Australia’s brief pause in interest rate tightening may stop mortgage arrears from worsening, but it is unlikely to ease the competition between first-home buyers and property investors.
“Even with a temporary rate respite, the battle for home loans will remain intense, with investor demand for housing finance continuing to pick up,” S&P Global credit analyst Erin Kitson said in a 24 November 2025 report.
Kitson noted that aspiring first-time buyers are having to borrow more to get into the property market, with government initiatives such as the 5% deposit scheme encouraging higher leverage. Investors, however, are typically less affected by rate changes due to stronger incomes and existing property portfolios.
This dynamic risks pushing property prices even higher by fuelling competition.
Housing affordability continues to deteriorate. Over one-third of Australians surveyed by Finder said they have cut back on personal spending just to keep up with their home loan costs. Yet 35% still believe home ownership is out of reach.
Major banks are acknowledging the housing crisis. National Australia Bank (NAB), one of Australia’s largest lenders, has committed $39.3 billion (A$1 billion) in support. In an open letter in October 2025, NAB CEO Andrew Irvine warned that the country “isn’t building enough homes” and described housing as Australia’s most pressing social and policy challenge.
Separately, a November 2025 Roy Morgan survey of 60,000 Australians found that mortgage holders and renters carry the highest credit card balances, owing A$1,342 and A$911 respectively, compared with A$787 for those who fully own their homes.
“These figures show that cost-of-living pressures — notably high rents and mortgage repayments — are forcing many Australians to rely on credit to get by,” said Suela Qemal, general manager of financial services at Roy Morgan.
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