner Trina Jones.

Property technology (proptech) is now embedded across the market. AHURI researchers identified 57 rental platforms operating by early 2025, including tools that risk-score tenants, algorithmically "match" applicants to properties and maintain tenancy databases that can shadow renters for years.

"Applicants may be unaware they are being vetted by proptech," says Dr Sophia Maalsen from the University of Sydney.

"How applications are sorted and scored remains opaque, and the weighting of characteristics is unknown, creating a 'black box' effect."

A February investigation by Guardian Australia added fuel to those concerns. A researcher found seven rent-tech platforms exposing personal documents via links that did not require login access.

Some links were "guessable" because they used sequential codes; others could be cached by web crawlers. In one case, opening a single lease generated an authentication cookie that unlocked broader landlord records, including rental history and maintenance files.

States are beginning to respond. NSW has introduced reforms to standardise application forms, curb excessive data collection and require disclosure when listing photos have been digitally altered.

National progress has been slower. In 2023, national cabinet backed plans to simplify rental applications and limit what can be collected, but reforms have yet to be implemented federally.

Many agencies and proptech firms are also exempt from the Privacy Act because their annual turnover falls under $3 million - even as the Office of the Australian Information Commissioner (OAIC) flags the sector as a  "key priority".

What renters can do

Ask what information is mandatory and why.

Request deletion of your documents if your application is unsuccessful.

If your data appears compromised, lodge a complaint with your state regulator or the OAIC.

2. Third-party rent payments

Data isn't the only place renters are feeling squeezed. The way rent itself is collected is also under scrutiny.

Consumer advocates say renters are increasingly being steered towards third-party payment apps, often with fees attached and limited practical alternatives.

In 2024, more than 40% of renters told CHOICE they felt pressured to use a third-party app when applying for a property. Nearly one in three say they've skipped properties altogether because they didn't trust the platforms involved.

On paper, most states require at least one fee-free way to pay rent. But in practice, renters say the free option can be deliberately inconvenient.

One widely used example is Ailo.

Renters can pay by direct debit (with a 0.25% fee) or card (1.5%), while the no-fee method requires setting up manual transfers that do not store payment details.

While that may make the paid option faster and simpler, analysis by The Times suggests renters could pay nearly $500 a year in fees.

Some platforms promote reward points as a sweetener, but the value can be negligible.

In 2021, the Tenants' Union of NSW examined one rewards system and found a year's worth of points could be worth as little as $3.50 to $7 in vouchers or $8.62 if donated to charity. As Barefoot Investor Scott Pape quipped at the time, it could take 69 years for renters to earn enough for a razor.

There are other risks. In Western Australia, Consumer Protection has warned that some third-party rent platforms route payments through intermediaries or overseas banks before the money reaches an agent's trust account.

Under state law, licensed real estate agents must hold rent in protected trust accounts. Third-party platforms are not licensees and are not required to use trust accounts.

If funds go missing before they reach a licensed agent's account, tenants may not be covered by the state's fidelity fund - the last-resort compensation scheme that reimburses losses from fraud or theft involving money held in an agent's trust account.

"Not only have you lost serious protections," the Consumer Protection Commissioner has warned, "but these third-party payment platform providers are generally overseas and if something goes wrong with them, your money is gone."

In NSW, landlords are already required to offer at least one fee-free way to pay rent. Similar protections exist in other states and territories.

The NSW government has now signalled it will strengthen those rules to ensure fee-free options are genuinely convenient, rather than technically available but impractical.

Draft legislation has yet to be released. But if the reforms proceed as flagged, renters could see a return to simpler methods such as direct bank transfers, reducing reliance on app-based payment systems.

What renters can do

Ask in writing what the fee-free payment option is before signing a lease. Consumer Protection advises tenants to read the agreement carefully and clarify how rent must be paid.

Confirm where your money lands: directly into a licensed agent's trust account or via a third-party processor. If platform or card fees are being passed on to you, check with your state regulator whether that complies with local tenancy laws.

3. Embedded networks: locked-in providers

There's another cost many renters don't see until they move in: embedded energy networks.

In many apartment blocks and residential land lease communities, electricity is supplied through a private network. Instead of choosing their own retailer, residents buy power from the site operator, who purchases energy in bulk and on-sells it.

These operators are "exempt sellers", meaning they don't face the same regulatory obligations as licensed energy retailers.

In effect, residents can be locked into a single supplier with limited ability to shop around.

"For too long, people living in apartments, residential land lease communities and other properties with embedded networks have faced challenges that others don't, including a lack of competitive choice and at times, unclear pricing," says NSW fair trading minister Anoulack Chanthivong.

The state's Embedded Network Action Plan aims to align prices more closely with market offers and improve access to dispute resolution and rebates.

But reforms are still unfolding, and protections vary by state.

What renters can do

Before signing a lease, ask whether the property is on an embedded network and how utilities are billed. Details can also be found in strata reports.

Factor energy costs into your rental comparison. If you believe pricing is unfair or unclear, contact your state energy ombudsman or consumer regulator to understand your options.

And while the classic double-brick on a quarter-acre block may no longer be realistic for many buyers, the desire to secure a place of your own hasn't faded. If anything, the urgency has increased.

Perhaps renting has worn thin or living with the parents has run its course. Or maybe you simply want the stability that comes from knowing your housing future isn't determined by a landlord.

But once you begin seriously looking, you quickly realise buying a home comes with its own language, deadlines and emotional highs and lows. There's jargon, paperwork and negotiation, and a whole cast of professionals to consult along the way.

This timeline walks you through each stage, from early research to the moment you collect the keys.

12 months out: Start your research

Before you surrender your Saturday mornings to driving around and viewing homes for sale, the process begins with a cheeky scroll.

You browse listings, track suburb prices, compare commute times and check school zones, often building spreadsheets without meaning to.

You notice which homes linger online and start asking why.

Domain and realestate.com.au remain the main search platforms, while AllHomes and property.com.au broaden your options. These sites offer suburb guides, price trends and calculators that help you balance affordability with lifestyle.

Some buyers also use paid valuation tools, such as Cotality, to get a clearer sense of market value.

This research phase continues throughout your journey. As you learn more about budgets, neighbourhood quirks and your own priorities, your idea of a home that ticks the boxes for you starts to evolve.

9 months out: Get your money in order

This is where the search becomes real. Understanding what you can borrow (and what you can comfortably pay) usually requires expert guidance.

Bianca Patterson, director of Calculated Lending, says first-home buyers should speak to a mortgage broker as soon as they begin thinking seriously about buying.

"Early conversations give buyers clarity around what they can safely afford, what they may need to do to become 'purchase-ready', and which government incentives they might be eligible for," she says.

"We explain how much deposit is needed, help review budgets and build savings plans, highlight financial risks or roadblocks, and guide buyers toward loan structures and features that support their long-term goals."

While mortgage brokers can provide credit assistance and guidance, they don't offer broader financial advice.

That's where a financial adviser comes in. They help buyers understand how a mortgage fits within their long-term financial wellbeing.

"A lot of first-home buyers focus on what the bank will lend them, not what their lifestyle can sustainably support," says Jackson Millan, director of Aureus Financial.

"My role is to show how a mortgage intersects with savings goals, insurance needs and future plans, so they're not overcommitting on day one."

Working with both professionals can be helpful: the adviser sets your financial boundaries, and the broker finds loans that fit within them.

3 months out: Lock in pre-approval

Pre-approval is a lender's early indication of how much they may lend. It's not a guarantee, but it gives you a firm budget and signals to agents that you're serious.

You'll provide payslips, bank statements, ID and a breakdown of expenses. Your broker packages the application to meet lender requirements. Pre-approval typically lasts about 90 days.

Patterson says home buyers should exercise significant caution when it comes to making financial changes after receiving pre-approval.

"Even seemingly minor decisions such as opening a new credit card or interest-free payment facility, taking out a personal loan, using savings for a large one-off purchase, or paying out an existing liability without advice can materially affect their borrowing position," she says.

"The same applies to major changes, including switching jobs, reducing hours, moving from full-time to part-time or casual work, changing industries, becoming a contractor or self-employed, or altering income structures."

8 weeks out: Hit the open homes

With pre-approval sorted, open homes become your weekend routine.

You'll meet real estate agents, skilled negotiators who work for the seller (and not for you) but can still offer helpful local insight.

It's also the right time to shortlist conveyancers who review contracts and manage settlement. Your broker or adviser can usually recommend a few.

6 weeks out: Make an offer

Once you've found the right property, things move fast.

Your conveyancer handles the legal side of transferring ownership and ensures the process runs smoothly. They'll review the contract for potential issues such as easements, unusual clauses or unapproved structures.

Melissa Barlas, founder of Melbourne conveyancing firm Conveyed, says it's worth considering whether you need a conveyancer or a lawyer.

"Both can do conveyancing - the legal work behind making you the property's legal owner," she says.

"But if you need representation, face a dispute or require legal advice, that's where a lawyer is handy."

Barlas says having a lawyer from the start can save thousands because conveyancers aren't qualified or insured to provide legal advice.

"Conveyancers are generally more cost-effective for standard transactions," adds Barlas.

"But many law firms charge similar rates to conveyancing firms. It really depends on the expertise you need and who you feel comfortable with for the transaction."

At this stage, your broker reconfirms your borrowing capacity and you submit your offer. In competitive markets, expect counter-offers.

If accepted, you'll pay a small holding deposit.

2 weeks out: Prepare for settlement

Settlement preparation involves signing loan documents, organising building insurance and confirming your funds.

Your conveyancer coordinates with your lender, the vendor's lawyer and the settlement platform to ensure everything is ready.

A pre-settlement inspection, usually 24-48 hours beforehand, lets you confirm the home is exactly as agreed.

Check appliances, ensure repairs have been completed and make sure all keys, remotes and fixtures are still in place.

You'll also need to cover several additional fees, including the loan application fee, mortgage registration fee, transfer fee and any outstanding council and water rates linked to the property.

Settlement day

Settlement day is when the handover happens. Your lender transfers the funds, the property title is registered in your name and the home legally becomes yours. Your conveyancer manages the entire process. Once complete, the agent hands over the keys.

For the conveyancer, lender and agent, it's routine paperwork. For you it's one of the biggest emotional and financial milestones of your life.

Broker or banker?

For generations, home buyers paid a visit to their local bank to arrange their home loan.

Today, the landscape has shifted with nearly 80% of Australian home loans processed through mortgage brokers.

Patterson says one of the biggest first-home buyer misconceptions is that going straight to your existing bank is easier or that loyalty secures a better deal.

"A bank can only offer their own products and policies. Brokers, however, can compare multiple lenders and must act in your best interests by law."

This broader view can make a meaningful difference to first-home buyers.

"Not all lenders participate in schemes like the First Home Guarantee," she says, "If you walk into the wrong bank, you might end up paying lenders mortgage insurance unnecessarily when another lender could have waived it."

Settling in

Move-in day is when the property finally becomes your home. Over the first few weeks, you'll discover its quirks - the morning light, the hot water temperament, the friendly (or noisy) neighbours.

Your adviser may check in to guide you on the next steps in your financial journey, while your broker can help set up offset accounts, arrange extra repayments or discuss refinancing strategies.

"Buying the property is one milestone," says Patterson. "Managing the loan well is the next."

Buyers agents?

At this point, buying a home can feel overwhelming, especially when dealing with seasoned real estate agents whose job it is to secure the highest price for the seller.

"They know the tricks, the psychology and the pressure points to help get the vendor the highest possible price," says Mark Mendel, co-founder of buyers agency Moove.

That's where a buyers agent can help. Their role is to represent the buyer's interests: researching properties, assessing value, negotiating with agents and helping to avoid costly mistakes.

They can also bid at auctions and provide advice on strategy, which is particularly useful in competitive markets or for buyers short on time or buying interstate.

Fees typically range from 1.5% to 2.5% of the purchase price, though some agencies offer flat-fee packages.

Many of our friends are at the same stage. Kids finishing uni, getting decent jobs and suddenly facing the notion that three bricks and a patch of concrete in a capital city cost roughly the GDP of a small island nation.

It has become the new barbecue conversation. Used to be: 'How's work?' or 'Did you see the game?' Now it's: 'Mate, how are you planning to get your kids into the housing market?'

And everyone nods knowingly, swaps horror stories about suburban auctions, talks about the Bank of Mum and Dad, then stares at the sausages like they're the last affordable real estate left on earth.

This is the housing doom loop.

The doom loop works like this: every news headline becomes proof that the market is hostile. Every weekend inspection becomes proof that you're 'too late'. Every rent rise becomes proof that the system hates you.

Eventually, the brain stops looking at options and starts narrating the world. The story becomes, 'It's impossible'.

And once you believe that story, the financial game is already over. Not because of reality, but because you stopped playing.

There is a term for this type of thinking, learned helplessness. This is the psychological phenomenon where repeated failures train you to stop trying, even when new opportunities appear.

Housing is a perfect breeding ground for learned helplessness. A few years of being outbid, underpaid or insulted with mortgage calculators can make the brain go, 'Right, I get it. I'm destined to be a nomadic renter until I crumble into dust'.

But the housing market isn't conspiring against you, it's just moving. And like every big system, it has pockets of opportunity, but those pockets are invisible to anyone stuck in the doom loop.

Read between the lines

The truth is that Australia doesn't have a single housing market. We have thousands of little ones.

A studio apartment in Arundel, Queensland, isn't the same as a townhouse in Ballarat or a three-bedder in Perth.

But we compress all of them into one headline: HOUSE PRICES AT ALL-TIME HIGH.

That simplification feels intellectually tidy. It gives us a villain. It also makes us a little financially blind.

The other trick the doom loop plays involves time. Markets are reported in quarters; lives are lived in decades.

Nobody says, 'Over a 30-year horizon, interest rates will fluctuate, asset cycles will correct, yields will expand and contract, and affordability will be elastic based on cohort behaviour'. They say, 'The market's cooked, mate'.

And the sausages nod.

But there is hope. If the goal feels too far away or unreachable, simply shift the time horizon closer.

•  Can't afford the dream suburb? Look at a suburb a few postcodes away.
•  Can't afford a house? Look at a unit.
•  Can't afford ownership? Build a renter profile that maximises flexibility and savings.
•  Can't think 10 years ahead? Focus on the next $5000 saved.
•  Can't face the whole mortgage? Build an emergency buffer first.

When the goal is emotionally reachable, motivation returns.

And, of course, we all need to stop comparing our children's situation to our friends' kids who might be ahead of the game.

This is social proximity bias: we elevate the achievements of the people most like us, then punish ourselves for not matching them. Your financial path isn't their path. Their timing isn't your timing. Their leverage isn't your leverage.

Housing is, without question, emotionally loaded. But the doom loop only has power if you hand it the pen and let it narrate your future.

Fight the story first, not the suburb. Every meaningful financial journey begins the same way: one decision, one habit, one step, repeated. Even if the barbecue guests roll their eyes.

Three ways to escape the doom loop 

The good news is that there are ways to challenge this type of thinking. Becoming unstuck from the doom loop and changing the conversation can help rewrite the narrative and open our eyes to new opportunities.

1. Build optionality, not fantasy

Rentvesting isn't surrender, it's strategy. Smart investors look for yield, not prestige. Pride is expensive; return on investment isn't.

2. Automate movement

Waiting until you feel ready to save is like waiting until you feel fit enough to go to the gym. The hack is automation. If $100 a week disappears into a housing account before you see it, you've created identity momentum, even when the headlines scream doom.

3. Recognise the emotional tax

Buying property is an ego gauntlet. Shame, envy, imposter syndrome and FOMO are the big ones. You'll make worse decisions if you pretend those feelings aren't there. People often overstretch out of pride. A house is a shelter and an asset; both lose value if you collapse under the weight of the mortgage.

This week on the Friends with Money podcast, Vanessa Walker, managing editor of Money, and journalist Ryan Johnson dive deep into the home-buying process for first-time buyers.

They discuss the essential steps from initial research, engaging with mortgage brokers and financial advisors, 
to pre-approval, making offers, and the final settlement. Get practical tips for navigating real estate websites, understanding mortgage pre-approval, and the importance of conveyancers.

00:20 First steps for first-time home buyers

01:38 Researching and narrowing down your options

03:05 Engaging with professionals: Mortgage brokers and financial advisors

05:42 Understanding mortgage pre-approval 07:51 Making an offer and preparing for settlement

10:25 Settlement day and moving in

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Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

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Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

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Records tumble as first homebuyers cash in on expanded Home Guarantee

First home buyers have piled back into the market after the Home Guarantee Scheme was uncapped, with the value of new loans jumping 15.5% in the December quarter. Fresh ABS figures show first home buyers borrowed $19.3 billion over the final three months of 2025 - the second-highest result on record.

Loan numbers rose 6.8% over the quarter. That's the strongest level since March 2022, but still well below the June 2009 peak of 49,499 loans when first homebuyer grants were expanded.

NSW saw the biggest rise in first home buyer activity, followed by WA and the ACT.

It wasn't just first timers. Total new home loans hit a record $108 billion for the quarter. Investors also stepped up, borrowing $43 billion (up 7.9%), another record.

However, that sentiment may change as calls for the capital gains tax discount to be scrapped are louder than ever.

The bigger story for many households is the size of the debt.

The average new owner-occupier loan climbed to a record $736,000, up $42,000 in just three months - about $457 extra borrowing each day.

In NSW, the average loan reached $873,000. WA recorded the fastest growth, rising $55,000 or 9% to $688,000.

Refinancing stayed strong too.

