With mortgage rates lingering above 6%, buyers with ready cash continue to dominate both the lowest and highest ends of the housing market.

Roughly one-third of all home sales in the first half of 2025 were completed entirely with cash, according to a new report from Realtor.com.

That figure represents only a 0.6% decline from a year earlier.

Cash offers surged during the height of the COVID-19 housing frenzy, when buyers competed fiercely for limited inventory. Those offers remain appealing because they close faster and avoid the risk of financing or appraisal complications — key advantages for sellers seeking certainty.

As borrowing costs rose beginning in mid-2022, wealthier buyers increasingly used cash to sidestep expensive loans, the report said.

“Their persistence underscores both the wealth concentration driving housing demand and the challenges faced by mortgage-dependent buyers in today’s high-cost housing market,” said Hannah Jones, senior economic research analyst at Realtor.com.

A buyer’s disadvantage

Although cash deals have dipped slightly from their post–Great Recession peak, sellers still tend to favor them over financed offers.

Harrison Stevens, vice president of marketing at TurboTenant, recalled losing out to a cash buyer.

“I had found a property I really liked and had formed a good relationship with the seller,” he said. “At the last second, they reached out and told me they ended up going with a cash buyer instead, which was a shock.

“I was glad that I hadn’t gotten too far in the process logistically, but it was definitely a major disappointment because in my mind I had gotten so far.”

Who pays in cash

Realtor.com data show four main types of cash buyers; investors, second-home shoppers, high-net-worth individuals and older homeowners leveraging equity.

Investors — especially large institutional players — account for a significant portion of cash deals. Deed data indicates that limited liability companies and corporations represent a disproportionate share of all-cash transactions.

In 2024, the share of investors buying with cash was nearly twice the overall cash-sales rate, the report added.

Buyers of second homes, particularly in coastal or vacation destinations, often pay upfront. Older and wealthier buyers also rely less on financing.

Jones said that these groups tend to be longtime homeowners armed with accumulated equity they can put toward their next home purchase without having to take out a mortgage.

U-shaped market

Cash purchases cluster at the extremes of price.

About two-thirds of homes under $100,000 sold for cash — along with more than 40% of homes priced above $1 million.

Among properties listed between $2 million and $5 million, over half were cash transactions. For those between $5 million and $10 million, more than 60% were bought outright.

“This creates a U-shaped relationship between price and cash prevalence,” Jones said, “suggesting wealth-driven purchases at the high end and credit/income barriers, lack of financing availability, or the presence of investors at the low end.”

Miami tops cash-sale markets

Among major metros, Miami led the nation with 43% of sales completed in cash during the first half of 2025. More than half of the city’s million-dollar-plus homes were all-cash purchases.

“Liquidity rules Miami’s super prime luxury market,” said Ana Bozovic, founder of Analytics Miami. “Past $2,000 a square foot, over 80% of single-family and condo deals are all cash. Cash is appealing to sellers because it means certainty. There is no appraisal risk, no financing contingency and no delay.”

She said high-end buyers tend to be globally mobile, highly liquid individuals for whom purchasing with cash confers privacy, speed and negotiating power.

Following Miami were San Antonio (39.6%), Kansas City (39.2%), Birmingham and Houston (38.8% each), and St. Louis (38.1%).

Looking ahead

With affordability strained and rates high, cash buyers maintain a competitive edge—particularly as many homeowners remain “locked in” with low-rate mortgages and reluctant to sell.

“When homes do hit the market, cash buyers can move quickly, often setting the price tone for everyone else,” Jones said.

If mortgage rates drop next year, she noted, that dynamic could shift. More buyers might rely on financing — and cash transactions could lose their dominance.

It’s a staple of Australian homeownership, touted as a savvy way to slash interest and pay off your mortgage faster.

But a groundbreaking new study from the University of Sydney has cast a shadow over the humble mortgage offset account, revealing that its financial benefits disproportionately favour Australia’s wealthiest households, leaving many everyday homeowners potentially out of pocket.

The findings, published in the prestigious Economic Record journal by Dr James Graham, a senior lecturer in the School of Economics, mark the first academic deep dive into how these popular products truly impact the property dreams of Australians.

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And the revelations are set to spark a fierce debate about transparency, fee structures, and consumer education across our nation’s competitive mortgage market.

“Around 40 per cent of Australian mortgage holders use mortgage offset accounts, which allow savings held in linked accounts to reduce the interest paid on home loans – for example, a $1 million mortgage with a $100,000 balance held in the offset account would result in interest paid on just $900,000,” Dr Graham explains.
“But until now, little was known about who uses mortgage offset accounts, how they’re used, and who actually benefits.”

