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UK and Australian Housing Markets Slip as Borrowing Costs and Policy Uncertainty Bite

Rising mortgage pricing, an energy-driven market shock and recent tax and political moves are shrinking demand and cooling prices in key cities.

Overview

  • June data show the UK market has stalled with average prices broadly flat and mortgage approvals plunging in May to the lowest level since December 2023, leaving transactions well below last year’s pace.
  • Property-site figures report about three in five homes listed since January remain unsold, signalling a big build-up of supply and a sharp slowdown in buyer activity.
  • In Australia, Cotality’s June index recorded a 0.4% national fall—the largest monthly drop since December 2022—with Sydney and Melbourne leading the downturn and data suggesting prices peaked in March.
  • Mortgage costs spiked this spring, lifting typical monthly repayments by roughly £125 and by about £244 in London, and three RBA hikes in Australia have also weakened affordability and investor demand.
  • Lenders have slightly cut some fixed rates since April but persistent political debate in the UK over property taxes and Australia’s federal budget changes to investor concessions mean confidence is likely to stay subdued and outcomes will vary by region.