Almost 500,000 Australian mortgage holders are preparing to refinance as the cash rate sits at a 15-year high of 4.60%, according to REA Group. The figure lands at a moment when the performance gap between housing markets has widened sharply — South Perth has posted 13.8% annual growth against Dandenong's 2.3%, an 11.5 percentage point spread that is forcing investors to question whether leveraged property still outpaces cash and term deposits at today's rates. For a market segment used to comparing itself favourably against shares and bonds, the 2026 data set is less forgiving.
The Refinancing Wave and What It Reveals About Holding Costs
A mortgage holder refinancing at 4.60% is not simply chasing a lower rate — they are recalculating the net return on a leveraged asset against every alternative sitting in their portfolio. REA Group's figure of nearly half a million refinancers signals that holding costs have become the dominant variable in the property-versus-other-assets calculation, overtaking capital growth expectations that drove borrowing decisions through most of the 2020s.
This matters because the REAStats suburb data shows growth outcomes are no longer uniform enough to absorb that rate pressure evenly. Nedlands in Western Australia recorded 15% annual growth with a median of $2.2 million and just a 15-day selling cycle — a combination of capital growth and liquidity that makes the holding cost of a 4.60% mortgage look manageable. Dandenong in Victoria, by contrast, returned 2.3% growth against a 40-day selling cycle, meaning the same cash rate erodes a much larger share of the net return.
Property vs Term Deposits: The Growth Differential by State
Averaging the tracked suburbs by state produces a clear divide. Western Australia's four tracked suburbs — South Perth, Fremantle, Nedlands and Mandurah — are returning an average annual growth rate of roughly 11.3%. Victoria's six tracked suburbs, including Toorak, Prahran and Dandenong, average closer to 3.6%. Queensland sits near 8.6% across West End, Maroochydore and Indooroopilly, while NSW's seven tracked suburbs average 4.4%.
Western Australia's four tracked suburbs are averaging 11.3% annual growth, more than triple Victoria's 3.6% — a gap that dwarfs the margin most Australians are currently earning on term deposits at the RBA's 4.60% cash rate.
That spread is the core of the asset-class argument for property in 2026. A term deposit priced off a 4.60% cash rate delivers a known, low-risk return with no transaction costs and full liquidity. A WA property purchase carries settlement risk, stamp duty, and a multi-week selling cycle — but in suburbs like Nedlands and South Perth, it has also delivered growth that no fixed-income product has matched this year. The same cannot be said for Victorian or NSW markets where growth is tracking closer to, or below, what a conservative cash allocation would return once fees and vacancy risk are factored in.
Liquidity Is the Variable Cash Doesn't Have to Solve
Days-on-market data sharpens the comparison further. South Perth is clearing stock in 17 days with 63.5% auction clearance; Nedlands in 15 days at 65.5% clearance. Port Macquarie, by contrast, is sitting at 48 days on market with a 46% clearance rate and 3.5% annual growth — barely ahead of inflation and nowhere near compensating for the time capital is locked up compared with an at-call savings account or term deposit.
Buyer confidence in completed, well-located stock is still visible at the top end despite rate pressure: Spyre's $8.2 million unconditional sale at the completed Arc Residences in Toowong, reported by REA Group, saw the buyer waive the cooling-off period entirely — a signal that liquidity concerns recede when supply is finished and desirable rather than speculative. That is the exception, not the rule, across the broader data set, where slower-moving suburbs are the ones struggling to justify holding costs against simpler alternatives.
Background: Transaction Costs Property Doesn't Share With Cash
Unlike a term deposit or a share purchase, Australian property carries a substantial upfront transaction cost that other asset classes avoid almost entirely. State stamp duty rates, exemptions and surcharges materially change the net return calculation on any purchase, and the gap between states is significant enough to swing an investment decision on its own — see Stamp Duty in Australia — Complete State-by-State Guide for 2025 for the current state-by-state breakdown. A broader framing of how property growth, yield and transaction costs interact across the national market is covered in the Australian Property Market Overview.
This cost structure is also why property's historical comparison against other asset classes is rarely a clean one. Previous cycles of rapid price growth followed by sharp corrections have shaped how analysts assess leveraged real estate against lower-volatility holdings, a pattern examined in detail in historical Australian property bubble analysis. The current 11.3% versus 3.6% state-level growth split is not unprecedented in magnitude, but it is occurring alongside the highest cash rate in 15 years, which changes the risk-adjusted calculus for anyone weighing a refinance against a shift toward cash.
What This Signals for Investors Weighing Asset Classes
The data points in one direction for the near term: location-specific growth, not broad property exposure, is what separates an asset that beats a 4.60% cash rate from one that merely matches it. Investors holding stock in Nedlands, South Perth or Mandurah are sitting on growth figures that justify refinancing and holding. Those exposed to Dandenong, Reservoir or Port Macquarie are facing a genuine opportunity-cost question as nearly 500,000 other mortgage holders reassess their own positions at the same rate. Vendors in slower-moving markets should expect buyers to apply this same comparison at the negotiating table over the coming quarters, pricing in the cash alternative rather than assuming property growth alone will carry the deal.