Even though switching numbers slipped 0.4%, borrowers moved more than $68 billion worth of loans to new lenders during the quarter as rate changes kept people checking their deals.

Super tax overhaul incoming

Labor is again trying to reshape the super system, this time pairing a tax break for low-income workers with higher taxes on very large balances.

Treasurer Jim Chalmers has introduced the Better Targeted Superannuation Concessions Bill, arguing it will make the system "fairer and more sustainable".

Under the proposal, people with super balances between $3m and $10m would pay 30% tax on earnings in that portion of their account, up from the current 15%. Balances above $10m would face a 40% rate.

About 90,000 people, or 0.3% of super account holders, would be affected.,

At the other end of the scale, the government plans to lift the income threshold for the low-income super tax offset (LISTO) from $37,000 to $45,000.

LISTO refunds the 15% tax paid on concessional super contributions so low earners are not penalised for putting money into super.

Raising the threshold would extend the benefit to an extra 1.3 million workers.

The government's previous attempt at super changes stalled after criticism that it would tax unrealised gains and was not indexed, meaning more Australians could be swept up over time. Those elements have been dropped from the new Bill.

The proposal now faces Parliament, where it is likely to trigger fresh debate over how generous super tax breaks should be and who should benefit most.

Aussie drivers stall on servicing and repairs in 2026

Nearly half of Australian drivers are putting off car servicing as household budgets tighten.

New research from iSelect found 49% of drivers have delayed a scheduled service.

About 23% are up to three months overdue, 12% are four to six months behind and 9% admit they are more than six months past the manufacturer's recommended service date.

To save money, many are ignoring smaller problems. Air-conditioning faults topped the list, followed by cracked windscreens and damaged side mirrors.

Some drivers also admitted putting off fixing worn tyres, dashboard warning lights and broken brake lights or headlights.

iSelect comparison expert Sophie Ryan says that's a risky trade-off.

"Vehicle safety is becoming another casualty of cost-of-living pressures," she says. "Issues like a cracked windscreen or faulty air-conditioning might seem minor, but they can get worse over time and cost more to repair."

Skipping a service can also have longer-term consequences.

Car makers set service intervals to catch problems early and check essentials such as tyres, fluid levels and the battery. Missing those appointments could void a new car warranty.

There's an insurance risk, too. If a car is found to be unroadworthy after an accident, an insurer may refuse a claim.

Bulk billing rates rise

Bulk-billing rates have lifted for the first time in months, following the government's $8.5 billion investment in Medicare.

New figures show the national bulk-billing rate rose to 81.4% between November and January, up from 77.6% in the previous quarter. It marks the largest quarterly rise in 20 years outside the pandemic period.

The increase follows the expansion of bulk-billing incentives to all patients from November, fulfilling a promise set out in last year's budget.

Previously, higher incentives applied mainly to children and concession card holders. Since changes in 2023, more than 90% of GP visits for those groups are bulk billed.

The government says more than 3400 practices are now registered as Medicare bulk-billing clinics, with about 1300 switching from mixed billing in recent months.

It estimates 96% of Australians live within a 20-minute drive of one, though some critics are sceptical of this number.

Health Minister Mark Butler says the shift shows incentives are working. However, some GPs remain cautious about whether payments will keep pace with rising practice costs.

Separately, the government will introduce legislation aimed at improving transparency in private healthcare.

If passed, it would require Medicare and private health insurers to upload specialist fees and out-of-pocket costs to the Medical Costs Finder website.

The Bill would also ban "phoenixing", where insurers close an existing policy and reopen a near-identical product at a higher price.

Aussies shop after dark

Late-night scrolling is turning into late-night spending for many Australians, and it's not always ending well.

New research from PayPal shows 79% of Australians have shopped online between 9pm and 5am. Nearly one in four say they do it at least monthly.

The Bedtime Browsing Report suggests fatigue is shaping what and how we buy.

About one in four late-night shoppers say they are more likely to make impulse purchases after dark. One in five spend more than planned.

Some 18% regret what they bought, while 16% have received parcels they forgot ordering.

There's also a scam risk. One in eight shoppers (12%) admit clicking a suspicious link late at night and 11% say they have landed on a fake website.

Most respondents (83%) believe tiredness makes it easier to miss red flags or small print.

Danielle Grant, consumer shopping expert at PayPal Australia, says late-night browsing has become a form of "me time" after long days, but judgment can slip when people are exhausted.

Her tip: pause before you pay.

Double-check website addresses, avoid rushing through checkout and use secure payment options. A few extra seconds could prevent an expensive mistake.

A Greens-led Senate inquiry, established in November and due to report by March, has reopened the debate, drawing sharply divided submissions from across the housing, finance and community sectors.

Fuel has been added by new figures from the Parliamentary Budget Office, which estimate the CGT discount will cost the budget $247 billion over the next decade.

The same analysis suggests the richest 1% of Australians will receive about 59% of the benefit this year, while people under 35 receive roughly 4%.

With Labor's housing agenda under pressure and affordability worsening, scrutiny is mounting on Treasurer Jim Chalmers ahead of the May Budget.

So, what exactly is the CGT discount, and why are calls to wind it back growing louder?

What is the capital gains tax discount?

Like negative gearing, CGT is most often discussed in a property context, but it applies to assets more broadly, including shares.

Capital gains tax is simply the tax you pay on the profit made when you sell an asset. Any net gain is added to your taxable income and taxed at your marginal rate. Your main residence is generally exempt.

Under current rules, Australian residents who hold an asset for at least 12 months can halve the taxable gain using the 50% CGT discount. Complying superannuation funds receive a one-third discount, while companies receive none.

Take a simple example. An investor buys a property for $600,000 and sells it 18 months later for $750,000. The capital gain is $150,000.

Because the asset was held for more than a year, only $75,000 is added to taxable income (ignoring other costs for simplicity).

CGT discount: How we got here

Australia introduced CGT in 1985 to broaden the tax base and close loopholes that allowed long-held gains to escape tax altogether.

Before the discount existed, the system relied on indexation (stripping out inflation) and an averaging rule to soften the impact of large, one-off gains landing in a single tax year.

While fair in theory, it was complex to administer, requiring costs to be indexed quarter by quarter.

In 1999, the Howard government scrapped indexation for new assets and introduced the flat 50% discount, arguing it would simplify the system and encourage investment.

Who wants what - and why?

With the inquiry open, submissions have poured in from industry groups, renters' advocates, economists and unions. Agreement is scarce.

Industry groups: keep it

Property and construction peak bodies argue the CGT discount is being blamed for problems it didn't create.

Master Builders Australia, the Property Council of Australia and the Real Estate Institute of Australia warn that cutting the discount would deter investors, reduce new housing supply and ultimately worsen rental affordability by reducing rental stock.

The Property Investment Professionals of Australia (PIPA) adds that policy uncertainty is already unsettling landlords.

Its 2025 Investor Sentiment Survey found 35% of investors would stop investing if the discount were cut to 25%, while 16.7% sold at least one property in the past year.

Not everyone agrees. The Planning Institute of Australia argues the discount reinforces speculative behaviour, contributes to spatial inequality and works against well-located housing supply.

Renters' advocates: scale it back

Groups such as Better Renting and the Tenants' Union of NSW want the discount reduced or removed for investment properties, with savings redirected to social and affordable housing.

They argue the CGT discount, when paired with negative gearing, encourages highly leveraged churn, pushing up prices while increasing instability for tenants.

Community organisations: reduce and reinvest

Housing and welfare groups - including the Council to Homeless Persons, Q Shelter, HAAG, Vinnies and ACOSS - support reducing the discount and recycling the revenue into social housing and rent assistance.

Their central argument is equity: the gains are heavily skewed toward higher-wealth households.
The Abundant Housing Network Australia agrees there's a strong tax and budget case for reform, but cautions that CGT changes alone won't fix affordability.

Research from the Grattan Institute suggests trimming the discount would reduce house prices by less than 1%, while planning reform and allowing more homes in established areas would have a far larger impact on prices and rents.

Unions: targeted cuts

The Australian Council of Trade Unions supports reducing the discount to 25% beyond one investment property and limiting negative gearing to a single property, with proceeds used to co-fund public housing and improve rental energy efficiency.

Politics: lines hardening

NSW Treasury has even urged Canberra to rethink the discount, arguing it boosts investor purchasing power and disadvantages first-home buyers.

The Coalition has signalled it would oppose changes, though an AFR report suggests some within the party are urging caution.

Greens senators Nick McKim and Barbara Pocock, who initiated the inquiry, argue the discount overwhelmingly benefits wealthy investors, worsens affordability and undermines tax fairness.

They want it scrapped and the savings invested directly in social and affordable housing.

The bottom line

The fault line is clear.

Builders and real estate groups say: don't touch the discount and fix supply.

Renters' advocates, social services and many economists say: trim a tax break that fuels investor demand... and build more homes.

Whether the Senate committee recommends a middle ground, such as cutting the discount to 25%, grandfathering existing investments, or limiting concessions to new builds, is now the question to be answered in March.

And whether the government listens to those suggestions will be answered in May.

New research from property analytics firm Cotality shows 87% of the 1100 real estate and finance professionals surveyed for its Decoding 2026 report expect home prices to rise over the year ahead.

Almost half expect growth above 5% while just 3.5% are bracing for falls.

That optimism comes off a strong 2025. National dwelling values climbed 8.6%, adding about $71,400 to the median home, according to Cotality's Home Value Index.

PropTrack's numbers painted an even brighter picture, with homeowners up roughly $81,200 in equity over the year.

But the new year brought narrowed confidence.

"Housing conditions were strong through most of 2025," says Tim Lawless, Cotality's research director.

"However, national averages distort the variation of performances and market conditions at a local level, and it's those differences that are becoming more important as affordability and policy settings diverge."

Smaller states are doing the heavy lifting

The smaller states are shaping up as the standout markets heading into 2026.

Down south, the Apple Isle took the chocolates this year, with 92% of professionals forecasting the Tasmanian market to rise. However, three-quarters think the growth will be modest, under 5%.

In Queensland, 89% of respondents expect prices to rise, with half anticipating house price growth of more than 5%. In Western Australia nine out of 10 agents expect price increases and just less than half are forecasting those gains to be above 5%.

South Australia rounds out the top three, remaining comparatively cheaper than its eastern neighbours.

Lawless says the trends pushing this optimism has been in place for several years.

"Strong internal migration across Queensland and WA, relatively better affordability compared with Sydney, and a persistent shortfall in housing supply have combined to support stronger price growth, and those factors remain largely intact."

Conversely, Victoria is the state least likely to grow, according to professionals, with almost one third expecting growth below the national average.

At the end of 2025, Victorian dwelling values remained below their March 2022 peak as higher property taxes, reduced investor participation and a recent history of weaker interstate migration shaped market outcomes.

"Victoria stands out for the scale of investor selling," says Lawless.

"The cumulative impact of policy changes and higher holding costs has weighed on investor activity, even as first home buyers now account for the largest share of lending across the states."

For buyers, it reinforces the point that national numbers matter less than where you're buying.

It's also why understanding what a home is really worth (not just what prices are doing) has become more important.

First home buyers are active but boxed in by caps

Government support is still driving activity at the lower end of the market.

More than 75% of agents say buyer activity picked up after the expansion of the First Home Guarantee. Competition has been fiercest around scheme price caps.

Since October, more than 21,000 first home buyers have accessed the expanded 5% deposit scheme.

However, fewer than half of Australian suburbs now sit below First Home Guarantee price caps, down sharply from a year earlier.

It's one reason shared-equity options, such as Help to Buy, are drawing more attention, even as buyers weigh the trade-offs that come with them.

Crystal ball: What the big forecasts say

Cotality's outlook is broadly in line with other forecasts.

In November, SQM Research published a more bullish view of the market, with forecasts of some cities up as much as 21%. However, that was before calls for interest rate hikes ticked back up after inflation data dampened optimism.

More recently, Domain expects about 6% growth across combined capital cities in 2026 while realestate.com.au is tipping 6% to 8%.

The difference this time is what sits underneath those numbers. With affordability limits firmer and the cash rate less certain, performance will vary more widely by regional factors.

"The market is entering 2026 from a position of strength however there is a cloud of uncertainty around inflation and interest rate settings as well as affordability challenges, all of which are likely to weigh on housing confidence," says Lawless.

That uncertainty cloud comes with the caveat that predicting cash rates and property market forecasts are notoriously tricky at the best of times.

In March 2021, Philip Lowe, the RBA's then-governor and a key person in charge of managing the cash rate, said to Australians that the cash rate would remain at 0.1% until 2024. After inflation rose due to the lingering effects of the COVID-19 pandemic, the cash rate rose to its highest point in 13 years.

The point is that while we can take the best educated guess with the latest information available, but there is no crystal ball sitting at the tables of economists, the RBA, or at Parliament House.

AI can now lighten rooms, remove clutter, replace furniture and insert features that don't exist. When these edits are used without clear disclosure, buyers may be forming expectations about a home that no inspection can meet.

As regulators play catch-up, the responsibility for accuracy still sits squarely with agents.

In October 2025 alone, more than 13 million Australians visited listing platform realestate.com.au. As a highly visual medium, online platforms have helped fuel demand for compelling photos.

But in this digital age, photographs may not always be completely accurate.

One Reddit user reports seeing a home advertised for sale, with images showing a big deck, thriving veggie patch and a straw-roofed hut described as a 'meditation room'.

An inspection revealed the deck was taped off due to rotting and unsafe timbers, the veggie patch was a weed-filled dust bowl, and the meditation hut had been split in half by a fallen tree. Apparently, the listing photos dated back to when the home was first built - 30 years ago.

How professional staging pushes up property prices

An increasingly popular trend is professional 'home staging'.

That's where the owner's much-loved though less photogenic furniture is replaced with rented designer furnishings.

It's legitimate, and it can be financially rewarding.

Stewart Bunn, communications and corporate affairs manager at First National Real Estate, says home staging can add around 5-10% to a final sale price.

The catch is that professional staging doesn't come cheap.

According to Hi-Pages, home staging can cost from $1500 to $8000-plus. This doesn't include the cost of offloading your old furniture, or paying for storage while it's hidden from public view.

The rise of artificial intelligence (AI) has seen a far cheaper solution emerge.

The rise of virtual staging

'Virtual' staging refers to the practice of editing photographs to fill empty spaces with new furniture, removing clutter from furnished homes, or making a property appear lighter and brighter.

For the seller, virtual staging can be quick and affordable. It can cost as little as $45 for one room if the process is outsourced to a third party.

Even that modest fee is being driven down by AI. Some services charge as little as 23 cents per image for virtual staging.

This raises two issues:

Is virtual styling any good?

That's debatable.

Home buyers tend to be a canny bunch. They are, after all, making one of the biggest purchases of their life. So it's natural to take a close look at what's on offer.

And alas, virtual staging can be heavy-handed.

A Melbourne villa advertised for sale in late 2025 featured a kitchen that differed markedly between shots - something likely to raise buyers' eyebrows.

Is virtual styling even legal?

Under Australian Consumer Law, which is administered by the Australian Competition and Consumer Commission (ACCC), selling agents must provide truthful and complete information about a property including its features.

However, the ACCC doesn't handle laws specific to property sales and rentals. These come under state and territory control though the basics still apply.

Real estate agents in NSW, for example, must ensure photos used to advertise homes are accurate, clearly labelled, and not misleading.

Similar rules apply in Queensland. Digital 'enhancements' that artificially lighten the colour of walls, or alter rooms or outdoor areas to look bigger than they really are, are regarded as misleading.

Even so, as Stewart Bunn points out, "Low-quality AI virtual staging absolutely pushes into risky territory.

"If AI alters layouts, finishes, fixtures or sightlines in a way that a reasonable buyer could rely on, the risk is real, even if a disclaimer is included."

How agents are editing images to add non-existent features

At the thin edge of the wedge, one Reddit poster came across an ad for a Queensland property featuring a swimming pool with an attractive water fountain.

The issue? Neither the pool nor water feature are real.

While the ad noted the image was digitally altered "for illustration purposes", Bunn cautions, "That is drawing a very long bow."

He adds, "Even where an image is labelled or disclosed, the initial visual impression carries weight.

"Buyers scan listings quickly. Many will see the image before reading the fine print.

"If the headline image depicts a feature that does not exist, such as a pool, the advertising is skating dangerously close to being misleading."

Bunn continues, "From a professional standards perspective, this is behaviour the industry is actively discouraging."

Reddit users were also critical of the practice.

"Even ignoring the ethical issue here, this is so stupid," commented Reddit user Lucky-day00.

"If I want a house with a pool, I'll go to check the place out, see it has no pool, and move on. And probably actively avoid listings from that agent because they waste my time.

"Or, if I actively don't want a pool (which is the case for me), I'll see the pool in the ad and move on.

"It repels both markets."

Another user, Extension_Branch_371, said: "This needs to be made illegal if it isn't already. And realestate.com and domain etc need to stop accepting these photos."

While parksofficeninenine added, "Wtf is even the point. If every house for sale has a photoshopped pool there would be no point in looking at houses. It just becomes pictures on the internet... Get this shit off real estate listings."

New NSW laws aim to stop misleading rental listings

In mid-2025, the NSW state government introduced legislation that doesn't just safeguard the personal details of renters, it also requires disclosure when images in rental ads have been altered to conceal faults.

It's a step in the right direction, especially as Sydney's vacancy rate is a wafer thin 1.8%.

More broadly, for the one in three Aussies who rent their home, time wasted checking out dud properties can mean missing out on a decent rental.

How California is cracking down on AI in property images

On the other side of the world, the US state of California has introduced new laws, effective January 1, 2026, which require real estate professionals to disclose the use of digitally altered or AI-generated images in property advertising.