Sounds like a no-brainer, right? But Dr Graham’s research, based on a sophisticated macroeconomic model of household life-cycle decisions using Australian data, paints a far more nuanced picture of who actually reaps the rewards.

The property wealth gap exposed

The study’s most striking conclusion is that households with higher incomes, larger mortgages, and more expensive homes are significantly more likely to benefit from offset accounts.

For those battling rising interest rates and the ongoing cost-of-living crunch, this news could be a bitter pill to swallow.

Many others, it seems, may be paying annual fees without gaining any meaningful savings, effectively subsidising the wealthy.

“Offset accounts can be a powerful tool for reducing mortgage interest, but they’re not a one-size-fits-all solution,” Dr Graham warns.

“Many households are potentially signing up for these products without fully understanding how they work, and in some cases they may actually be worse off.”

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This “confusion,” as Dr Graham puts it, is hardly surprising.

The market is a minefield of varying offers: some lenders provide offset accounts for free, others charge annual fees of several hundred dollars, and some even bake higher interest rates into the underlying mortgage.

A call for fairer play in the property market

Dr Graham’s modelling suggests that alternative pricing structures could dramatically improve equity in the mortgage market, opening up the advantages of offset accounts to a broader spectrum of homeowners without the penalty of prohibitive fees.

“The economic disparities in the data suggest the possibility that alternative mortgage pricing could improve access and more evenly distribute the benefits of mortgage offset account use,” he states.

This isn’t just about individual savings; it’s about the health and fairness of our entire property landscape.

Mortgage providers and financial market regulators are now being urged to scrutinise current offset pricing policies.

The goal? To reduce the lifetime costs of mortgage finance for a larger number of households, potentially boosting social welfare and making homeownership more genuinely accessible.

Transparency and education: The missing links

A critical issue highlighted by the research is the glaring “lack of transparency” in how these products are priced.

With a mix of annual fees, varying interest rates, and often hidden costs, it’s incredibly difficult for consumers to make an informed decision about whether an offset account is truly right for their financial situation.

“If banks offered clearer and more flexible pricing options, we could see broader access to the benefits offset accounts can provide,” Dr Graham argues.

Beyond pricing, the study underscores a pressing need for greater consumer education.

Many borrowers may not realise that the effectiveness of an offset account hinges on their ability to maintain a healthy savings balance.

Without it, the interest savings simply won’t outweigh the fees.

“Lenders or mortgage brokers could provide more information and better educate households to help make informed decisions about mortgage offset accounts. This is necessary to ensure that offset account users are getting the interest savings they expect from these products,” Dr Graham concludes.

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A new report from Ray White Commercial Western Sydney has revealed a staggering gap between residential development approvals and construction rollout.

The Western Sydney Residential Development Overview report revealed that despite approximately 80,000 dwellings sitting in the pipeline for development, only 5,369 homes are currently under construction across the region.

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The report confirmed the region continues to absorb the majority of the NSW population growth with 57.7 per cent of the state population increase and nearly 60 per cent of non-detached dwelling approvals.

South Western Sydney’s high growth accounting for 519 homes, significantly lower than the 7,335 required annually.

Ray White Commercial Western Sydney director Peter Vines said this is a housing crisis hidden in plain sight.

“The numbers suggest progress on paper, but the physical delivery of homes is falling dangerously behind,” he said.

The updated demographic modelling has moderated annual housing requirements to 25,636 dwellings which is down from last year’s peak of 33,596.

This change in figure was reported not due to reduced demand, but instead growth expectations amid migration and housing pressure.

Mr Vines said the money is flowing but the homes are not keeping pace with investor appetite high, but limited stock holding back market momentum.

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The October expansion of the Home Guarantee Scheme is set to add demand surge, however, Mr Vines said without new homes it risks fuelling price inflation rather than improving access.

With the South West precinct driven by Western Sydney Airport and multi-billion dollar infrastructure investment, Mr Vines said this is building an economic hub with nowhere for the workforce to live.

“If housing doesn’t keep up, the airport could become a policy failure,” he said.

While there are 80,000 dwellings in various planning stages, actual construction remains stalled.

The gap between approval and project commencement is stalled by factors including land constraints, funding issues and bureaucratic lags.

The report states areas such as Parramatta and The Hills have shown promise due to the recent Transport Oriented Development (TOD) reforms designed to boost medium-density housing near metro stations.

However, there has been little to alleviate housing stress in the outer growth corridors such as Camden and Liverpool.

Mr Vines such reforms are helping areas that already have infrastructure but are neglecting the fringe communities that need the most urgent.

“Western Sydney isn’t just the future of NSW, it’s the present,” Mr Vines said.

