That 3% buffer keeps getting added to the higher RBA cash rate so the borrowing power of new and refinancing borrowers is getting smashed which means they can’t afford to pay as much as when they are looking to buy. That will translate into lower prices even before borrowers start to default and there are forced sales.
I bought my place in Sydney in August 2020 at the Covid lows - it’s probably gone up 30%. To get back down to what I paid is a 23% drop. It is quite easy to see that level of drop which will be very painful for those who bought recently and don’t have a buffer. Potentially, a 30-40% drop is not unrealistic for Sydney given how expensive it is.
