HSBC Predicts a 13% Price Fall, But Will Homes Actually Get Easier to Buy?
HSBC has just dropped a big number into the property conversation. The bank now expects national home prices to fall as much as 13% by mid-2027, up from its earlier call of 8%. If that plays out, it would be the biggest housing correction Australia has seen in three decades.
For a lot of buyers sitting on the sidelines, that headline sounds like good news. But if you’re actually trying to get a loan approved right now, there’s more to the story.
What’s Actually Driving It
HSBC chief economist Paul Bloxham points to two things working together. First, the tax changes that came through in the 12 May federal budget have cooled investor demand faster than expected. Second, higher interest rates have made borrowing more expensive for everyone else. Sydney and Melbourne are already leading the falls, and HSBC expects the softness to spread to Perth, Brisbane and Adelaide over the coming quarters.
Brokers on the ground are seeing the same pressure show up in a different way, through borrowing power, not just price tags. As one broker recently put it, even when a client can comfortably afford the actual repayment, a bank’s servicing assessment means higher rates can shrink how much they’re approved to borrow, sometimes forcing a rethink on price range or deposit.
Why A 13% Fall Doesn’t Automatically Mean Easier Buying
Here’s the catch worth sitting with: a 13% price fall forecast doesn’t necessarily mean homes become 13% easier to buy. While property prices may soften, higher rates can be shrinking your borrowing capacity at the very same time. So the gap between what you want to buy and what a lender will approve might not close much at all, even in a falling market.
Softer prices can open a genuine window, but only if your finances are ready to move on it. This is the time to get your borrowing capacity checked and your pre-approval refreshed, rather than assuming last year’s numbers still apply. If your current loan was set up before this run of rate rises, it’s worth checking where you stand on deposit and LVR as values shift, and whether refinancing could ease things.
The Smart Move Right Now
Forecasts are useful for context, but they’re not a finance plan. What matters is your own numbers: your deposit, your repayment buffer, and what a lender will actually approve today. That’s a very different exercise to reading a headline.
Want to know where you actually stand?
At OM Financials, we make the loan process simple and guide you every step of the way. Speak with our brokers today to understand your borrowing power in this changing market. Book your free consultation or contact us anytime on 0478 876 967.
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