Anything from minor edits (like lighting) to substantial changes such as adding or removing grass must be declared to give buyers a clearer, more accurate visual understanding of a home before they visit.

It's a fair bet that right now plenty of Aussies aren't sure about taking a leaf from any US playbook.

But legal requirements to show a property for what it really is can save valuable time as 2026 shapes up to be a competitive market for buyers.

Reader question

Hi Paul,

My partner and I, both 24 years old, have just purchased our first property together - a unit in Sydney - with the help of the government's first-home buyer scheme.

We were often told that now was the right time to buy, and after a seven-month search, we decided to take the plunge. We both work full-time and are already thinking ahead - our goal is to build a property portfolio and purchase a second property within the next two years.

We have a dog - Amora, a three-year-old Border Collie, so upsizing to a home with a backyard - and more bedrooms - is a priority for us.

We understand we'll need to stay in our current property for at least a year before considering any moves. So we're taking this opportunity to look at our options. Our mortgage is $660,000 and we have a redraw account.

With our mortgage, at what point would you recommend purchasing a second property if we were to use the equity from our first home to upsize? - James

Paul's response

You know James, my family and friends often ask why, after more than 40 years of answering people's questions on TV, radio and in Money magazine, at the age of 70 I still enjoy doing this.

The answer is that I love hearing people's stories and having a crack at answering their questions. Sure, I don't get a lot of information in a hundred or so words, but I feel that I get the essence of what is happening in people's lives.

We all have different challenges with our personal finances. There are many ups and downs in life and one way or another, money plays a part. This is normal life. I try to answer based on the practicalities of money, but I also try to bring my own experiences to the story.

So, your story made me smile. It is not often I hear from two 24-year-olds who have purchased their first property and are planning their next acquisition. What I also enjoyed is that you added a bit of colour for me - your three-year-old Border Collie. Let's chat about that later.

Hearing from your generation gives me so much pleasure. Our kids are in their early to mid 30s, and much to our son's alarm, he is nearly 40. We have four grandkids, all under six. Despite starting small investments for them, and the older three are now quite interested in their bank account, for them money is just something to be converted into toys.

What I much enjoyed about your email was that at 24 I was yet to meet my wife, Vicki, and a bit like my grandkids, I saw money as something to be converted into goods, in my case, beer or golf balls.

You two are all over the fundamental principles of money. The earlier you start the better, as you let compound returns work for you. Somehow, and I'd love to know how, you have started the wealth creation process very early in your lives.

Maybe it was your parents' influence.

Interestingly - and listen up parents (and grandparents) - it does not seem to matter whether your parents were good or bad with money, the critical factor is that money, for better or worse, is discussed at the dinner table, in the car or wherever the subject pops up. In the area of financial literacy, we see kids who are good with money regardless of their parents being good, bad or indifferent with money.

The main factor seems to be that money is not some hidden secret, it is discussed as the kids grow up.

Doing all the right things

Whatever the reason, you are both good with money. I don't need to be Albert Einstein to work this out. You've sussed out the first-home buyer scheme and taken advantage of it to buy your first home.

You also have a redraw account, which along with growing equity in your apartment becomes the way you purchase your next property. All this also tells me you understand saving. Too many people don't. Saving does not happen by accident. It comes about because you spend less than you earn.

At some stage you may decide to start a family, so now is a good time to invest with two incomes, but please don't leave yourselves with no lifestyle options after your repayments on two properties.

I'm not particularly concerned about diversification at this early stage in your lives, that can come later. It is early days in the wealth-creation process for you both, but compulsory super will be starting to do this for you. The next bit you can do yourself. The size of your next mortgage is a direct reflection of what you are earning and can save. As two smart young people, it is hardly likely that at age 24 your salaries have peaked out.

Keep building wealth

Continuing to build up your asset base will pay big dividends in time to come, so buying an investment property in the next couple of years makes sense to me.

My only concern would be that you overextend yourselves. Using the equity in your home is fine, but it is the repayments I am concerned about.

The rent generated would cover a fair bit of your mortgage repayments, but obviously you would also have insurance, rates, agent fees, maintenance and so on. Costs in excess of your rent would, of course, be tax deductible, which should help a lot.

Remember that you have, in all likelihood, four or more decades of work ahead. Mind you, the way you are going, financial independence is likely to come early for you both, but a key part of your money planning is to have fun. Vicki and I had next to no money when we met, but our first step was to plan a trip to Europe.

Our primary funding mechanism for that was a giant beer can money box. We put our change in it every day after work, and after a year we had our spending money. I can appreciate this concept won't work in a world of tapping your cards, but our money box beer can was an excellent form of saving.

Finally, your Border Collie. As our kids grew up we had a Beagle for some 14 years. Winston was the most gorgeous, lively, heedless animal I have ever met. We loved him. But our middle daughter and son-in-law have a Border Collie. He is a terrific dog who comes to us quite a bit.

It is such a shock to have a granddog that not only does not open the fridge and consume the contents, he does not hide and bury remote controls and mobile phones, but listens and is obedient!

To finish with a money analogy, I am glad you two are not the Beagles of money. I and all the team at Money wish you long, happy lives. I know I don't need to worry about money with you both, just keep doing what you're doing.

Whether you're buying or selling a home, looking to refinance your mortgage or wanting to access equity you've accrued, a formal property valuation can be a key part of the process.

So, what do existing homeowners and potential buyers need to know about the different types of valuations that exist and the process involved?

Read on for a run-through of some of the fundamental elements of property valuations.

1. What is a property valuation?

In short, a property valuation is an independent analysis conducted by a professional valuer designed to provide an assessment of a property's market value.

"A valuation from a qualified professional should give you the transparency of process, ethical and procedural rigour and the confidence to rely on the assessment value," explains Kevin Brogan, a certified practising valuer and the national director, group risk and compliance at Herron Todd White.

"It could be related to some form of property settlement, family law scenario or mortgage security. So, there's a variety of motivations for obtaining a valuation in the first place."

 

 

 

 

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2. When are property valuations needed?

As Brogan notes, there are a plenty of situations in which a formal property valuation could be useful or even necessary. Here are some of more common ones:

Buying or selling a property

Perhaps the most obvious is during the buying or selling process of a property.

For instance, a seller may organise a valuation to provide them with a guide when listing their property for sale, while a buyer may be interested in ensuring that a home they plan to bid on in is priced accurately and fairly.

The mortgage process

Brogan says that property valuations are a critical part of the mortgage approval process - whether that's someone taking out a brand new loan or refinancing an existing one.

In this situation, lenders need to be confident of the value of the asset (the property) being used as security, so they may either require a valuation or assessment depending on the risk involved.

"Lenders can have, if you will, a risk matrix. Let's say you want to borrow 50% of the value of the property and you have been in permanent employment for a decade, the bank might decide to get get what's called a desktop assessment," Brogan says.

"Whereas for higher-risk lending, lenders may get a valuation because they actually want to know about the condition of the property, as well as other factors that might not directly impact its market value."

Tapping into equity

It's a similar situation for homeowners who are looking to make use of any equity they may have built up over the years to borrow from their lender.

That could be to do anything from conducting home renovations to purchasing an investment property.

In order to see how much equity has been built up though, the lender will need to get an idea of the current market value of the property.

Family court matters

It's not uncommon, according to Brogan, for professional valuers to be called upon during matters like divorces in order to independently assess the market value of a property during the separation of assets.

"With something like a family law situation, one party will be hoping for more, in terms of the value, and one party will be hoping for less, in order to benefit their settlement position.

"What can be helpful in that environment is if both parties instruct a valuer to undertake the valuation. That reinforces the independence and the valuer's duty is actually to the court, not either party."

3. What is assessed during a property valuation?

The thoroughness of a valuation will ultimately depend on the level of depth required by a client. However, in the case of residential property valuations, a valuer would typically look at:

• Layout and size: This not only includes the layout of the home, the size of the building and the plot of land it's on, but the aspect of the property and even the shape of the land
• Development potential: If it's called for, a valuer may look at whether the property has any future development potential or restrictions that would impede development
• Condition and risks: Are there any risks or essential repairs that may impact market appeal? For example, a missing roof tile that - while relatively cheap to fix - could put the structure at risk
• Comparable sales: How have homes with similar attributes in the area performed recently when they've gone on the market
• Location: Where the property is situated in a particular suburb or town and whether the local economy is strong, stable and likely to uphold demand for properties
• Market direction: Is there strong and continued growth affecting property values in the area, or is growth subdued or non-existent

Brogan says that all of that information will form the basis of the analysis which, along with measurements of the home and photos of key features (such as rooms like kitchens and bathrooms or any notable defects) will be presented the valuer's report.

4. How do valuations differ from price estimates or appraisals?

There are a number of different ways for owners to get an idea of the value of their property - each with differences that may be worth appreciating.

Formal valuations

Formal valuations are performed in person by independent, professional valuers. The assessment is likely to include an analysis of many of the features outlined above in order to provide a reliable indication of a property's market value.

Desktop assessments

In some situations, lenders may decide that a full valuation of a property is unnecessary because the borrower is relatively low risk. Instead, they might employ a valuer to conduct what is known as a desktop assessment.

"In a desktop assessment, the valuer doesn't inspect the property, so it doesn't qualify to be termed a valuation. But that may be perfectly fine for the purpose and the risk profile," Brogan says.

"Any valuer undertaking a desktop assessment is required to have the relevant knowledge, skills and experience gained by undertaking valuations in the locality though. So, it's not acceptable for a valuer based in Adelaide to do a desktop of a property in Canberra."

Automated Valuation Models

Some homeowners will have come across price estimates on property platforms like Domain or realestate.com.au in the past. These platforms, Brogan says, use Automated Valuation Models (AVMs).

"An AVM will look at a tremendous volume of data held within a property database to come up with a likely price estimate. These can be quite accurate, but the data quality varies from location to location, because some markets are more active than others.

"It's also important to note that an AVM does not follow professional valuation standards. It's a statistical algorithm-based analysis, but it does not follow the recognised valuation approach.

"So, if you're wondering what your house is worth and the AVM tells you a million dollars, that might be reasonably accurate. But if you're making a financial commitment by selling your property, you'll have to consider whether you're happy using that or getting a professional valuation."

Real estate price appraisals

Many owners are likely to have received flyers in their letterboxes offering free price appraisals from their local real estate agents.

So just how accurate are these? Ultimately that will depend on the skill of the individual, but it's worth bearing in mind that real estate agents aren't necessarily qualified valuers.

"Real estate agents will, in some cases, be looking to secure you as a client when providing you with an appraisal figure," Brogan says.

"Now I'm not suggesting that they deliberately inflate their estimates, but clearly one of their aims will be to secure you as a client against the competition."

5. How much will a property valuation cost?

The price of a property valuation will vary from case to case depending on the complexity of the assessment and even the location of the property (if it's in a more remote location that requires travel).

"If you're an individual looking for a valuation of your house for your own interest, I would suggest that it would be in the hundreds of dollars, but less than $1000," Brogan says.

"If you're in a family law situation, which is more complex, I would suggest that it is probably going to be above $1000."

This week on the Friends With Money podcast, Money's Tom Watson is joined by Jack Elliott, mortgage broker and national first home buyer specialist at Alcove and First Home Unlocked, to discuss shared equity schemes and the first home buyer market.

00:00 Introduction

01:31 Understanding shared equity schemes

03:27 The federal government's Help to Buy scheme

03:55 Eligibility and key points of Help to Buy

06:43 Considerations and drawbacks of shared equity schemes

13:35 Market insights for first home buyers

16:19 Final words of advice

18:03 Conclusion

Listen to this episode of Friends With Money

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Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

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New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

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Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Reader question

Hi Paul, my husband and I are wondering if we are planning intelligently or losing the plot.

He is 75, I am 72, both with super funds in pension mode, collective income about $180,000. We have about $500,000 in the bank, and about $50,000 in direct shares.

We have a 200-acre farm with a house and the land leased out in South Australia's mid-north (currently recovering from drought) that we use from time to time to visit one half of our family who pay for the privilege of using the land, which is valued at about $600,000.

We have owned an investment property, a '60s house in an inner northeastern suburb of Adelaide for a while and it's getting tired. We've been offered $700,000 for it as is by developers.  We have embarked on subdividing the block and building one three-bedroom rooming house (SDA Improved Liveability standard) and a two-plus-one carer SDA Fully Accessible standard house.

We are budgeting a total cost for the development of $970,000, resulting in a value of $1.8 million and an income increase from $30,000 to $127,000 (less expenses) and a loan of $600,000 (and one or two years without the $30,000 rent).

Our object is to provide a 20-30-year legacy for our six grandchildren to share through a testamentary trust. Have we lost the plot or is it a sensible plan? We're long-time readers of Money. - Lynda

Paul's response

No Lynda, you have not lost the plot. At your ages of 72 and 75, I do get nervous about risk and the permanent loss of capital. I should say I am 70 and my wife is 69. Due to this, we've moved into debt-free mode, but our investments remain very heavily growth orientated.

We like to have a couple of years cash to carry us through an inevitable big market downturn at some stage, don't ask me when or why, but every century we seem to get around three of these. I'm not silly enough to argue against thousands of years of history.

Initially, upon quickly reading your email, I thought uh oh debt in your seventies. But when I did a careful read I saw that on top of a large pot of super that is generating $180,000 a year for you, you have $500,000 in cash. You will, I assume use some of this for the development, plus the $600,000 loan.

In an emergency, your super, which is fully accessible to you, would easily cover the loan. But please spend some time making sure you have carefully planned for the downside. As you know the rule to look after kids and grandkids is to first and foremost be financially secure.

I can see the safety argument you would make. You will own your home, you have equity in the farm and a lease payment for its use. There is a stack in super, your cash, plus $50000. The Adelaide property market is very strong and many big projects in South Australia mean many jobs. I can see that another safety valve is an ability to sell the project partially completed.

In summary, while debt in our seventies is not my favourite, I can see your 'safety cover' if things go wrong. As you know, there will be some stress points building the property, but that is pretty normal.

On a positive note, I love what you are doing for the grandkids. What a great legacy. I note it goes into a testamentary trust, great idea. I presume your kids will be trustees? The fact you have set up this trust as part of your estate planning means you have had legal advice and I am sure you have considered how the six grandkids will be treated if in decades to come, one needs money for one reason or another.

You can't solve every problem regarding the grandkids in a couple of decades, it depends how their lives pan out, but it makes sense to have a structure that copes with drama.

Reader question

Hi Paul, I'm 74, own my home outright but due to my health am thinking of selling and buying a property that can accommodate myself and my two adult children (they are 55 and 50).

They don't yet own a home but could afford a mortgage so we thought we could all put in and get something that suits us all.

However I want to retain my pension. Who do I speak with to see if this is possible? - Sue

Paul's response

My mind is flashing 'danger, danger', Sue. I can see how this could work really well. I can also see how it could be a complete disaster.

Obviously, I don't know you or your adult kids, but as you live together you obviously get on well. As you age, living with your family would have real benefits. But here, I need to point out the problems that could crop up.

First, your own home, as you know, is an exempt asset for the age pension. It is also a fabulous, secure asset for you. If you sell and use some of the money to buy a home with your children, you can have quite high assets and keep a full pension.

This is up to $321,500 for a single, homeowner aged pensioner. Services Australia can give you specific advice about the impact on your pension under both the assets and income test.

Frankly, though, while important, this is one of my lesser concerns.

What really worries me is that if you buy a home, as tenants in common with your kids, each owning a percentage related to how much you each add in cash (in your case) or a mortgage for the kids, if for any reason they can't pay the mortgage repayments, exactly what happens?

I know this is an extreme comment, but are you out on the street with a forced bank sale of the home?

In my opinion, the first person you speak to is a solicitor to work out how you can own a home with your children, without you risking your financial security. A written agreement drawn up by your solicitor will be essential. Then it is talking to a lender with your kids and see what loan capacity they have.

Sue, you sound like a lovely person who has done much for your kids and wants to do more. That is super generous and it may work beautifully. But you must speak to a solicitor first and protect your lifetime of work and your future security that is currently tied up in your home.

With high property prices, flat wage growth and stricter lending rules, the idea of the government covering up to 40% of a property's cost is attractive.

After it all, it makes saving a deposit easier and reduces the pressure of loan repayments.

But shared equity is not a simple shortcut into the market. It's a co-ownership arrangement: the government takes an equity stake in the property, and you buy it back over time or when you sell.

For some households, this structure makes home ownership possible. For others, the obligations and long-term costs may outweigh the benefit.

Here's how the scheme works, who it's most likely to help, and the risks every buyer should consider.

How the Help to Buy scheme works

Help to Buy is open to first-home buyers and "returning buyers" - those who previously owned but no longer hold property. Under the scheme, the government contributes:

• Up to 40% of the price of a new home
• Up to 30% for an existing home

The buyer borrows the remainder, reducing the deposit required and lowering repayments.

The government's share goes up or down with the property's value because it matches its contribution.

The scheme also helps borrowers avoid lenders mortgage insurance (LMI), which is usually charged when the deposit is less than 20%.

If you choose to take part in the scheme, you'll be answering to Housing Australia, the government's independent housing agency.

The program is available in most states and territories, with WA and Tasmania expected to join once legislation passes. Commonwealth Bank and Bank Australia are the initial participating lenders, with others joining in 2026.

Who is eligible?

Eligibility rules are strict. Applicants must:

• Be Australian citizens aged 18 or older
• Earn up to $100,000 as singles or $160,000 as couples or single parents
• Live in the home they buy
• Purchase under local price caps (shown below)
• Secure a loan with a participating lender

Only 10,000 places are available each year for four years.

