Borrowing Capacity Has Taken a Real Hit

The cash rate now sits at 4.1% and the standard variable rate at 6%, reversing much of the capacity buyers regained through 2025. For a household on a $120,000 income, that translates to roughly $37,000 less borrowing capacity than at the start of the year.

The behavioural response is already visible. Buyers are shifting to smaller lots, pushing further out, or simply taking longer to commit. With inflation risks tied to global conflicts suggesting rates are more likely to move up than down in the near term, that caution is unlikely to ease quickly.

The Underlying Drivers Are Still There

Despite the pressure on capacity, the fundamentals supporting greenfield demand remain intact. Population growth continues to run above the national average, with migration led demand feeding directly into the greenfield buyer pool. First home buyer schemes are providing a partial buffer at the entry point, keeping that cohort active despite tighter conditions.

The established market remains constrained, with rental vacancies and listings sitting well below long term norms. That combination will keep greenfield demand from retreating in any meaningful way, even if the pace of activity moderates.

SEQ Still Holds Relative Value for Interstate Buyers

For interstate buyers and investors, South East Queensland retains a compelling relative value position against Sydney. That positioning has driven significant demand into the region over the past few years and remains a genuine point of difference as affordability pressures intensify in the southern capitals.

Supply Constraints Are Not Going Away

Construction costs are not expected to drop, keeping feasibility tight and limiting the volume of new supply that can be brought to market. Projects that priced aggressively through the stronger part of the cycle may face some relative softening in demand and extended sale periods as the market adjusts to current borrowing capacity.

That dynamic creates a more selective environment. Not all projects are equally exposed, and pricing alignment to what buyers can actually borrow will be a key differentiator in project performance through the remainder of the year and into 2027.

Want the Full Picture?

This article draws on findings from RPM Group’s SEQ Greenfield Market Report – April 2026. Access the complete data and market forecasts in the full report.