Changes to Lending Conditions in 2026 — How They Are Impacting Property Transactions
Lending conditions in 2026 have shifted in ways that are not always visible at the outset of a property transaction. While interest rates receive most of the attention, the more practical impact sits in how lenders assess applications and how long those processes now take.
Across both jurisdictions, we are seeing extended approval timelines, more detailed verification requirements, and increased scrutiny on borrower financial positions. This has a direct effect on how property transactions progress.
Where settlement timeframes previously aligned with lender processing expectations, there is now a growing gap between contractual deadlines and approval timing. Buyers continue to enter contracts based on earlier assumptions, but lenders are operating under revised internal assessments that extend beyond those expectations.
That difference is where pressure begins to build.
If finance is not approved within the relevant period, buyers may need to request extensions. Where contracts do not clearly provide for those extensions, sellers may be under no obligation to grant them. This can place buyers in a position where they remain legally committed while still waiting on lender confirmation.
For transactions that have already become unconditional, the risk increases further. Once the contract is unconditional, the obligation to complete is fixed. Delays in finance at that stage may result in default interest, formal notices, or in more serious cases, termination.
This is why early structuring now carries more weight than it previously did. Whether you are buying in New South Wales or buying in South Australia, the contract needs to reflect realistic lender timelines rather than relying on past expectations.
Sellers are also impacted by these changes. Delayed buyer finance can affect linked transactions, including onward purchases. Through both our selling process in NSW and selling process in South Australia we are increasingly advising sellers to consider how settlement timing and extension provisions are managed within the contract.
Another issue now appearing more regularly is late-stage reassessment. Buyers may receive pre-approval and proceed on that basis, only for lenders to undertake further checks immediately prior to issuing formal approval. Changes in employment, expenses, or credit position can lead to unexpected outcomes at a point where the contract has already progressed significantly.
From a legal perspective, the contract continues regardless of where the lender sits in that process.
This is where coordination becomes critical. The contract, the finance process, and the timeline must operate together. Where they do not, the transaction can become strained very quickly.
The most consistent issues we see involve:
entering contracts before the finance position is sufficiently advanced
assuming pre‑approval carries the same weight as formal approval
underestimating lender processing times
not allowing flexibility within the contract for delay
The market itself remains active. Transactions are continuing. What has changed is the margin for timing error. Where contracts are structured carefully and expectations are aligned at the outset, transactions proceed with fewer complications.
Where assumptions are relied upon, delays and pressure tend to follow.
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