Who Help to Buy is most likely to help

While first homebuyers are the main target, the scheme supports a wider group of households in specific circumstances.

1. Buyers who fall short on borrowing capacity

Some households can save a deposit but can't borrow enough to meet rising local property prices. Help to Buy can bridge that gap, contributing the portion a bank won't lend and reducing the loan to a manageable size. This can bring ownership forward by several years for buyers stuck between saving and market growth.

2. Single parents needing to buy out an ex-partner

In separations, one parent may wish to keep the family home but lack the borrowing power to purchase the other party's share. Mortgage broker Nick Rabba says the scheme can fill that shortfall when a borrower has equity but insufficient borrowing capacity, allowing them to retain the home and avoid being forced to sell.

3. Families transitioning to a larger home

Households needing more space may use the scheme to upsize while staying in their preferred suburb or school catchment. Eligible buyers can settle on a new property first and sell their existing home within four weeks, easing the transition without relying on temporary rentals.

The risks and obligations buyers need to know

Help to Buy lowers the upfront cost of purchasing a home, but shared equity creates long-term trade-offs that buyers need to understand clearly.

1. You only own your share until you buy it back

While shared equity is complex, Mortgage broker Joseph Daoud from It's Simple Finance says its vital people know the government co-owns the property.

"When you sell, the government receives the same proportion of the sale proceeds as the equity it contributed," he says.

That means buyers only benefit from growth on their portion. Importantly, the value of the government's share is based on the property's value at the time of sale, not a fixed dollar amount.

For example, on a $750,000 home where the government contributes 20%, a future sale at $1 million gives the government a $200,000 share - not the original $150,000 contribution.

Daoud says this is the case even if the property has stagnated or fallen in value.

While this is how shared equity is designed to work, it can limit long-term wealth building for buyers who anticipate strong price growth.

"You will still need to repay the government's initial contribution. You may not build as much equity as you would with a larger deposit."

2. Buying out the government can cost more than expected

Buyers can increase their ownership over time by repaying the government's share in 5% increments or when they sell. They can also refinance through a participating lender later to reduce the government's stake.

But again, the repayment is based on the current market value, not the original purchase price.

Daoud says this could surprise buyers: "If prices rise significantly, the cost of buying out the government rises too."

3. Strict rules continue long after settlement

Eligibility doesn't end once you move in. Buyers must continue to meet stringent conditions to occupy the home.

"You must remain within the income thresholds and live in the home; turning it into an investment property isn't permitted and could result in penalties or removal from the scheme," Daoud says.

Also, if you happen to get a pay rise and your income exceeds the thresholds - $100,000 for singles or $160,000 for households - you may be required to start buying back the government's stake sooner than planned.

There are some perks: Buyers would get to keep the percentage difference in value after major renovations.

However, renovations over $20,000 renovations require approvals and valuations, and buyers who fail to follow the process may not receive credit for improvements.

4. You carry all the costs of ownership

Despite co-owning the home, the government doesn't contribute to any ongoing expenses.

Daoud explains: "You're responsible for stamp duty, rates, maintenance and insurance - the government doesn't cover these despite benefiting from the capital gains."

5. Income caps don't reflect reality

You are not automatically guaranteed a home loan even if you meet the eligibility requirements for Help to Buy. You will first need to have your income and financial capacity assessed to see if you are eligible for a home loan from a participating lender.

So, despite having wide-ranging income caps, Daoud says Help to Buy would only target a narrow group of buyers.

"The limit in New South Wales is $1.3 million," he says. "In practice, someone earning under $100,000 with no other liabilities might only be able to borrow around $550,000, and even with the government's help, would fall far short of the price cap."

6. The scheme adds demand without adding supply

While it will help a small group of buyers, Daoud says the broader effect is to inject more demand into a market where supply is already constrained.

Daoud warns that because it doesn't add new homes, it could fuel demand and push prices higher.

"Without more housing supply, demand-side assistance risks inflating prices rather than improving affordability," he says.

"A sustainable solution requires streamlining planning approvals, investing in infrastructure and encouraging new construction, so affordability improves across the board."

Who the scheme may not suit

Help to Buy is not for everyone. It may not suit:

• Buyers uncomfortable with long-term co-ownership
• Those planning to convert their home to an investment property
• Households expecting rapid income growth
• Anyone wanting full control over capital gains

Bottom line

Help to Buy offers a meaningful path into home ownership for some Australians, particularly those caught between saving a deposit and keeping pace with the market.

But the trade-offs are significant. Shared equity limits how much wealth you can build, and the rules and obligations continue long after settlement.

For the right buyer, the scheme can be a helpful leg-up. For others, the long-term costs and restrictions may outweigh the benefit. As always, independent financial advice is essential before signing on.

Reader question

Hi Paul, my wife is 60 and I'm 57. We both work permanent jobs, me full-time and my wife permanent part-time.

There are some companies saying we can access a reverse mortgage loan from age 55. Can you offer advice on this and recommend a suitable broker?

We plan on using the money to renovate. - Mark

Paul's response

No, let's not do this, Mark. I am a strong supporter of the concept of a reverse mortgage, but with many caveats.

I think they can work well for older Australians. Quite frankly, the older you are the safer they are, but a reverse mortgage is compound interest in reverse.

Also, they can be expensive. Expect to pay close to 9% interest, plus application fees. At ages 57 and 60, this could really build up a lot of debt quite quickly.

I would argue they are valuable for an older couple, in particular, a couple receiving a pension. In this instance, they can apply for a Home Equity Access Scheme via Services Australia. As a government initiative, the interest rate is terrific, 3.95%.

In your case, you both have permanent jobs, one full-time and one part-time. I don't want anyone selling you a high-interest reverse mortgage.

My view is that you should apply for a mortgage, where you would be paying interest of about 5%.

I understand you may have cashflow issues and want a reverse mortgage so you can renovate, with no repayments. But at quite young ages, I really fret about how this debt will compound over time.

Sure, you may have many personal issues driving this idea that I don't know, maybe you have no dependants you wish to leave money to or any number of specific personal reasons for seeking 
a reverse mortgage.

Before committing to a reverse mortgage, please do your research carefully and understand the impact of the building debt against your home. Above all, it is essential you talk to an experienced solicitor before signing a reverse mortgage contract.

As 2026 approaches, new forecasts show a market split in two: wealthier buyers with equity and family support on one side, and a growing "rental generation" on the other.

Fresh modelling from SQM Research suggests prices will continue lifting into next year, even as affordability hits breaking point and supply continues to lag.

Here's what the data, industry groups and brokers say is coming.

Prices are still rising

SQM Research's Housing Boom and Bust Report 2026 forecasts another year of gains, led by Brisbane, Perth, Adelaide and Darwin.

Those cities could see dwelling values rise by up to 16% under SQM's base case. Nationally, prices are tipped to rise between 6% and 10%, assuming:

• Rates remain on hold until mid-2026
• Modest population growth
• A slowing economy followed by possible rate cuts late in the year

Despite inflation ticking up, SQM expects the momentum from late 2025 - driven by strong migration, earlier rate cuts and changes to the First Home Buyer Deposit Scheme - to carry into 2026.

Louis Christopher, SQM Research managing director, says the outlook is highly dependent on how economic conditions evolve.

"From a sluggish economy to sticky inflation delaying rate relief, or even a global slowdown - our scenarios highlight the market's sensitivity," he says.

Even so, SQM's modelling shows Perth, Brisbane and Adelaide recording double-digit growth in every scenario.

Australia still can't build enough homes

While demand remains strong, the real pressure point is supply, and industry groups warn the bottleneck is worsening.

The Housing Australia Future Fund (HAFF) has received new funding, but progress on the ground remains slow.

Despite supporting 18,650 homes in the first two rounds, only 889 have been completed so far.

"That figure reflects potential funding, not completed dwellings," says Housing Industry

Association managing director Jocelyn Martin.

She warns of ongoing roadblocks:

• Planning delays
• A lack of serviced land
• Workforce shortages
• Construction costs still sitting well above pre-COVID levels

"We're still a long way from 40,000 finished homes," Martin says. "The intent behind the HAFF is right... but Australia doesn't need more press releases, it needs more homes."

Meanwhile, the people building the homes share the concern.

Developers say the numbers now 'don't stack'

Property developer and Tallpopie co-founder Darragh Heard says government fees, regulatory complexity, insurance requirements and construction costs have pushed margins "to the brink".

"Developers have the land and the vision, but the numbers simply aren't stacking up," Heard says.

Profit margins on many apartment projects now sit below 5%, leaving almost no buffer for rising costs or delays.

According to Tallpopie, other pressure points include:

• High-density approvals dragging on - in Sydney, fewer than one in four councils meet approval timeframes
• Average wait times hitting 173 days, with some stuck for over 250
• Construction costs rising 30% since 2018
• The cost of a mid-rise apartment in Sydney jumping from $666,000 to $905,000

This has all resulted in smaller, affordable units near transport - the stock first-home buyers need - becoming increasingly unviable to build.

"The cost to build the type of affordable housing Australia says it needs most is spiralling exponentially," Heard says. "This is why we're seeing an exodus of first-time buyers from the apartment market."

Three property trends in 2026

Trend one: First-home buyers will increasingly need generational wealth

With entry-level apartments now around $1 million on the city fringe and up to $1.5 million further out, first-home buyers are being priced out of what used to be the "starter" segment.
"The most active market segment by far are baby boomers who've already built substantial equity," Heard says. "They're snapping up larger apartments as they right-size - and that further constricts options for younger buyers."

Mortgage broker Rebecca Jarrett-Dalton, founder of Two Red Shoes, says the gap between those with family backing and those without is widening fast.

"Intergenerational wealth is now the dividing line," she says. "If your parents own a home, you can do it too. Without that support, many young families face a lifetime of renting."

Trend two: Parents are prioritising their kids' future over their own retirement

On the other side of the equation, many parents are rethinking how they use their wealth as deposits rise and wage growth stalls.

"Heavy housing costs mean hard work alone isn't enough to save for a deposit," Heard says.

"When around 40% of earnings go toward housing, plus schooling, groceries and insurance, the only way in for many is parent funding."

Jarrett-Dalton says investor behaviour is shifting too: "The primary reason many investors are entering the market now is to create financial security for their children, not for their own retirement wealth."

"Our job as brokers is no longer just about securing a rate," she adds. "It's about constructing pathways - navigating family wealth, rentvesting, and shared ownership."

Trend three: The rise of the rental generation

With buying out of reach for many, more Australians will rent long-term, and in some cases indefinitely.

Heard warns that this shift has wide ripple effects: "A generation being denied access to the housing market will cause reverberations through the entire system," she says.

"When first home buyers can't buy, investors can't exit. When renters can't find homes, essential workers leave the city. And when developers can't make projects viable, the pipeline of new housing dries up."

While many point to tax policies such as negative gearing and the capital gains tax exemption as exacerbating the housing crisis, Jarrett-Dalton says the public conversation about investors also needs to change:

"With the rental market at crisis point, demonising landlords only worsens pressure. If we have no housing, you can't rent. Investors are an essential part of supply."

Where does that leave 2026?

The picture for next year is a mix of rising prices, inadequate supply, and growing inequality between those with family support and those without.

If SQM's forecasts play out, many potential buyers will fall even further behind - not because of lack of effort, but because entry costs continue to climb faster than incomes.

For now, both industry and policy experts agree on one thing: Unless Australia can build more homes, faster and more affordably, the divide in the housing market will only deepen.

This week on the Friends With Money podcast, Money's Tom Watson is joined by Derek Gascoigne, private client adviser at UniSuper, to run through the nuts and bolts of the First Home Super Saver Scheme (FHSSS).

00:00 Introduction

00:55 Overview of the First Home Super Saver Scheme

05:40 Eligibility criteria

09:21 How to access your FHSSS contributions

14:36 Planning and important considerations

17:23 Final thoughts and advice

20:15 Conclusion

Listen on Apple Podcasts

Listen on Spotify

Subscribe on YouTube for closed captions

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

Released this morning, Domain's forecast suggests that the median house value across Adelaide, Brisbane, Canberra, Melbourne, Perth and Sydney will rise by 6% over the course of the year to a new high of $1,339,267.

Unit values across the combined capitals are also expected to tick up by 5% throughout 2026 to reach a median price of $759,112.

As Nicola Powell, chief of research and economics at Domain notes though, the performance will vary from city to city.

"Australia's housing market is set for another strong year, with demand still high and buyers continuing to chase affordability, particularly in the unit market, which is expected to outperform in several cities."

Speaking of which, Brisbane is set to experience the largest growth rate in unit prices, with Domain forecasting a 7% jump in 2026. That's just half the growth rate recorded this year (14%).

Australia's most expensive property market - Sydney - is expected to record the highest growth rate in house values though.

Domain's outlook suggests that house prices will rise by 7% during 2026, pushing up the median value of a house in Sydney to a record $1,924,430.

What's driving home values higher?

In its report, Domain suggests that a number of factors are likely to contribute to further growth in property prices next year.

The three cash rate cuts made by the Reserve Bank and passed on by lenders this year have increased borrowing power among would-be buyers, as has the steady recovery of real incomes in recent years.

While the prospect of further rate reductions from the RBA is up in the air, Domain suggests that the rate reductions that have already been made are likely to help more buyers enter the market going forward.

Also on the demand side, the recently expanded First Home Guarantee Scheme is likely to generate additional demand in the entry-level market as first-time buyers look to take advantage of relaxed income and property price caps.

Domain notes that the expanded initiative could lift home prices by 3.5% to 6.6% in its first year, though the impact is expected to wane as the initial surge in buyers making use of the scheme tapers off.

Home prices are also expected to continue to grow as a result of ongoing supply constraints - both in terms of the number of homes being built and the number of listings coming on the market.

While the report suggests that the country's housing shortage remains acute, there may be some bright spots on the horizon.

"There are encouraging signs on the horizon, with new housing supply starting to come to market as building activity picks up," Powell says.

"While prices and rents will remain elevated, slower population growth, rising incomes and a cautious RBA should help the market move toward more balanced conditions by the end of 2026."

What they may not be aware of is that the air above their home is theirs too, and in a country starved of housing, it could be worth real money.

Thanks to new planning rules and a growing market in 'airspace rights', homeowners can now lease or sell the right to build in the unused space above their homes.

The money made from developing that space could be used to pay for major repairs, boost property values and, in some cases, deliver a windfall while staying put.

It's time for homeowners to start looking up.

Australia's airspace potential

Leading the push is Buy Airspace, founded by accountant Warren Livesey who worked on rooftop projects in the US and Europe.

"Airspace real estate has taken off overseas. It's the fastest growing housing solution in New York, London and Paris," he says. "Sydney's next."

The London experience shows what's possible. Independent research has found rooftop developments could deliver 42% of the city's new housing needs.

Livesey puts the value of that at around £50 billion ($102 billion). Australia's opportunity is larger.

"Sydney has some of the most expensive real estate in the world. So we have some of the most expensive airspace in the world," says Livesey.

What does he think it's worth? Livesley estimates:

• Rooftop airspace in Australia typically sells for between $2500 and $10,000 per square metre (sqm), depending on the location.
• Australia has 340,000 strata schemes, typically three-storey walk ups with about 10 units and a 300sqm roof.
• "The average value added is $5000/sqm," he says. That could add up to more than $500 billion in untapped value.

From 'heaven to hell'

If you own land in Australia - whether individually or through a strata - Livesey says you own everything from "heaven to hell".

"You basically have all the airspace above you, but the caveat is that governments and councils can decide how much of that sky you can use."

For example, if your building stands at 10 meters high but the limit is 15 metres, that's five metres of unused potential.

That is the situation thousands of NSW homeowners now face after the State government reformed its low- and mid-rise housing policy in March.

The reforms change planning controls within 800 metres of 171 town centres and train stations.

In those areas, dual-occupancies, terraces, townhouses and low-rise apartment buildings can now be built across metro Sydney, the Central Coast, Illawarra-Shoalhaven and the Hunter.

According to NSW Premier Chris Minns, these homes played an important part in providing housing over the past century but, in the past few decades, councils have effectively banned them.

This reform means buildings that couldn't go above three storeys can now reach six.

"Only one in four buildings will be knocked down and rebuilt because existing owners don't want to go anywhere," he says.

"It's the three out of four that we can build on top of," says Livesey.

How to make money from your airspace

It's usually a four-step process, says Livesey.

1. Assessment

The first step is to work out whether your building has usable airspace.

"Many people don't know their building's height," says Livesey. "It's about three metres per storey plus the roofline. Then check what you're allowed on your council website."

If there's room, a town planner will need to confirm if the rules allow for extra levels, while an engineer checks if the building can take the weight.

"If they both say yes, then we've identified airspace that can be built on," he says. This assessment costs $2000-$5000. If the property is deemed not to have usable airspace, the process ends.

2. Tender

Once usable airspace is confirmed, Buy Airspace takes the proposal to developers.

"They respond with a one-pager: how they would build, the profits and the split," says Livesey. Rather than selling their roof, homeowners then grant developers access under what's called a "call option contract".

"It means the homeowners still own the airspace," says Livesey. "The developer only has the right to build on it. That way there's no stamp duty upfront, no massive holding costs, and no one's forced out."

3. Development

"The developer will fund the whole project," says Livesey. "They will plan it, submit the development application to council, they will build it, then sell it, splitting the profit with existing owners.

To keep costs down and reduce disruption, most projects use prefabricated homes made from crosslaminated timber (CLT).

