Mortgage market hits new highs on back of property price rises

The mortgage market grew to another record high in November, hitting $2.41 trillion in the month on the back of rising property prices.
Our analysis of the latest APRA monthly banking statistics, released on Friday, shows the value of residential mortgages among the banks grew by 0.67% in November and 6.36% across the year.

CBA recorded the largest monthly increase in dollar terms, rising by $4.6 billion in just one month (0.76%). Macquarie Bank continued to post impressive gains, with a monthly increase of $3.6 billion (+2.32%), contributing to an annual increase of almost 24%.

ANZ recorded its smallest monthly increase since April 2022, with $189 million added in November, or 0.06%.

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Source: APRA Monthly Authorised Deposit-taking Institution (ADI) Statistics, Nov 2025, released 2 Jan 2026, prepared by Canstar.com.au. Includes both owner-occupied and investor loans to households for the big four banks and Macquarie. ANZ figures do not include former Suncorp mortgages.

The continued growth in home loans has been driven by the rise in property prices, with Cotality’s Home Value Index rising by 8.6% in 2025 – the biggest calendar year increase since 2021.

While potential interest rate hikes in 2026 have subdued house price forecasts, strong demand and a continued supply deficit are expected to see prices continue to rise.

Our analysis of Westpac forecasts using Cotality data shows the median house price in Sydney could increase by more than $79,000 throughout the year, while the median-priced house in Perth and Adelaide could break the $1 million barrier this year, if house prices rise in line with Westpac’s property forecasts.

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Source: Canstar. Westpac property price forecasts Dec 2025, Cotality Home Value Index, 31 December 2025 with prices forecast to rise – Syd: 5%, Melb: 7%; Bris: 6%; Perth: 8%; Adel: 6%; Hob: 4% Assumes house prices rise in line with dwelling forecasts.

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Source: Canstar. Westpac property price forecasts Dec 2025, Cotality Home Value Index, 31 December 2025 with prices forecast to rise – Syd: 5%, Melb: 7%; Bris: 6%; Perth: 8%; Adel: 6%; Hob: 4% Assumes house prices rise in line with dwelling forecasts.

Cash rate hikes could be the final straw for some first home buyers

While growth in prices is likely to be seen as a win for existing property owners, it will translate into tougher times ahead for hopeful first home buyers looking to buy in 2026.

First home buyers are no strangers to rising property prices, however, cash rate hikes, if they materialise, will hit the home-buying budgets of those hoping to borrow at or near capacity.

Our analysis shows that if we see two cash rate hikes in 2026, a person on the average wage could see the maximum amount they can borrow from a bank drop by an estimated $24,000.

Note: this will vary between lenders.

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Source: Canstar. Based on an owner-occupier taking out a 30 year loan at the av. new customer variable rate. Maximum borrowing capacity is an estimate only and assumes minimal expenses, no debts, no dependents, average wage based on ABS data. See full notes below.

Macquarie is “rattling the cage” of the big banks

Canstar data insights director, Sally Tindall, says, “The mortgage market posted another robust result in November, growing to a record high of $2.41 trillion, fueled by a property market that’s largely refused to cool.”

“CBA and Westpac recorded strong monthly gains of almost 0.8 per cent, however, ANZ largely treaded water in November, recording its smallest monthly increase since April 2022,” says Tindall.

“While the big four banks continue to hold the lion’s share of mortgages, Macquarie remains the standout challenger. With an annual growth rate of nearly 24 per cent, Macquarie is chipping away at the dominance of the majors by offering an alternative that clearly resonates with borrowers.”

Tindall went on to highlight the fact that Canstar analysis of the APRA data shows six years ago, the majors held 78.3 per cent of all residential mortgages from the banks. Today, that’s slipped down to 73.6 per cent. “While this won’t be enough for the majors to hit the panic button, Macquarie’s consistent performance is rattling the cage,” she said.

House prices likely to rise along with cash rate hikes

“A couple of RBA hikes could take some heat out of the property market by putting a handbrake on the maximum amount people can borrow from the bank, however, it’s unlikely to send prices in reverse,” Tindall continued.

“Increasing demand for properties, spurred on by the uncapping of the government’s Home Guarantee Scheme and a continued strain on supply, is likely to push prices up even in the face of cash rate hikes.”

Tindall says that first home buyers looking for a way in should prioritise saving a solid deposit and give their budget plenty of wiggle room.

“Borrowing every last dollar the bank will lend you comes with risks. Understand what your mortgage repayments would look like if rates rose 3 percentage points further and make sure you’re 100 per cent comfortable paying that money on your current wage.”

Borrowing power calculation notes

Calculations are based on the current new owner-occupier variable rate from the RBA at 1 February at 6.25% and today at 5.50%, a loan term of 30 years, annual expenses of $24,000 for singles, 90% of post-tax income available to service the loan and expenses, and a 3%-point interest rate buffer. Tax calculations based on the current financial year, excluding Medicare Levy. Assumes borrowers have no existing debts, minimal expenses and no dependents. Borrowers should seek personal financial advice before deciding how much to borrow and know the actual amount will vary depending on their personal circumstances and between lenders.