May 2026 Newsletter
HEY NEIGHBOUR!
It definitely feels like the market has shifted over the past couple of months. There has been a noticeable slowdown across both sales and rentals, with buyers, renters and even investors becoming a lot more cautious with their spending decisions. Cost of living pressures are continuing to hit hard and you can see it flowing through every part of the market — from enquiry levels, to longer decision making, to renters trying to stretch budgets further than ever before.
The Federal Budget release was watched very closely by both the property industry and everyday Australians. The major focus appears to remain on cost of living relief, housing affordability and broader economic stability, however there will no doubt be ongoing debate around taxation changes, housing supply and how future reforms may affect investors, renters and the overall confidence of the market moving forward. Many people were hoping for immediate relief measures, but the reality is that confidence and affordability remain key concerns across the country.
One thing that is also becoming a real concern within the industry is the rapid rise of Artificial Intelligence and how sophisticated it has become. Whilst AI can be an incredible tool when used properly, we are now seeing rental applications supported by documents that appear completely legitimate at first glance — payslips, employment references, bank statements and even identification documents generated or altered using AI technology. It is becoming increasingly important for agents, owners and businesses to slow down, properly verify information and ensure thorough due diligence is being carried out before decisions are made.
And on a completely unrelated but equally painful note — Carlton supporters have copped another difficult blow with the resignation of Michael Voss. Between the football, interest rates, cost of living and the property market slowing down, it feels like patience is being tested everywhere at the moment.
Hopefully brighter months are ahead for everyone.
Warmest wishes,
Carmela
MARKET INSIGHTS
We strive to stay up to date on the latest market trends. Here are a few articles we think are worth reading.
Key Highlights:
- Interest rates: Cash rate currently at 4.10%, with another 0.25% increase likely in May, potentially lifting rates to 4.35%.
- Property Prices - Victoria / Melbourne: Median house prices remain near $977k, with affordable and mid-market properties continuing to outperform. Forecast growth for 2026 remains around 6.6%.
- Rental Market: Melbourne vacancy remains tight at 1.7%, with rents averaging approximately $673/week and increasing around 5.2% year-on-year.
- Investors Activity & Lending: Banks remain competitive for strong borrowers despite higher rates.
- National Market Snapshot: Melbourne continues to show improving value compared to other major markets.
What to Watch
- Potential May rate hike to 4.35%
- Continued rental growth due to low supply
- Strong competition for quality properties
What this means for you:
- Loan health check: Reviewing your current rate may uncover savings opportunities.
- Plan ahead: Understand repayment and borrowing impacts if rates increase to 4.35%.
- Rental strategy: Tight vacancy conditions continue supporting rental growth and stronger yields.
- Equity access: Melbourne property values remain positive, creating opportunities to leverage equity before further tightening.
If you wish to discuss this further, feel free to reach out.
Federal Budget 2026 – What Australians Need to Know (abc.net.au)
Australia’s 2026 Federal Budget has officially been handed down by Treasurer Jim Chalmers, with the government focusing heavily on cost-of-living pressures, housing affordability, productivity and long-term economic reform. From a property perspective, proposed housing tax reforms and infrastructure spending could significantly influence investment behaviour, supply and market conditions over the coming years.
Key Points:
- Proposed reforms to negative gearing and capital gains tax concessions aimed at encouraging investment into newly built homes.
- Continued cost-of-living relief measures including tax offsets, Medicare investment and support for small businesses through instant asset write-offs.
- Major funding allocated toward fuel security, transport infrastructure and housing-enabling projects.
- Strong focus on balancing economic reform with inflation pressures and long-term economic stability.
Melbourne Property Market Showing Signs of Stabilisation (cotality.com.au)
The Victorian Government has implemented a major cabinet reshuffle to reset its position ahead of the next election, elevating new ministers and refocusing on key voter concerns like cost of living, housing, and safety. The move also signals a consolidation of leadership, reinforcing Premier Jacinta Allan’s authority amid internal pressure. From a property standpoint, changes to planning and infrastructure portfolios could lead to policy shifts or short-term uncertainty in an already softening market.
Key Points:
- A strategic reshuffle aimed at resetting the government ahead of the next election
- Renewed focus on housing, cost of living, and community concerns
- Potential policy shifts in planning and development that could impact the property market
AI Fraud & Cyber Scams Continue to Rise Across Australia (scamwatch.gov.au)
- AI-driven scams and cyber fraud are rapidly increasing.
- Property transactions and rental payments remain major scam targets.
- Scammers are using voice cloning, fake emails and impersonation tactics.
- Businesses are encouraged to strengthen verification and cybersecurity processes.