"CLT is compressed timber that becomes stronger than steel but lighter than concrete," says Livesey.

"We build the home off-site, then crane it in to replace the old roof. In narrow streets like those in Bondi, we even do it in panels so it can be lifted in and assembled on the roof."

4. Profit share

Profits are usually split 50/50. "The owners don't put any money into the project, but they are financially compensated for selling their airspace," says Livesey.

The profit can be reinvested into the building to cover repairs and upgrades.

"If they make $1 million, but they spend $800,000 fixing the building - new windows, electrics, brickwork - that $800,000 is tax-free," he says.

"Only the rest is taxed if taken as income." Livesey says the benefits can be huge. "First, the strata doesn't need to create a capital works fund anymore. The building is repaired using the profit.

"Second, both the developers and owners profit. We had one project where an apartment worth $600,000 ended up selling for $1.2 million after the works were done."

The importance of advice

Others aren't so sure. Stuart Ayres, NSW chief executive of the Urban Development Institute of Australia, told The Australian Financial Review in June he is not convinced there will be a rush towards securing airspace rights across the city.

"You've got to have some pretty uniquely wealthy individuals to be able to participate in that type of exercise," Ayres said.

Robert Anderson, president of the Strata Community Association NSW, urges homeowners to seek independent tax advice before committing to anything.

"I reckon it's a goer with a caveat of understanding the tax implications, such as capital gains tax and stamp duty," he says.

He also notes the potential disruption homeowners may face due to the remedial works going on.

Can owners do it without a developer?

It's not always developers who sell the airspace. "In half of the 77 projects I've managed, a resident bought the airspace themselves," says Livesey.

"They've sold their ground floor apartment, bought the airspace, developed it, and now they've got the penthouse."

Airspace development sounds simple, but coordinating dozens of homeowners isn't. "I'm kind of the conduit between owners and developers," he says.

"Owners don't have the time, money or experience to develop it. That's why so many apartment blocks are non-compliant and in disarray."

Under strata law, 75% of homeowners need to vote yes. If they don't, the building still needs repairs, usually funded by each owner forking out thousands to a sinking fund.

"Owners managing it themselves need 14 separate votes of 75% approval. But a developer deal needs just one," says Livesey.

Beyond housing and profits

Airspace builds can also work above shops or commercial buildings, according to Livesey.

"We can build green rooftops, gyms, public spaces and more businesses," he says.

Overseas it's also common to open the airspace up for public housing. Buy Airspace is working with Homes NSW, Landcom and Shelter NSW on pilots.

With supply the name of the game for fixing Australia's housing crisis, the message is clear:

"We already have eight of the 10 buildings we need by 2050. The challenge is keeping them standing - and we can pay for that by going up."

When looking at downsizing the family home, it's not just bricks and mortar, it's an anchor for identity, a storehouse for memories and a symbol of stability. Your house says something about who you are, what your story is.

There is pride, effort, and memories in every corner. A memory in every renovation or day in the garden.

When downsizing a business you would think it's less emotional, but it's not. How successful your business has been is often directly correlated to how many people you employ or the physical size of your facilities or global footprint.

Often you've invested money and hours growing, building and maintaining these assets. To downsize can feel like a surrender of sorts.

The word itself has emotional links: downsize feels like downcast, downtrodden, cut down. It's all very down.

Downsizing carries the weight of endings, a sense of shrinkage, loss or compromise, even though the choice to downsize can be about liberation, clarity and living lighter.

So when it comes time to consider moving somewhere smaller, the brain plays all sorts of tricks on us. As a behavioural economist, I see downsizing as a fascinating example of how human psychology intersects with financial decision making.

What's going on in our heads and what can we do about it?

One of the strongest forces at play when downsizing is the endowment effect.

Put simply: we value things more highly just because we own them. That's why you may think your home is worth far more than the market suggests or why the dining table that's been with you for 30 years suddenly feels priceless when it comes time to sell or donate it.

When you catch yourself resisting the idea of letting go, remember that you're not losing a memory, you're buying a lifestyle.

Try reframing it as 'right-sizing'. A way of maximising your assets and space to match life as it is now rather than what it was. This makes the decision feel more like a gain than a loss - and we know how much our brains hate loss.

Behavioural economic research has shown that losses feel about twice as painful as equivalent gains feel pleasurable.

That's why downsizing is often framed negatively: losing space, the garden, the building, staff. But when reframed as right-sizing you start to feel the upside, your focus helps your brain to release the feel-good chemicals by directing thoughts away from losses and toward gains.

Right-sizing becomes more about opportunity and freedom.

Financial freedom, freedom to travel and to do more of what you want and have less clutter and fewer expenses.

But as humans we are still wired to stick with what's familiar, even if it's no longer the best fit in response to our shifting life stage, social changes or market disruptors.

Our status quo bias keeps many of us rattling around in homes or holding on to bloated business practices for far longer than we need; paying unnecessary expenses, mowing lawns no longer in use and heating rooms that sit empty.

For many, the hardest part of downsizing isn't the money or the logistics, it's the identity shift, the loss of things that trigger nostalgic memories, the feeling that all our efforts over the years is somehow being devalued.

A large physical home or business is tied to how we see ourselves: successful, secure, hospitable. Downsizing can feel like a step down.

The trick is to anchor your identity not to the size of your home, but to the richness of your life.

A smaller home might mean more resources to invest in travel, hobbies or helping the children financially. It's not about downsizing to something smaller, it's about resizing to embrace more life and maximise opportunity.

Confront your biases, reframe the narrative and look beyond loss to see the gains.

If you can move past the emotional pull of identity and memories, you'll likely find that the financial, psychological, and practical benefits far outweigh the discomfort of change.

In the end, the most important thing to focus on when downsizing is peace of mind, freedom and being the right size for the current reality.

What to focus on when resizing

1. Financial freedom: How much better is it going to be to reduce bills, debt and ongoing maintenance costs? And what opportunities can greater flexibility and financial freedom bring?
2. Environmental realities: Does the new home or business structure align with the environmental realities that exist for you now, not 20 years ago?
3. Community: Will this change allow you to have more time and be physically closer to the people that matter, such as family and friends, and the activities that keep you connected to your community?
4. Future-proofing: How much happier will you, your family or business be in 10 years time once you've made the change? 

Investors took out more than 51,000 new home loans in the three months to June, which is the highest quarterly figure recorded since late 2021.

"The number of new investor loans has risen solidly in the past two years, after a quieter period when the RBA started raising rates," says Angus Moore, senior economist at REA Group.

"This means investors are now making up a substantial share of new lending."

Close to two in five (38%) new loans taken out in the June quarter were for the purpose of purchasing an investment property - up from the five-year average of 32%.

"Rental market conditions remain very tight, and rents have grown rapidly in recent years. That's likely encouraging investors to buy in," Moore says.

"With markets expecting at least one further rate cut by the Reserve Bank and challenging rental market conditions persisting, strong investor activity is likely to continue over the rest of this year and next."

While the latest lending figures suggest a strong appetite for property investing, that's not to say that there aren't hesitations among existing investors.

A recent survey conducted by the Property Investment Professionals of Australia revealed that 53% of investors would sell up if any changes to negative gearing rule were made, while 25% were unsure.

Where are property investors buying?

While inner city pockets remain popular with investors, a new report from PropTrack (part of REA Group) suggests that buyers are also looking further afield in search of value.

"Affordable areas are also seeing a high volume of investor," the report notes.

"Areas like Wyndham, Tullamarine and Melton in Melbourne's west, Blacktown and St Mary's in Sydney's west, Ipswich in Brisbane's west, Kwinana in Perth's southwest and Armadale in its southeast, are all seeing a high degree of new investor purchases."

In many cases, these are also the types of areas PropTrack has identified as offering some of the best investment opportunities based on metrics such as capital gains, rental yields and renter demand.

For instance, Tumbi Umbi on the Central Coast, Werrington in the Outer West and Austral in the South West, were ranked as the three top-performing investor suburbs for houses in Sydney.

"While yields tend to be lower in Sydney compared to other capitals, many suburbs are achieving strong results across these key investment metrics, boosting demand from investors in the city," the report states.

It's a similar story in Melbourne. PropTrack identified Cranbourne South in the city's South East and the neighbouring suburbs of Meadow Heights and Coolaroo in Melbourne's North West as the three top-performing postcodes for houses.

I have seen suggestions that an interest-only loan is better than principal and interest on the basis that a home increases in value.

Would a good option be to put the difference into super for maximum benefit in the long term? - Norm

This is a really interesting question, Norm. It is relevant to so many people and, while it is a short question, it has a lot of personal complexity.

If a loan is on an investment property, it makes sense to pay interest only as the interest costs, maintenance and running costs of the property are tax deductible.

The key rule of debt repayment is straightforward. Pay the highest rate first, so that means high-interest credit cards, then things such as car loans, possibly your non-tax-deductible home loan and probably not the interest-only investment loans.

Now we'd better clear up 'possibly' and 'probably'. Let's assume your home loan is 6%.

Any principal repayments into your mortgage or a decent offset account effectively earn 6% tax and are risk free. Now this is a good return. If you were a typical taxpayer, you'd need a term deposit paying 10% to match that return after tax.

Bluntly, I also find that despite our best intentions to just pay interest and invest the balance, we actually spend the amount we would have paid into a principal and interest loan. This is not a technical answer, but it is a realistic human answer.

I reckon most of us are better off with a principal and interest loan. Also, your cheapest loan over time is likely to be a principal and interest loan.

Now to a deductible loan. Again, let's use 6% interest, though an investment loan is likely to be higher.

An average taxpayer would be paying about 4% after the deduction, a high taxpayer closer to 3%.

The point here is, can we earn more than the rate we are paying? At 3% or 4% we can.

We'd be better off applying any extra money to our home loan, our super or investments over the long term.

The history of shares, including dividends, shows an average annual return of close to 10%. Super, since the inception of compulsory super, has seen returns in the typical balance fund of 8% to 9%.

My view is to consider your personality and discipline to save and invest, the rate you are paying on a loan, the long-term earning rate on other investments, your attitude to risk and, of course, your personal rate of tax.

This will take you to a conclusion that is best for you.

That will come as disappointing news to renters who, after a lull in growth at the end of 2024, may have been hoping for an extended reprieve after a few years of sizeable increases in the cost of renting.

Cotality's latest quarterly data reveals that national rental prices rose by 0.8% over the three months to September and 4.3% over the year.

While that quarterly growth figure was actually down, Cotality notes that this was largely due to seasonal factors. But when adjusted for seasonality, it was the largest quarterly rise since June 2024.

Kaytlin Ezzy, an economist at Cotality, says that growth in rental prices is being driven, in part, by a shortfall in the number of homes that are available to rent.

"Ongoing scarcity in 'for rent' listings, coupled with continued strength in rental demand has pushed the national vacancy rate to a record low of 1.47%- less than half the pre-COVID decade average of 3.3%.

"Limited supply continues to be a major catalyst in rising rents, with the number of rental listings tracking approximately 25% below the previous five-year average nationally for this time of year.

"Supply is particularly tight in the unit sector, especially in Sydney, which recorded both a new record low vacancy rate across its unit sector and broader dwelling rental market in September."

Where are rents rising fastest?

Australia's smaller capital cities led the way on growth, with rental prices in Darwin rising 7.6% over the last 12 months and prices in Hobart rising 6.2%.

This, Cotality notes, is a shift from the post-pandemic trend which had seen growth rates in both markets well behind that of the larger capitals.

The cost of renting a home in Brisbane and Perth also ticked up, with both cities recording increases of 5.6% over the past year.

However, the rate of growth in regional areas outpaced most capitals in the 12 months to September. This, Ezzy explains, has reduced the rental affordability gap between metro and regional Australia.

"With the regions outperforming the capitals through the second half of 2024 and into 2025 the affordability advantage offered by regional rental markets has reduced from $123 in May 2024, to $111 in September."

Cheapest suburbs in each capital city to rent in

With the median weekly rent being paid across the capital cities now more than $700 per week, there's no question that renting is getting more and more expensive.

However, the difference between the most and least affordable suburbs in each of the major cities is also sizeable.

In Sydney, for instance, the median rent charged for a home in Vaucluse is $2148 per week compared to $550 per week for a home in Shalvey.

So, which are the most affordable pockets to rent in? Here are the five cheapest suburbs in each city, according to Cotality.

Who will really benefit from the expanded 5% deposit scheme?

Unlimited places, higher property price caps, and no income limits.

There's plenty of upside to the 5% deposit Home Guarantee Scheme (HGS), which was expanded this week, enabling more first home buyers to purchase a home with as little as 5% deposit.

It's welcome news for first home buyers battling poor housing affordability.

But the real winners may be buyers who get in early.

Analysis by the Insurance Council of Australia (ICA) estimates the expanded HGS could see house prices rise up to 10% over the next 12 months in markets that typically appeal to first home buyers.

This uptick could far outstrip the scheme's savings on lenders mortgage insurance.

Research group Cotality says high levels of demand are likely to be concentrated around the new price caps in the coming months.

Cotality's research director, Tim Lawless, says, "We could see the value of houses in well-located areas, recently unlocked by the expanded caps, surpass those new price caps quite rapidly."

$25 a week: Are your kids getting market-rate pocket money?

New data from Westpac reveals the nation's under-18s are receiving an average of $25 in weekly pocket money.

That's almost three times the pocket money their parents earned as youngsters.

But for plenty of Aussie kids, pocket money is no freebie.

Over half (55%) have to earn their pocket money by ticking off various household chores.

"Parents who are balancing a family budget know firsthand how important understanding money is - and are giving their children pocket money to teach responsible spending and saving from an early age," says Chris Brell, Westpac's managing director of everyday banking.

The Westpac banking app includes a 'Chores' feature (possibly much-maligned by the small fry), which helps parents know if their children have completed a chore.

But realistically, most mums and dads will know if the family pooch hasn't been fed or the dishwasher hasn't been emptied - chores often allocated to children.

That said, Brell notes parents who use tools such as a savings calculator "can help kids put safe spending and saving into practice, backed by robust parental controls."

More Aussies use unit pricing but stores don't make it easy

There's a lot to love about unit pricing - the fine print on shelf labels that shows how much a product costs using a standard unit of measurement.

The good news is that a survey by consumer group CHOICE found almost half of shoppers are comparing unit prices to help save money - an increase from 2022.

The catch is that only 61% of people say unit pricing is helpful, down from 71% in 2022.

Supermarkets don't always make it easy to use unit pricing.

One in three (32%) shoppers said unit prices were obstructed or covered.

Two in five found unit pricing text small or difficult to read, with the same proportion reporting inconsistent units of measurement.

CHOICE senior campaigns and policy advisor, Bea Sherwood says, "When we showed shoppers product images without unit pricing, only 63% chose the best value product.

"When unit pricing was included, this increased to 76%, highlighting that unit pricing still remains one of the most valuable tools to save on groceries."

Sherwood hopes a government consultation paper on unit pricing will lead to a "crack down on supermarkets doing the wrong thing and undermining the consumer's ability to choose the best value product."

Watt's it worth? Solar boosts property values by $23,000

It can take five to 10 years for household solar systems to pay for themselves, with smaller 3kW systems potentially cutting $600 a year off electricity bills.

But according to a new Cotality report, the rewards of solar can go a lot further than bill savings.

It claims that installing a solar system can bump up a home's value by 2.7%.

That equates to a $23,100 rise in a property's value nationally.

How does this compare to the cost of installing solar?

According to Solar Choice, you could pay as little as $3170 for a 3kW system in Perth, or up to $14,960 for a 10kW solar system in Darwin.

Solar is fast becoming mainstream though take-up varies widely, ranging from 40% of houses in Perth, Adelaide and Brisbane to less than 20% of houses in Hobart, regional Victoria and regional Tasmania.

Older women face retirement poverty - and it's not just the pay gap

A new report from the Super Members Council suggests that women - especially single women, can be at risk of facing a retirement mired by poverty.

Women aged 60-64 have median super savings 25% lower than men of the same age.

One in ten women in this age group have no super at all.

Historically, the gender super gap was believed to be driven in part by the gender pay gap.

But the Super Members Council study shows common later-in-life events such as separation, unpaid caregiving for older relatives, and family violence are significantly more likely to force women into early retirement or part-time work.

Those life events dramatically erode women's ability to save for retirement, and could mean having up to $95,000 less in super in retirement.

Super Members Council CEO Misha Schubert says the report is a wake-up call for policymakers.

She warns, "Without urgent action, generations of Australia's lowest-paid women risk poverty in retirement."

So how can buyers identify hotspots early?

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Abdullah Nouh, founder of Melbourne buyers' agency Mecca Property Group, to discuss the features that investors may want to look for in a location and individual property.

00:00 Introduction

01:33 Key indicators of growth suburbs

04:24 Spotlight on Melbourne, Perth and Darwin

08:14 Traits of a good investment property

11:38 Additional tips for property investors

14:25 Conclusion

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Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, superannuation, property, and other strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

Opal Tower. Major defects. Non-compliant.

Words that send a chill through any buyer eyeing a new build or off-the-plan apartment.

From concrete cancer and flammable cladding to dodgy builders going bust, Australia's residential construction sector is beyond notorious.

Are new homes in Australia compliant?

Zeher Khalil, veteran building inspector at Site Inspections in Melbourne, has seen it all.

"People say, 'Can you show us a video of a house that's actually compliant, so we know what good work looks like?' I tell them, 'Find one and I'll do the inspection for free'," he says.

Dressed in his SWAT-style Swiss-Army-Knife-like vest equipped with every tool of the trade, Khalil, the TikTok Inspector who goes around the country inspecting homes, has amassed an online following.

