Aussie couples are now delaying buying a house until they know what Aussie interest rates will do

Aussie couples are now delaying buying a house until they know when interest rates will fall, new research shows.

House prices in Brisbane, Adelaide and Perth have been growing by double-digit figures during the past year, despite the Reserve Bank recently raising interest rates at the most aggressive pace since the late 1980s.

But new CoreLogic data is pointing to a slowdown with Melbourne property values dipping by 0.2 per cent during the past 28 days, as Hobart prices fell by 0.5 per cent.

CoreLogic economist Kaytlin Ezzy said this was a sign aggressive rate rises were discouraging buyers, including many couples, from buying a home until they knew what interest rates would do.

'With many household budgets already stretched by the high cost of living and increased debt servicing costs, it's likely some potential buyers are holding off and delaying purchasing decisions until the outlook for interest rates becomes clearer, which has reduced demand and taken some heat out of the market,' she said.

Home buyers for now have more choices as houses take longer to sell, with fewer buyers expecting a rate cut in 2024.

'It's unsurprising the potential for mortgage rates to stay higher for longer has dampened some buyers’ appetites, and we could see value growth ease further as affordability challenges and low sentiment continues to weigh on demand,' Ms Ezzy said.

CoreLogic figures showed the level of new listings had, since April, been well above the five-year average 'allowing overall stock levels to accumulate, reducing buyer urgency, and providing buyers more options and more leverage at the negotiation table'.

Ms Ezzy said potential home buyers were now expecting the RBA cash rate to remain at a 12-year high of 4.35 per cent for some time, with ANZ and NAB now both forecasting a delay in rate cuts until 2025.

'The expected timing for the first-rate cut has been pushed back by some economists, and consumers are becoming resigned to the fact that interest rates could remain higher for longer,' she said.

The 30-day interbank futures market regards another rate rise as a one-in-five chance. 

This was after new data last month showed inflation climbing by 4 per cent in the year to May - a level further above the Reserve Bank's 2 to 3 per cent target.

More comprehensive June quarter inflation data is due for release on July 31 and financial markets could be spoked if the data doesn't show an improvement on the March quarter's 3.6 per cent consumer price index. 

EY senior economist Paula Gadsby said another rate hike was still a possibility if inflation remained high, with the labour market still tight following the creation of 50,200 jobs in June.

'If that read indicates an acceleration in underlying price pressures, a rate hike is not out of the question,' she said. 

'Our central expectation remains that the Reserve Bank will hold the cash rate for some time yet.'

Capital city house prices have risen by 9 per cent during the past year to $992,473.

Brisbane, with a median house price of $953,028, is now dearer than Melbourne, where the mid-point is $948,879.

But nothing beats Sydney where $1.466million is the middle. 

Since the RBA began hiking rates in May 2022, Sydney borrowers have typically been paying $2,200 more a month on their home loan - or $26,400 a year. 

The RBA's 13 hikes in 2022 and 2023 have caused a 68 per cent surge in variable monthly mortgage repayments.