“But if we don’t turn plans into homes, we’ll underestimate the entire growth model.”

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The post 80,000 homes approved but almost none being built appeared first on realestate.com.au.

A US start-up says it can build homes in 40 days for less than the cost of a new car — but experts warn the prefab dream may not be the fix Australia needs.

Capsul, founded by entrepreneur Ali Zaidi, is launching in Australia with a $10m investment to deliver modular “designer pods” priced between $80,000 and $150,000.
Each home is built off-site, fitted with a kitchen, bathroom, flooring and solar-ready wiring, then delivered ready to move in.
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Mr Zaidi said the goal was to give young Australians, downsizers and small investors a faster, more affordable way to own property.

“Capsul isn’t just a housing company, it’s a revolution,” he said.

“In 30 to 40 days we can build a space that changes a life, powers a business or builds a community.”

The Capsul founder said early interest had come from first-home buyers, retirees and Airbnb hosts, and that plans were underway for eco-resorts and “Capsul Villages” across regional Australia.

“The old dream doesn’t work for the new generation,” Mr Zaidi said.
“For a fraction of the cost, Capsul buyers get a modern, beautifully designed space built in weeks, not years.”

Melbourne buyers’ advocate and mortgage broker Madeleine Roberts said the concept had merit, but warned it wouldn’t solve the affordability crisis.

“The tiny home idea isn’t new,” Ms Roberts said.
“You can make a container look great, but if it’s sitting on cheap land with no jobs or infrastructure, people aren’t going to live there.”

Ms Roberts said the homes could work as granny flats or second dwellings, especially with new planning rules allowing faster approval.

“If the government backed families to add one of these in their backyard, it could really help,” she said.

“They’re cheap, quick and practical — that’s where they make sense.”

But the buyers advocate and mortgage broker said the real problem was still land.

“Even if the build is $150,000, land on Melbourne’s fringes starts around $700,000,” Ms Roberts said.
“You’re still up around $850,000. That’s not affordable housing, it’s just a smaller house with the same price problem.”

Ms Roberts said the major problem with tiny homes is that the banks see them as depreciating assets.

“They’re not like a house you can easily resell, without building approval you can’t lease them, and insurers won’t touch them,” she said.

Mortgage broker Rebecca Stella said the homes could still play a role as short-term accommodation or lifestyle dwellings.

“If they’re designed well and meet building codes, they could work in coastal areas like Torquay or Lorne,” Ms Stella said.
“People want flexibility — a space for grandparents or guests — and these pods could fill that gap.”

Ms Stella said modular designs would appeal to buyers chasing a minimalist lifestyle.

“It’s not going to fix the market overnight, but it’s part of the shift towards smaller, smarter living,” she said.
“People are realising they don’t need a big block to have a good life.”

“While the modular homes won’t end the housing crisis, what this idea reflects is the growing demand for faster, more flexible housing and a generation searching for a different way to live.”

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Homeowners in California might be facing a steep increase in their insurance costs. The California FAIR Plan, the state’s insurer of last resort, is seeking an average rate hike of 35.8%. If granted, this would be the largest hike recorded by the FAIR Plan in several years. 

This proposed rate hike would be the largest increase since 2019, when rates rose by an average of 20.3%. In 2021 and 2023, rates went up by 16% in each year, although 2023’s hike was cut down by California insurance commissioner Ricardo Lara, as the FAIR Plan originally sought a 48.8% rate increase. 

“By statute, FAIR Plan rates must be sufficient to pay anticipated claims and expenses,” FAIR Plan spokesperson Hilary McLean said in a statement. “The FAIR Plan is working closely with the California Department of Insurance to ensure its rates reflect the current risk portfolio, expenses and growth as the state’s insurer of last resort.”

The request came after the FAIR plan incurred billions of dollars in losses due to the wildfires that plagued the state in January 2025. In total, estimated losses from the January wildfires came in near $4 billion, which is prompting the FAIR Plan to assess an additional $1 billion to its member carriers that would enable it to pay all of the claims. 

If granted by the state’s insurance commissioner, the new rates would apply in April 2026. While the average rate hike is projected to be 35.8%, the exact rate change would differ by property, depending on its location and wildfire risk. Additionally, homeowners can apply for discounts of up to 15% if they undertake wildfire risk mitigation efforts on their property. 

The FAIR Plan is currently facing additional scrutiny from the state after several homeowners filed lawsuits. They allege that insurers have refused to properly test and remediate homes that were infiltrated by smoke, soot and ash during the January fires. The suits resulted in a Superior Court judge ruling in June that the FAIR plan’s smoke damage policy violated state laws.