And his verdict?

"The percentage of new builds in Australia that are guaranteed non-compliant is 100%. I wish it wasn't true, but it is."

It's hardly a glowing endorsement of an industry now expected to pump out 1.2 million, potentially defective, new homes in five years, just as trust in the sector hits rock bottom.

 

 

 

 

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Why do Australians distrust the construction industry?

Only one in three (32%) Australians has a positive perception of the construction industry, according to research by Equifax released in October 2024. Forty percent say their opinion has worsened since the year before and 20% say it will worsen over the next 12 months.

"After housing affordability, the biggest barriers to buying, building or renovating a property in Australia all relate to people's perception of the construction industry," says Brad Walters, head of product and rating services at Equifax.

Of course, this distrust isn't just a perception problem, but the result of years of non-compliance leaving its mark.

"We're talking about everything from non-existent water-stops in shower recesses, to completely defective frames that need to be demoed and started again," says Khalil.  "The cause can be anything from builder oversight or laziness to criminal negligence."

The consequences are often more than cosmetic.

"Some non-compliant building elements can mean [a person's] home is literally not fit for occupation - in other words, dangerous," says Khalil.

"Down from there, you've got a lot of non-compliant items that mean the building is subject to flooding, leaks, mould, infestation, further damage... the list goes on, but they're all things that will - quickly or slowly - affect the consumer's enjoyment of their home."

The cost of non-compliance is eye-watering. In NSW alone, defects add up to $700 million a year. A multi-university study of 346 Australian construction projects found that over a period of six years, 19,600 rework events were needed to fix defects, costing, on average, 39% of the original contract value.

Why are so many Australian builders going bust?

Meanwhile, the industry itself continues to struggle despite costs bottoming out.

Cotality (formerly CoreLogic) data shows that home construction costs grew just 0.4% nationally over the March quarter, the slowest rise since 2010.

The slowdown follows two consecutive quarters of 1.0% increases, bringing the annual rise in construction costs to 2.9% over the 12 months to March 2025.

The annual change in home building costs has been tracking at or below the pre-Covid decade average of 4% since the September quarter of 2023.

But while growth has eased, Cotality's Tim Lawless says the cost to build a dwelling is still rising from an already high base.

"The 31.3% jump in construction costs since the onset of Covid-19 five years ago has created ongoing liquidity and feasibility challenges for builders," says Lawless. "Similarly, competition with the booming infrastructure sector for skilled trades is likely to persist for several years at least."

Furthermore, thousands of builders each year continue to go bust.

In FY2022-23, the collapse of big names put the issue on the front pages. Since then, another 6251 construction companies have folded, according to Australian Securities & Investments Commission data.

In a statement, Master Builders Australia said that the delivery of new homes has been obstructed by ongoing and overlapping challenges. Tradie shortages, planning delays, costly regulation, unfeasible lending practices and unfair risk allocation all compound to make projects unsustainable.

Khalil says it's no excuse for shoddy work.

"Compliance is meant to provide a minimum standard that builders need to meet," he says.

"We have the right to expect our homes to be safe and healthy to live in, and to last a good amount of time. Non-compliance generally refers to elements that threaten those aspirations."

Who's fixing the problems in the construction industry?

Government and industry haven't exactly stood by watching the construction industry's problems slowly collide with the housing crisis.

But reform takes time.

After a series of major fires, the Building Confidence Report was commissioned in 2017 to set out best practice for regulating the sector. Also called the Shergold-Weir report, it was published in 2018, laying bare widespread regulatory failure. It made 24 recommendations.

The Australian Building Codes Board then developed a national implementation plan, which was finalised in 2021. But because building regulation is a State and Territory responsibility, progress has varied wildly.

Victoria made the latest move, passing the Building Legislation Amendment (Buyer Protections) Bill 2025 into law in June.

Its headline act is a new one-stop shop watchdog, the Building and Plumbing Commission (BPC), merging registration, insurance and dispute resolution under one roof.

Khalil says that the bill hopes to address the State's "chronically underperforming and often totally impotent building regulator", which had been the Victorian Building Authority.

"It seems traditional for any government entity to justify their underperformance by saying they don't have enough powers, and thus this Bill gives them some more levers to pull on builders and developers in certain circumstances," he says.

"Some of the levers are undeniably useful for the regulator."

What changes are coming to the building industry in 2026?

Key changes kick in from July 2026:

• Builders must fix defects for up to 10 years, even if the home's been lived in.
• No occupancy permit until defects are fixed.
• Homeowners can claim insurance as soon as a defect is found, not just when the builder dies, disappears or goes broke.

That last rule is a big one. Right now, Khalil says, the system is designed to push homeowners into costly private litigation.

"You can only claim government-funded insurance if your builder dies, disappears or goes bankrupt," he says. "That actually means: if the builder's still alive, you can find him and he still has money, then it's up to you to sue him in civil litigation, at your own cost."

"Sometimes the builder goes bankrupt, but again, it's more likely that he's just buggered off and is still building 12 other projects and does not give two hoots about you and your house."

"In that case, insanely enough, the government will not help you. You have to sue the builder. And that's going to cost you hundreds of thousands of dollars, which you probably don't have - meaning the builder is off the hook."

Khalil says the amendment takes some of the responsibility back: "If the builder has been proven to have done non-compliant work, the regulator/insurer (now one body) will pay the homeowner to get the work fixed, and then the regulator will go after the builder instead of making the homeowner do it."

Developers will also have to post a bond of up to 2% of total construction costs for apartments, held for two years to cover defects.

What is the building industry saying?

Unsurprisingly, the industry hates it.

Master Builders Victoria (MBV) and the Housing Industry Association (HIA) slammed the law as unfair and unworkable, claiming it heaps too much risk on builders already facing high costs and skills shortages.

HIA executive director Keith Ryan called it "legislative madness and totally unfair".

"Where is the logic when under these new rules, a builder could potentially be at risk of being subjected to a rectification order a decade or more after they've finished the job?" he says.

But Khalil says we need to move the needle on consumer protections.

"Surely the bottom line of all of this is that what's been going on all this time is unacceptable," he says.

"There's an epidemic of non-compliant, defective, poorly built houses and apartments that thousands of homeowners are being lumped with every year, and a jellyfish regulator who isn't doing enough to protect them."

Many argue, however, that the problem isn't the laws, but the lack of enforcement.

"We're concerned that this legislation is being rushed through, when there is already a raft of existing consumer protections, albeit they are not always appropriately enforced and in a timely manner," says MBV chief executive Michaela Lihou.

On that point, Khalil agrees.

"The fact is that the authority has not been applying existing laws satisfactorily in many cases. We'll see if things change."

Is the building industry being overhauled in other states?

Of course, these aren't exclusively Victorian issues.

NSW is about to overhaul its building laws through the NSW Building Bill 2024, which aims to streamline nine existing Acts into one and provide clearer rules for builders and developers. It's expected to become law later this year.

However, the NSW government has also delayed some planned building-regulation changes, including raising the strata building bond from 2% to 3%, pushing them to next year.

In South Australia, the government has just completed community consultations on new rules for developers, calling it the biggest review in more than 20 years.

On July 2, the Western Australian government announced it will review its home-building contract laws to make sure residents are properly protected when building or renovating.

Khalil, who mainly works in Victoria, says broader reform is long overdue.

"From what I've seen and heard in other States, it's just as bad, if not worse. The specifics change a little depending on what scope the local authority has, but the big picture is that the building industry in every State is poorly regulated."

What do homebuyers need to know?

For buyers, Khalil says ineffective government regulation means that the backstop they think they have does not always exist.

"Your average buyer or homeowner assumes there's a government safety net underpinning everything, so that if a builder does something unconscionable, dodgy, fraudulent, negligent or dishonest, the regulator will have the homeowner's back," he says. "This is just not the case."

"The regulator's behaviour, in these cases, is often to triage the homeowner's complaints through a neverending labyrinth of bureaucracy that goes nowhere, or even worse, to completely ignore them. And in cases where they do investigate an issue, they tend to either wrap it up quickly and say 'nothing to see here', or drag it out for so long, the suffering of the homeowner is magnified."

Khalil says buyers should assume that no one is coming to save them.

"They should do their due diligence at every single step of a process (buying, building, renovating), get the relevant inspections, legal advice and so on along the way, and cover their arse in case it all goes pear-shaped."

"My last tips: don't pay the builder too much too early and learn the basics of negotiation."

The 2025 Annual Property Investor Sentiment Survey by the Property Investment Professionals of Australia (PIPA) found 53% would stop investing if negative gearing was altered, while another 25% were unsure. Only 22% said they would keep investing under new rules.

Under negative gearing, if your rental property costs more to run than it earns, you can claim the loss as a tax deduction. Critics argue it pushes up house prices, while supporters say it keeps rental supply flowing.

The debate has reignited after a separate report by housing campaign group Everybody's Home estimated tax breaks for short-stay properties like Airbnb and Stayz could cost the federal budget up to $556 million a year.

It is calling for an end to negative gearing on new investments, a phase-out of deductions on existing ones, and the removal of the CGT discount.

"Tax breaks need to be wound back for all investors, but it's even harder to justify giving these generous benefits to short-stay operators," says Everybody's Home spokesperson Maiy Azize.

"The system is propping up investors who are speculating on short-term rentals during the worst housing crisis in living memory," Azize says.

But PIPA chair Lachlan Vidler warned the sector is already fragile.

"Our figures show a clear erosion of confidence," he says. "The mere suggestion of changes to negative gearing or CGT is enough to destabilise investor sentiment."

Shrinking rental stock

Investor exits are accelerating. The PIPA survey found 16.7% sold at least one property in the past year - the highest level since the survey began in 2022.

The survey found that only 42% of sold properties remained in the rental pool because they were bought by other investors.

Meanwhile, 37% were purchased by owner-occupiers and 25% by first-home buyers, effectively removing them from rental circulation.

Equally however, these owner-occupiers wouldn't be competing for rental properties any more - though that is far from the only factor driving demand.

Vidler says Australians are watching the "slow dismantling" of Australia's rental supply, and tenants are paying the price through rising rents and reduced availability.

"This isn't just a continuation of last year's trend - it's an acceleration," he says.

Interestingly, it's seasoned investors who are choosing to exit the market. Out of those who had sold, more than half had held their property for at least five years, with the most common holding period being 10 to 20 years (30.7%).

Vidler says the implications for renters are severe.

"The private rental market is losing stock at a time when demand is surging, and policy uncertainty is only making things worse."

State reforms add pressure

Federal tax policy isn't the only concern among investors, with state-level reforms weighing them down.

PIPA found 64% of investors were unaware of Victoria's new vacant residential land tax, while 60% admitted they had limited knowledge of tenancy law changes nationally.

"This is a failure of engagement," Vidler says. "Investors are being asked to navigate increasingly complex regulatory environments with little support or clarity."

More than a third of investors now believe it's a good time to sell, citing the risk of federal reforms (51.3%), rising compliance costs (49.8%) and state charges such as land tax (49.8%). Concerns about rental caps also rose to 37.1%.

"These results reflect a broader unease among investors who feel they're being squeezed from all sides," says Vidler. "If this trend continues, we'll see even greater strain on the rental market, and tenants will bear the brunt."

Fragile optimism

Despite the gloom, almost 60% of respondents still see the next 12 months as a good time to invest.

"There's still belief in the fundamentals of property investment, but that belief is more fragile," says Vidler.

"If governments want to preserve the integrity of the rental market, they must listen to investors, provide clarity, and avoid knee-jerk reforms that risk doing more harm than good."

I'm getting a lot of information about financial advisers who charge a fee to explain how to pay off your home loan within 7-10 years.

I'm 58, have a mortgage of $650,000, not including interest, with 22 years left on the loan. Our household has a combined income of $250,000.

My loan is linked to an offset account and has a redraw facility and the majority of our net income goes into the offset where the mortgage is drawn from.

I want to start paying an extra $500 week directly into the mortgage, do I put everything into the mortgage and draw 
from the redraw facility?

I may only have seven years left before I look at retirement. It would be great to pay down the loan as much as I can.

It seems like there's a big secret to paying it down that nobody wants to tell you unless you pay for the privilege. - Sven

Ha ha, good one, Sven. You are spot on, there is absolutely no secret to paying down a mortgage or, quite frankly, pretty much anything to do with the basics of money.

I have looked at a few of the financial advice groups 'offers' about paying down your mortgage and, while I see absolutely no reason to pay anyone to do simple things, most that I have looked at are quite sensible.

The most common offer, for a fee, seems to be budget control. This I agree with, but for heaven's sake, we can do our own budget and cut out waste and plan to generate savings that go straight into the offset.

Most will recommend you do other sensible things, such as have your salary go into your offset, and use a credit card that is paid off in full before the interest-free period expires, usually around 55 days.

Mainly online, I do see some people offering crazy stuff. One is to gear up to buy shares, which historically, over the very long-term return, have returned above the interest cost of your mortgage.

The idea is you make higher returns from your shares, sell in the future and pay off your mortgage. Technically, this is historically true, but the promoters conveniently forget to mention time, risk and tax.

Regular payments into your offset account are as close to risk free as you can get. In the short term shares are downright risky. They also 'forget' that returns from shares in the form of dividends and growth are taxable.

Money you put into your mortgage via an offset account is my preference, it effectively earns the rate of interest on your mortgage, tax free.

On a risk-adjusted basis, this sales pitch to buy geared shares is just nonsense, though it can make the promoters high fees.

So, there is no big secret and no need to pay anyone. Control your spending through a budget, pop the surplus into your offset account.

When this scheme was originally introduced, it only allowed citizens to be able to buy and you had to either be an individual or in a de facto relationship or married.

Now, what the first Home Guarantee allows is individuals, siblings, friends, all more than two people to come in together and purchase a property with just a 5% deposit.

Now, why the 5% deposit part is important is in previous years, if you had less than a 20% deposit, you would have to pay something called lenders mortgage insurance when purchasing your first home, which is an insurance that protects the bank because these types of loans were considered risky.

You were able to avoid this insurance if you had a parent or a sibling come in as a family guarantor and allow you to purchase a property, meaning that the property would be used to guarantee the mortgage. Instead, now the federal government comes in to make the home loan less risky and allows the borrowers to get  into the market sooner.

"Tag someone looking to buy their first home, because from October 1, every first homebuyer can get into their home with just a 5% deposit," Prime Minister Anthony Albanese said at a press conference in August.

The federal government has fast-tracked the expansion of its Home Guarantee Scheme (HGS) by three months. From October, Housing Australia says:

• No place limits: all Australian first homebuyers with a 5% deposit can apply.
• No income caps: higher-income earners will be able to access the scheme.
• Higher property price caps: raised to reflect today's housing market.

The scheme lets buyers purchase with just a 5% deposit and avoid lenders mortgage insurance (LMI), potentially saving up to $40,000.

Not everyone is cheering.

Joseph Daoud, mortgage broker and founder of It's Simple Finance, says while the LMI savings are real, stamp duty remains a major hurdle.

"The Prime Minister's comments haven't included one little thing," Daoud says.

"The maximum price caps are now higher than stamp duty concessions in every single state. So, it's not just the 5% deposit - it's the deposit plus stamp duty, which in most states is just as high as the deposit."

Raised caps vs state concessions

The higher price caps were meant to give buyers more breathing room in expensive markets.

Take Sydney, with a median home price close to $1.2 million, the old $900,000 cap often locked first homebuyers out of accessing the scheme.

Lifting it to $1.5 million looks generous on paper as it's well above the city's median.

The problem is state-run stamp duty concessions haven't kept up. In New South Wales, the full exemption only applies to homes up to $800,000, with partial concessions up to $1 million.

If you buy a home in NSW at the new $1.5 million cap, you'll need:

• 5% deposit: $75,000
• Stamp duty: about $67,000

Yes, you might save around $40,000 on LMI - but unlike LMI, which can be rolled into your loan and repaid over time, stamp duty is paid upfront.

Now you're looking at $142,000 - an unrealistic scenario for many first homebuyers.

Of course, NSW, being the second-most expensive market in the world, is an extreme example. But as the table below shows, the same is true across the states and territories:

How first homebuyers can save on both LMI and stamp duty

There is a way first homebuyers can dodge both LMI and stamp duty, even in New South Wales.

The irony is they would have to purchase under $800,000 - the same amount as the previous price cap and the very bracket many have already been squeezed out of.

That undermines the whole point of lifting the caps and scrapping income limits, which were set at $125,000 for singles and $200,000 for couples.

While this was supposed to help higher earning first homebuyers compete in more expensive markets, they may be priced out all the same.

Opinions split on First Home Guarantee

Stamp duty aside, industry groups have broadly welcomed the changes.

Both mortgage broking associations - the Finance Brokers Association of Australia Limited (FBAA) and the Mortgage and Finance Association of Australia (MFAA) - say the expansion would help first homebuyers access a wider range of lenders and better navigate their options.

"We welcome the broadening of lenders, including smaller, customer-owned and regional banks," says MFAA CEO Anja Pannek. "It's crucial that the scheme operates with lenders who partner with mortgage brokers."

Mortgage brokers already facilitate most scheme places, with 77% of HGS loans coming through brokers in the last financial year, according to Housing Australia.

FBAA managing director Peter White agreed: "First home buyers may not be aware that there are many lending options available and while the big banks offer solid products, they are not always the best option for every buyer."

"Do your homework and consider what is best for you in terms of rate, terms and the way the loan is structured."

The Australian Banking Association also backed the scheme, with CEO Simon Birmingham calling it a 'welcome boost" for many first homebuyers.

But this "boost" is exactly what some critics are worried about.

A review by Lateral Economics estimated the expansion of the HGS could push up home prices by as much as 10%, as more buyers compete for a limited number of properties.

The government disputes this, pointing to Treasury modelling that forecasts a far smaller impact - just 0.5% over six years.

But even a modest rise comes with another risk: first homebuyers taking on bigger loans and heavier repayments.

As Dale Gillham, analyst with Wealth Within warned, the scheme isn't a housing dream, but a "debt trap dressed as policy".

"If you're going to take advantage of this scheme, don't treat it like a once in a lifetime sale. This is your first rung on the ladder, not the dream home that bleeds you dry. Buy conservatively, leave a buffer, and avoid maxing out your borrowing," he wrote in Money.

"History is clear: in every bubble, it's the overleveraged who get crushed first. Don't be one of them. This isn't the season for FOMO, it's the season for caution."

The latest data from research firms Cotality and PropTrack shows that property price growth accelerated during August, just as buyers and sellers are gearing up for the busy spring property season.

National home values rose by 0.7% in August according to Cotality - the largest month-on-month increase since May 2024. Over the last 12 months home values have risen 4.1%.

Meanwhile, PropTrack found that national home values rose by 0.5% over the course of August and are 4.9% higher than they were 12 months ago.

Tim Lawless, Cotality Australia research director, says that the recent growth has been driven by a combination of increased buyer confidence spurred on by falling interest rates and ongoing supply constraints.

"Once again we are seeing a clear mismatch between available supply and demonstrated demand placing upwards pressure on housing values."

Capital city prices expected to keep rising

Unsurprisingly, given the consistent growth trend in recent months, the median home value in Australia has reached yet another record high according to both Cotality ($848,858) and PropTrack ($835,000).

It's been more of a mixed bag for price growth across the capital cities.

Brisbane, Darwin and Perth were among the standout markets for growth during August, while Hobart was the only capital to record a decline in home values.

Darwin has been the real frontrunner over the last 12 months though. The city is now the only capital with a double-digit annual growth rate.

Going forward, Eleanor Creagh, senior economist at REA Group (owner of PropTrack) expects that prices will continue to tick upwards.

"The combination of lower interest rates, increased borrowing capacities and improved sentiment is expected to continue to drive demand," she says.

"Constrained new housing supply, strong population growth and the expansion of the Home Guarantee Scheme from October will also maintain upward pressure on prices.

"As we enter spring, the housing market appears poised for another leg higher, albeit strengthening in some capitals while normalising in others."

Are buyers or sellers in the box seat this spring?

Heading into one of the busiest times of the year for property transactions, Lawless notes that relatively low stock levels and high clearance rates indicate that sellers are entering spring in a strong position.

Across the combined capitals, Cotality recorded a final clearance rate of 70% over the weekend of August 30 and 31 - the highest rate since February 2024.

However, buyers are likely to see more options crop up in the weeks to come as the spring season kicks into gear and more homes are put up for sale.

"We are starting to see the usual start of spring upswing in new listings coming to market, but from a low base," says Lawless.

"A pick up in the flow of stock coming to market through spring will be good news for buyers who generally have limited choice at the moment."

Interestingly, the latest Residential Property Index from NAB suggests that there is a degree of confidence among some home buyers heading into spring.

The index, which measures housing market sentiment, has reached its highest level in the past year, with NAB noting that buyers in the ACT and Victoria are particularly optimistic at present.

In 2025, however, energy-efficient housing is no longer a niche ambition, but a mainstream expectation.

Not only are buyers open to the idea, they're actively seeking homes that offer comfort, cost savings, and a better all-round performance.

The rise of energy-efficient features

According to Domain's 2025 Sustainability in Property report, more than half of all houses sold this year included at least one energy-efficient feature in the listing. For apartments, it was more than a third.

Among the most common inclusions are solar panels, double glazing, energy-efficient appliances and EV chargers, particularly in new builds.

While demand for environmentally friendly homes is on the rise, Cecille Weldon, founder of Future Agent and a leader in agent education, says the market is still grappling with how to talk about and identify energy-efficient properties.

"The label 'sustainable' itself is a barrier," she says.

"It doesn't resonate meaningfully or consistently with buyers and renters. And it can be slightly misleading, because energy efficiency delivers benefits that go well beyond environmental impact."

She points to a gap between the different features properties offer and how they are marketed. Too often, 
terms like 'sustainable' are used loosely, without clear reference to performance or comfort.

Weldon says this makes it harder for consumers to understand energy efficiency and tangible lifestyle outcomes.

"These features deliver multiple benefits such as ongoing affordability, year-round comfort, and even health improvements," she says. "More than that, they attract a premium in the market when they're showcased effectively."

Seeing the light

That premium reflects a broader shift in buyer expectations, away from cosmetic features and toward performance.

Weldon says the most effective upgrades continue to be insulation, appropriate external shading, heat pump hot water systems, and reverse-cycle split system air-conditioning - features that make a measurable difference in both liveability and long-term value.

Findings from Amped Up, a national energy performance report released by Cotality (formerly CoreLogic), back up Weldon's observations.

The report confirmed that ceiling and wall insulation, high-performance glazing, draught sealing and shading are among the most effective ways to reduce how much heating and cooling a home needs to stay comfortable year-round.

These upgrades are proven to not only improve star ratings but increasingly influence buyer interest and property resale outcomes.

The Amped Up report also pointed to stark regional variation, with older housing stock in colder climates, in particular Victoria and Tasmania, underperforming significantly, while newer estates in outer metro areas consistently hit 5-6 stars.

"These measures shift the underlying performance of the home in a way buyers are beginning to understand," 
says Tom Coad, Cotality's head of banking and financial services.

"In colder States like Victoria and Tasmania, there is a high volume of older housing stock with poor thermal performance, many homes sitting below three stars. In contrast, newer estates in outer metro areas often achieve five to six stars due to more recent building codes."

The suburb of Molonglo in the ACT, where energy ratings are mandatory, has the highest median star rating in the country at 6.1 and Coad believes the ACT's benchmark is a sign of things to come.

"We've seen in ACT that poor ratings become a factor in negotiation and days on market," says Coad.

"Owners will need to weigh the cost of improving their home's comfort and efficiency against potential discounting - and that in turn will drive demand for affordable upgrade pathways, something we're working to support."

Buyers are already sharing their expectations, according to Thomas McGlynn, chief executive of Sydney-based agency BresicWhitney, with interest in sustainable homes increasingly front of mind and extending well beyond environmental concerns.

"It now extends to health, lifestyle and how a space enhances daily living.

"In newer homes, buyers now expect features like solar panels, energy-efficient appliances, improved thermal comfort, and EV charging capabilities. In older homes, the focus shifts to understanding what upgrades have been made, and the potential for further improvements," says McGlynn.

"While there isn't firm data yet to show these homes sell faster, that may change as the value placed on sustainability features continues to rise, especially across Sydney's lifestyle suburbs where there is consistent demand for quality homes."

Domain's figures show that houses with energy-efficient (EE) features sold for 14.5% more than comparable non-EE listings in 2025. EE units attracted a 12% premium. These homes also drew more attention online, generating up to 13.8% more views.

For investors, energy-efficient upgrades such as insulation, heat pump hot water systems and reverse-cycle air-conditioning become a strategy for protecting long-term value.

"These features deliver a future-proof property investment, ensuring good rental return and capital value when it's time to sell the property," says Weldon.

She also recommends that all property owners keep records of energy-efficient features because receipts and warranties will become key verification documents at the point of sale.

The full package

Whether it's a compact apartment or a custom build, more buyers are seeking homes that are cheaper to run, more comfortable to live in, and built with long-term performance in mind.

And the transparency around energy efficiency won't always be a nice-to-have, but will eventually become the standard in all property conversations.

"Within the next few years, ratings will start to feature more consistently in listings, particularly as buyers begin to expect this transparency," says Coad.

"This is not an overnight shift. But the direction is clear, and both industry and consumers are moving towards greater visibility of energy performance."

Best ways to boost the energy performance of older homes

• Ceiling and wall insulation
• High-performance glazing
• Draught sealing
• Shading and passive design
• Orientation for natural heating/cooling

Source: Cotality

I'm 64 and my wife is 59.

We own our home, have two investment properties, which are rented out, plus a vacant block of land that I bought around 38 years ago as an investment, and we both have some superannuation. 

We have a small loan on one of the rental properties - about $300,000.

I am looking for advice about the best way to set ourselves up for retirement. Neither of us is working currently, having semi-retired. 

I am thinking of selling the vacant block of land to pay off the debt. My main concern is around the remaining two properties. 

Should I look to:
1. Sell the older of the two properties, which is 59 years old? The house is valued at about $1 million with a rental income of $620pw. Then we could put the proceeds into a savings/investment account and live off those plus the income from the other rental and super, or
2. Sell both remaining properties and live off the proceeds and super? The second property is a duplex valued at $850k, with a rental income of $960pw, or
3. Consider another option?

I would also appreciate your advice on how to minimise capital gains tax (CGT). - Jim

Jim, you have built a very good asset base with your home, two investment properties, vacant land and some super.

Property has been an excellent investment. This is hardly a surprise when we look at population growth. When I was born in 1955, the population was some 9.2 million. Today it is approaching 27 million.

The pressure on property prices would be nowhere near as significant if a greater percentage of our land mass was appropriate for large towns and cities. The reality is we cluster around our coastline and inland areas with productive land and reasonable rainfall.

Property is a simple asset; in that it is driven by supply and demand.

We have a limited supply of land with the infrastructure needed for modern life: schools, hospitals, entertainment, restaurants and cafes. Add a near tripling of our population over the past 70 years to a scarce supply of land and the obvious happens. We are one of the world's most expensive countries to buy a home.

Australia's favourite asset

This, plus tax breaks, has made property Australia's favourite asset. Our tax system favours growth assets over income-producing assets. With property, the name of the game is capital growth. On income we earn, tax, including the Medicare levy, is payable at nearly 50% for high-income earners.

But with investment property, we get to deduct our expenses including interest, and we get depreciation allowances.

Then, whenever we sell, we get a 50% tax discount on any profits we make. On our family home, there is no tax on its sale or, unlike other countries, death duties when we die.

Property is blessed with tax breaks, great for us Baby Boomers, but the tax system favours us and makes home ownership hard for the generations that follow.

Property and other growth assets, such as shares, are ideal for wealth creators.

But for retirees, property can be a bit of a dud.

Vacant land

Let's look at your vacant land. If it is well located, I am sure it has grown in value. But it does not send you a cent of income. In fact, it costs you money to hold it.

Vacant land is a great way of making our grandkids rich. We hold it for decades, pay rates and maintain the land, with the next generations often the beneficiaries.

I agree with you. I'd be looking at selling the vacant land, pay the discounted CGT, pay off your debts and invest where you get better income returns.

I do not know where you hold your property and its growth potential, but the 59-year-old house does not look like a great retirement asset to me.

The rent is about $32,000. Take out all your costs, rates, possibly land tax, insurance and the maintenance that comes with an old property and you'd be lucky to be earning much more than 2% in income. I'd be considering selling that and buying more appropriate retirement assets.

The duplex sounds better to me. Rent is a handy $50,000 or so, and with a duplex, expenses must be lower, and the income return on the $850,000 valuation is pretty good. Maybe that is a keeper? It would generate inflation-linked income and its value should keep pace with inflation.

Another problem with property is its relative illiquidity. Unlike shares, where you can select a portfolio generating a solid income stream with tax advantages from franked dividends, and sell a small part of your portfolio, a property is an 'all in' investment. You own all of it or none of it!

However, if you do decide to sell the vacant land and the old house, you would not only earn more income, but have good access to parts of your capital if required. I would think that holding the property that has better yields could be good diversification and provide decent returns.

Planning is necessary

I agree planning CGT is very important.

But this you must do with your adviser or accountant. I do not have all the details that are critical to this decision, such as: whose name each property is held in; what your tax rates are now and into the future; and whether you have any capital losses.

I can make general points, such as that it probably makes sense to spread sales over a few financial years, so you don't get a significant slab of CGT profits being added to your income in any one year. But this is a critical issue for you both.

Tax planning around any sales you make requires a meeting with your tax adviser to determine the best strategy. I'd also be having a careful look at whether you can top up your super with any sale proceeds.

Super is a fabulous retirement asset. You only pay low rates of tax inside super. If you opt for a pension, subject to restrictions around how much you have in super, your earnings may be tax free.

In retirement as a 64-year-old you can take money out tax free, with your wife at age 59, not far away from that. So, while planning to minimise CGT, chat to your adviser about how you may be able to add to super with cash you free up.

You and your wife have built an excellent pool of assets. Now is the time to capitalise on this, but before you do anything, talk to an adviser with skills in tax and super. Planning will cost you money in professional fees, but the benefits will be very high.

I do hope that you enjoy the rewards from the years of work you and your wife have put into building up such a good pool of assets.

Remember, there is no point being the richest person in the graveyard.

Have a question for Paul Clitheroe? Submit it here.

What is home loan serviceability?

Lenders essentially make a business investment every time they loan money to home buyers. As such, they need to work out whether you're a safe bet, and they do this by assessing your home loan serviceability.

It's not just for the bank's sake, either. If you get a loan and can't pay it back on time, your capacity to get other loans down the track will be harmed due to chequered credit history.

How it is calculated

The serviceability is calculated by combining all of your income such as your salary, rental income and interest from investments, and then taking away your expenses and other repayments you have, including your mortgage repayments.

"However, it is not always straightforward, especially when you take into account things like your employment status (i.e. freelancer vs full-time) and how many dependents you have," says Brodie Haupt, CEO and co-founder of Aussie digital lending and payments provider WLTH.

"As part of the process of determining your serviceability, lenders will calculate your mortgage at 2.5% higher than the market rate to ensure that if there is a shift you will still be able to comfortably pay back your repayment.

"This is a safety net that they build into the calculations to protect themselves, but it is also to assist the consumer to ensure that they are not in a position where they will be unable to make their repayments if there is a shift in interest rates throughout the life of the loan."

How income is assessed

Not all rental income is treated equally. Whereas 100% of your salary will go into the calculation, typically only 80% of rental income will be calculated.

"The reason for this is that they need to consider that the property won't always be tenanted, so the borrower won't be able to depend on the full rental return to cover their mortgage repayments."

The same goes for income from shares "due to the fluctuations in the market and the risk that shares could also depreciate in value".

"This means that lenders cannot accept 100% of investment income and will generally consider 80% (this varies between different institutions)."

The benefits of increasing your home loan serviceability

The good news is that home loan serviceability isn't a static condition you're lumped with - there are ways you can improve it and thereby improve your chance at securing a loan at a good rate from a wide amount of products.

"Another benefit of increased serviceability is having a greater buffer to minimise risk if interest rates move," says Haupt.

"This will take a considerable amount of pressure off, and give you a safety net to fall back on if there is an unexpected change."

Here are five things Haupt recommends to improve your home loan serviceability.

1. Reduce credit limits

Even if you don't owe anything on your credit card your limit will still be considered as potential debt when lenders are assessing your position. As a borrower, this will make you much more attractive to the lender due to having fewer lines of credit and removing that potential risk.

2. Aim for stable employment

Being self-employed or a contractor can be viewed as a risk by some institutions. If you are in a new job and still under your probation period, this can also affect your serviceability, which is why it's best to start applying for the loan when you have passed probation as it allows you to demonstrate a constant and stable income stream.

3. Pay off BNPL loans

Buy Now Pay Later (BNPL) products are readily available in most stores now, they are easy to use and can be seen as a great way to manage cash flow, however, what many people don't understand is the effect that they have when applying for a home loan.

BNPL transactions often show up on a credit check, and generally, this will have a similar effect to credit cards that demonstrate when you are overextending yourself through these companies. To increase your serviceability, make sure you pay all of these debts off before applying for a loan.

4. Rein in spending

Before buying a home, it is important to budget and save money, not only for your deposit but to also demonstrate your spending habits to the lending. When you start thinking about getting a home loan it is important to cut back on your spending habits.

To borrow money, the lender will need to see your bank statements, and if there is a considerable amount of spending on takeaway and entertainment costs, this will affect your serviceability. Institutions want to see that you're demonstrating responsible spending habits, ensuring that they will trust you to make your repayments.

5. Pick the right lender

Know what you want and always shop around. Currently, in Australia, there is so much competition and with most banks lowering rates after the recent cash rate cut, there is no better time to find the best products in the market.

Take advantage of comparison sites, read up on different lenders and institutions, and know exactly the kind of products you want to get access to.

My parents have never been able to afford to buy a home.

Now that I am working full-time, they suggested I buy a house for the family. They would give me some money to help with a deposit and said they will help me pay the mortgage.

But they both receive pensions, and I know money is tight. 

I love my family, and my parents deserve a home of their own, but the idea of taking on a big mortgage on my own (because it does feel like I would be on my own) terrifies me. - Chai Li

Goodness Chai Li, here you are between a rock and a hard place. No matter how much you love your parents, and they love you, you are quite correct, the liability of a big mortgage falls on you.

But there is also an upside here. Your parents will be paying rent and that amount could go to you to support the mortgage. Their contribution to the deposit will also be a big help in getting you into the market.

You can quite easily do your own numbers around what you can afford in repayments, plus your parents' help.

A real challenge is what do your parents do if they need to go into care?

All their capital may be tied up in the home and their pension supporting the mortgage. I am equally concerned that your role in time to come may be one of near full-time carer as they grow old. That will not fit with a full-time job to make mortgage repayments.

Fortunately, you are a long way from making a decision on this. The key is the actual numbers, which I can appreciate you don't want published in a magazine.

Your decision depends upon your salary, your savings, your parents' savings, how much of their pension they could use to help with the mortgage, the long-term care of your parents and, of course, how much you will need to pay for a suitable house.

I think doing these numbers with your parents will lead you to the solution. Of course, there is also the very significant issue of whether you want to spend possibly many decades living with Dad and Mum. 
I wish I could be more definite for you.

It is tricky and I am a bit terrified for you as well, but I am hoping that after an open conversation once you have all your numbers - what a bank will lend you and so on - your decision becomes clearer.

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Dr Nicola Powell, chief of research and economics at Domain, to discuss the latest on property prices and preview the spring property season.

00:59 Spring property market preview

01:45 Current property market trends

03:43 Impact of cash rate reductions

05:07 Profits and losses in the housing market

06:17 Spring selling season insights

09:19 Market outlook for 2025 and beyond

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

You know the scene: you're at the pub, halfway through a schnitty, and your mate starts banging on about their home loan being "in the fours."

"Pffft... 5.60%!? Mate, they're having you on."

Egg on your face. It's been a hot minute since you've even thought about your interest rate - and that's despite hearing the RBA rumblings of future cuts.

After slumping your way to your morning local, you grab yourself a brew and rage dial your mortgage broker.

"Why the hell is my rate so much higher?! My mate's with Big Bank and they're on 4.99%!"

"We're getting a lot of, 'but my mate got X%, why can't you get me that rate?', says Chris Foster-Ramsay, finance and money expert and founder of Foster Ramsay Finance.

"It's become a national pastime."

5 factors that shape your mortgage rate

The truth is, no two borrowers are the same. Lenders weigh up a bunch of things when deciding your rate - and that's why your mate's deal might look sharper than yours. Here are the big ones:

1. How much equity you've got

"The more equity you've built up, the sharper the rate," says Foster-Ramsay.

Equity is the portion of your property that you truly own. It's the difference between your property's value and the amount you still owe on your mortgage.

Lenders assess interest rates based on Loan-to-Value Ratio (LVR) bands.

For example, someone with a 50% LVR (meaning they've paid off half of their loan) is considered more financially stable than someone with an 80% LVR.

"It's a retention tool as much as it is a risk thing. If you've been paying your loan for years and the bank sees you as solid, they'll want to keep you," Foster-Ramsay says.

On the flip side, if you're new to the market with a small deposit, your loan-to-value ratio is higher - and so is your rate.

"It's not that the bank doesn't like you," he adds, "it's just that you're higher risk until you've built up that buffer."

2. The property itself

Two mates can borrow the same amount but get different rates if one's buying a house and the other's buying a tiny apartment.

"Lenders see density risk," says Foster-Ramsay. "A freestanding house on a block in suburbia is very different to a two-bedder in a 200-unit tower. That's concentration risk."

"Add flood zones or bushfire ratings on top, and you can see why one property gets a loading while the other doesn't."

3. Owner occupier vs Investor

Live in the place, and you'll usually pay less. Rent it out, and your rate climbs.

"Around a decade ago, there wasn't really a difference between owner-occupied and investment rates, or between interest-only and principal-and-interest loans," Foster-Ramsay says.

"But times have changed. Lenders are directed by regulators to assess these loans differently."

Across lenders, owner-occupier loans are generally cheaper. Foster-Ramsay says even with the same lender, it can be a 0.2-0.3% swing.

4. How you prove your income

Documentation also makes a difference.

"If you're salaried, with PAYG slips and ATO statements, it's easy for the bank to assess," Foster-Ramsay says.

"If you're self-employed and relying on an accountant's letter, that's riskier for the lender. The rate reflects that."

5. Fixed vs variable

Here's where pub bragging rights get tricky.

The banks generally have a good idea of whether interest rates are going to go up or down.

Variable interest rates are directly linked to the official cash rate set by the Reserve Bank. When the cash rate drops, lenders usually pass on those cuts to borrowers with variable-rate loans.

If financial markets expect rates to fall (like they are now), banks may offer lower fixed rates now to lock in customers before rates drop further.

"If your mate's locked into a fixed rate, sure, it might sound sharp now," Foster-Ramsay says. "But if rates fall, he's stuck. And breaking out of a fixed loan can be brutally expensive."

"But fixing isn't about trying to beat the bank," he stresses. "It's about buying repayment certainty. If you're chasing a quick win, you're in the wrong product."

Why your mate's in the fours (and you're not)

Before you start getting as bitter as your VB, remember there are a few reasons your mate might be bragging about his killer rate.

1. Different circumstances

Your financial position isn't theirs.

They might have more equity, a safer property type, or simply ticked more boxes for the lender.

Or they could've locked themselves into a fixed rate. Be sure to remind them of that when your rate's in the threes.

2. They've actually done the work

Your mate might have picked up the phone and told their broker to sharpen the pencil.

In fact, nearly 100,000 borrowers switched lenders in the past three months alone, according to Canstar.

That's more than a thousand Aussies a day deciding loyalty to their bank isn't worth the tax.

According to Canstar's Sally Tindall, "The RBA might have served up rate cuts on a platter, but that hasn't stopped borrowers chasing even sharper deals."

If your mate's one of them, fair play - they've earned the right to bang on about it at the pub.

3. They're full of it

And then there's the simplest explanation: they're just putting it on. We all have "that mate".

Bottom line

Don't assume your mate's deal is better until you've looked at your own. Maybe they've fixed, maybe they've refinanced, maybe they've just having a lend.

Either way, loyalty is rarely rewarded in banking and if you haven't checked your rate lately, odds are you're the one buying the next round.

Despite bait advertising and underquoting being outlawed years ago, a recent exposé by The Sydney Morning Herald and The Age found that underquoting properties listed for sale at auction remains common in Sydney and Melbourne.

It's less of a problem in other cities where few homes may be sold under the hammer.

State laws differ too. In Queensland, it's illegal for agents to provide any price guide at all for homes selling at auction.

The thing is, the issue of underquoting is nothing new.

Years ago, my partner and I set our hearts on a rundown house slated for auction in Sydney's inner west. The agent quoted an upper price estimate, which was within our budget though at the top end.

Hopes came crashing down when the auctioneer opened bidding at the top price we'd been quoted. After exchanging "What the...?" looks, we slunk out of the auction room leaving buyers with deeper pockets to fight it out.

So, why is this still happening in 2025?

We're in a seller's market

The state of the property market as we head into spring, suggests more buyers could be left shell-shocked at the prices some homes will sell for.

According to listing site Domain, an auction clearance rate of 60% points to a balanced market. A clearance rate of 70% raises the possibility of rapid price increases, and indicates a "sellers' market".

Today's clearance rates are far higher.

Cotality says clearance rates hit a 12-month high of 75% nationally in late July though by early August this had cooled to 72%.

Ironically, the August rate cut could worsen the situation as increased borrowing power faces off against a market where property listings are 20% below the 5-year average.

Competition is intense

Stewart Bunn, communications and corporate affairs manager at First National Real Estate, says, "The higher the price range, the greater the chance a property will sell for far more than expected."

He explains that in the prestige market there may genuinely be no truly comparable properties, and (uber rich) buyers are less influenced by interest rates or economic news.

We saw this firsthand with the August sale of a Bellevue Hill (eastern Sydney) home that sold under the hammer for more than $21 million - $6 million above the most recent price guide.

At the entry level end of the market, agents may have more comparable sales to guide estimates. But competition is intense, and Bunn says unexpected factors can skew results.

"How can an agent know, for example, that one buyer may be leveraging the Bank of Mum and Dad, who are growing tired of Saturday inspections and dashed hopes, and are determined that today is the day they are buying come hell or high water?," asks Bunn.

He adds, "The bottom line is that the factors influencing the price of real estate do not change. But no scientific calculation has yet been found that can accurately weigh recent sales, market volumes, confidence, job security, FOMO, or the sheer determination of a buyer to not be pounding the pavement, starting the process of finding a new home again next Saturday."

Agents can face penalties

Just because a property sells for more than expected doesn't mean the agent has deliberately underquoted. That said, some agents can have a track record of dodgy price estimates.

Josh Tesolin, former principal of Ray White Quakers Hill (in western Sydney), recently had his real estate licence suspended following NSW Fair Trading allegations of underquoting over 100 homes. He has also been accused of dummy bidding at auctions, producing false documents, and using high-pressure sales tactics.

NSW Fair Trading Commissioner Natasha Mann says Tesolin's suspension "reflects the seriousness of the contraventions we believe have been committed and the importance of maintaining public confidence in the property sector".

How can buyers protect themselves?

Mann adds that NSW Fair Trading has increased its scrutiny of real estate agents. In the meantime, there are steps buyers can take to protect themselves.

The golden rule is always to conduct your own research - and plenty of it. It's not just about checking out what homes are selling for. Attend auctions to get a feel for the mood among buyers, their enthusiasm to bid - and whether prices are outpacing expectations, and by how much.

Bunn suggests additional steps. "You can talk to other local real estate agents and ask them for their views. You can door-knock the neighbours and ask what they think of the neighbourhood and the likely price. They'll always talk it up, but you'll often find out what the vendor has been saying they want (as a price) as well."

Connect with a broker or lender

Before you even begin home hunting, reach out to a mortgage broker or lender. This will clarify your borrowing power, which is likely to have increased following the August rate cut.

Craig Betalli, senior broker with Our Broker Finance, points to the value of staying in touch with your broker throughout the home hunting process.  He explains, "It's important to discuss your target property with your broker as they may be able to provide market insights.

"If the property you like has a price guide of $1.2 million, recent sales may indicate you should prepare your loan pre-approval to pay $1.3 million. Being better prepared may save time, cost and disappointment."

According to Betalli, having your home loan pre-approved is a near-essential step in today's fast-moving market.

"People often feel that a pre-approval will have a negative impact on their credit record," says Betalli. "So they hold back from pre-approval. But then, when they find their ideal property, they're not in a position to buy it."

He notes that while a home loan pre-approval will likely appear on your credit file, "it's about being as prepared as possible to buy the right property when it comes along."

Loan pre-approval should cost nothing. "Some brokers may charge a commitment fee, but loan fees don't kick in until your mortgage settles," Betalli adds.

Should you pay for pre-purchase inspections?

Pre-purchase building and pest reports can identify problem properties, but they come at a cost, often starting at several hundred dollars. Buyers may question whether it is worth wearing the expense if a home is likely to sell beyond their budget.

According to Betalli, skipping a pre-purchase inspection may not impact a banks' decision to approve your home. However, there can be a catch.

"If the lender's valuer visits the property and sees obvious damage, they may make a note that repairs are required plus estimate the cost of repairs," says Betalli. "If the buyer doesn't have the cash to carry out the repairs, the bank may say the property isn't suitable security, and this will absolutely impact loan approval."

The bottom line is that buyers skip pre-purchase inspections at their own peril.

Is it worth making an offer pre-auction?

If you're a serious buyer it may be worth making an offer before auction day.

Bunn advises, "First confirm the vendor will consider a pre-auction offer. Then make it strong enough to spark their own FOMO. Low-balling wastes everyone's time.

"Put your offer in writing on the contract of sale, waive the cooling-off period, and meet the agent in person that day to hand them the offer," says Bunn. "Give a clear, short deadline - 24 hours is reasonable - but expect the agent to alert other buyers. Your advantage is that your offer is real and ready to exchange, unlike verbal interest."

Done right, Bunn says a pre-auction offer can see you secure the property immediately or move on without weeks of uncertainty.

Not everyone is complaining

There's no doubt that seeing a home sell at auction for more than you expect can be gut-wrenching - not to mention a waste of time and money.

But sellers aren't complaining. Chances are, neither are successful buyers.

"Homes often sell for more than many people think they are worth today," says Bunn. "You might be right when you say that your competitor paid too much, but they now own the home and it will be worth more than they paid in the future - you're still hunting."

And in a market where agents are paid by sellers to get the best price possible, today's buyers will expect no less when they choose to sell at some point in the future.

This week on the Friends With Money podcast, Money's Tom Watson is joined by financial advisor and author, Helen Baker, to talk about her latest book Money For Life, and the role of property in building financial security. They discuss:

• Five fundamental financial foundations
• Buying a home versus an investment property
• What buyers often don't not know about property finance
• Property and opportunity cost
• The benefit of owning property in retirement

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

A kitchen renovation doesn't come cheap - but that doesn't mean you have to overspend to get a space that looks great and works beautifully.

With the right plan and some clever swaps, it's possible to create the kitchen of your dreams - and still keep your savings intact.

"A smart renovation is about knowing where to invest and where to pull back, without sacrificing style, function or durability," says Mike Turner, managing director at Nouvelle Designer Kitchens. Here are 10 cost-saving moves that can save you thousands.

1. Stick with the existing layout

Save: $2000-$6000 or more

One of the fastest ways to blow your reno budget? Moving plumbing and electricals.

"Reconfiguring a kitchen layout can add thousands to the final bill," says Turner. "Keeping the layout intact can easily save you thousands or more."

Cherie Barber, renovation expert and founder of Renovating for Profit, agrees: "It's where the big bucks hide."

If your current kitchen works well functionally, avoid the temptation to move sinks, ovens or power points. You'll not only save on trade costs, but also on potential flooring repairs or cabinetry modifications that might otherwise be required.

2. Choose flatpack with luxe touches

Save: $10,000-$20,000

Flatpack kitchens have come a long way, with more styles, finishes and storage options than ever. And with a few thoughtful upgrades, you can easily give them a luxe, custom feel.

"Pair affordable flatpack cabinetry with standout features like a premium benchtop or quality appliances," says Barber.

Stick with standard cabinet sizes to keep costs down, then dress them up with designer handles, soft-close drawers or a tiled splashback. The result? A beautiful kitchen that punches well above its price tag.

Many suppliers now offer online design tools to help plan your layout, so you can visualise how to elevate the look without the custom cost.

3. Laminate over stone

Save: $5000 or more

Love the look of stone but not the cost? Lean into laminates.

"Modern laminate benchtops offer impressive durability and realistic stone-like finishes," says Turner. "You get the luxe look for a fraction of the price."

They also resist stains and scratches better than many people realise, making them a practical choice for busy family kitchens.

"Laminate can save you at least $5000 compared to stone - and still look amazing," says Barber.

4. Shop smarter for appliances

Save: Up to $8000

Savvy renovators don't pay full price.

"Look for package deals, factory seconds, end-of-financial-year and Black Friday sales," says Turner.

Retailers often offer generous discounts if you buy a bundle of three or more appliances, such as an oven, cooktop and rangehood.

Barber recommends showroom stock and clearance items too.

"Showroom appliances, sinks or taps often go for half price or near cost price when retail stores want to clear their stock out."

Energy efficiency is another smart filter - not just for long-term savings on bills, but also to tap into potential government rebates in some areas.

5. Open shelving over upper cabinets

Save: Around $1500

Upper cabinets can be one of the most expensive components in a kitchen, especially when you start adding in internal fittings and lighting.

"Replacing some upper cabinets with open shelving adds character and reduces material costs," says Turner. "It also gives your kitchen a more open, airy feel."

Barber points out that shelves are also easier to install and allow for fun, personalised (and inexpensive) styling - think cookbooks, ceramics and plants.

6. Resurface instead of replace

Save: Up to 70% on cabinetry costs

If your kitchen bones are good but the surfaces are tired, consider resurfacing rather than starting from scratch.

"Repainting cabinetry or just replacing the doors can save you thousands," says Barber.

It's a great way to update dated colours or finishes while keeping the underlying structure intact. You'll also avoid unnecessary waste going to landfill. Jazz up your refreshed cabinets with new handles, hinges or tapware for a modern update on a shoestring.

7. Use high-end finishes strategically

Save: $6000-$8000

The secret to a luxury look on a budget? Spend where it shows - and save where it doesn't.

"Focus on standout features like a beautiful splashback, designer tapware or statement lighting," says Turner.

These focal points draw the eye and set the tone.

"A touch of brushed brass or matte black hardware can make a space feel bespoke without a huge investment," he adds.

Barber recommends pairing affordable basics with one or two luxe elements: "It tricks the eye into thinking your whole kitchen is high-end."

8. Rethink Timber Flooring

Save: $2000-$3000

Hardwood floors are beautiful - but they're not your only option.

"Hybrid, laminate and vinyl floors have come a long way in design and resilience," says Turner.

"They mimic the look of real timber while being more water-resistant and easier to maintain, making them ideal for high-traffic spots like kitchens and bathrooms."

Barber also suggests cork as a stylish, sustainable alternative that feels warm and comfortable underfoot.

9. Skip unnecessary premium upgrades

Save: Hundreds to thousands

It's easy to get caught up in flashy extras - but will you actually use them?

"High-end appliances, custom cabinetry and fancy fittings can quickly increase costs," says Barber.

"Prioritise what you'll use every day and invest in items with real, tangible value." Ask yourself: will that built-in coffee machine or sensor tap really improve how you use your kitchen? If not, redirect the spend towards better cabinetry hardware, drawers or lighting.

10. Budget properly - and add a buffer

Save: Thousands in stress (and surprise costs)

No one wants to stop a renovation halfway through because they've run out of money.

"Skipping proper planning is one of the biggest cost traps," says Barber. Set a realistic budget for your renovation and build in at least 10% as a contingency fund.

"Things like water damage or dodgy wiring often pop up during a renovation - and you need funds to finish the job."

Planning ahead also gives you room to make smarter decisions and avoid expensive last-minute choices.