A client sat across from me last week, coffee going cold, and asked the question I have been hearing on repeat since Melbourne Cup Day: “Joe, should I buy property now or wait?”
Fair question. The Reserve Bank has just lifted the cash rate to 4.85%, the fifth rise this year. National home prices have now fallen for seven straight months and sit around 4.3% below their peak. Every headline is telling you the sky is falling, and every second dinner party conversation has someone confidently predicting another 10% drop.
I get it. When the news is this loud, standing still feels like the safe option.
But after 13 to 15 years in sales, negotiation and property investment, and after watching thousands of members in our 78,000+ Aus Property Investors community wrestle with this exact decision, I can tell you that waiting is rarely as safe as it feels. It is just a different kind of risk, and it is one most people never put a number on.
So let me walk you through how I actually think about whether to buy or hold off, and what the investors who come out ahead do differently.
Why “Buy Property Now or Wait” Is the Wrong First Question
Here is what most people get wrong. They treat timing as the main decision, when it is actually the third or fourth.
The question that matters first is whether you are ready. Not the market. You.
That means three things:
- Your finances can handle the purchase at today’s rates, with a buffer. Not at the rates you hope we will see next year.
- You have a clear strategy. Growth, cash flow, or a blend, and a reason this purchase fits your bigger plan.
- You know what you are looking for. A specific type of property, in a specific type of location, that meets clear criteria.
If any of those three are missing, the answer is wait. Not because of the market, but because you are not ready to buy well in any market.
If all three are in place, then we can talk about timing. And that is where the conversation gets interesting.
What a Falling Market Actually Means for Investors
When prices are rising, everyone wants in. Open homes are packed, agents stop returning calls because they do not need to, and you end up competing against 15 other buyers for a property you only half like.
When prices are falling, the mood flips. Buyer numbers thin out. Days on market stretch. Vendors who need to sell start listening to offers they would have laughed at six months ago.
To be honest with you, some of the best deals I have negotiated for clients happened in markets exactly like this one.
Rising rates squeeze borrowing capacity
Every rate rise pulls down how much the banks will lend you. Lenders assess your loan with a serviceability buffer on top of the actual rate, so each 0.25% increase knocks a real chunk off your maximum borrowing figure.
That matters in two ways. First, it may change what you can buy. Second, it does the same thing to every other buyer in the market, which is a big part of why competition has cooled. If you want to see where you stand, our guide on how to increase your borrowing capacity covers the levers that genuinely move the number.
You can track the official cash rate and decision history directly on the Reserve Bank of Australia’s cash rate page.
Negotiating power shifts to the buyer
In a hot market, the vendor holds the cards. In a softening one, you do.
That shows up in price, but also in terms. Longer settlements, building and pest clauses, finance clauses, a vendor fixing something before settlement. These are all easier to secure when you are one of three buyers instead of one of thirty.
Not every market moves together
Here is where folks get caught off guard. “The market” is not one thing. A 4.3% national fall can hide some locations still rising and others dropping much harder. Different cities, and different suburbs within those cities, sit at different points in the property market cycle.
So when someone asks me whether to buy property now or wait, my first response is usually: “Where?”
The Hidden Cost of Waiting
Most people who decide to wait only see one side of the ledger. They picture the money they will save if prices drop another 5%. They never picture what it costs them if they do not.
Let me show you what I mean with some simple numbers.
Say you are looking at a $650,000 property. You decide to wait 12 months for prices to fall further.
Scenario one: prices drop another 5%. You buy at roughly $617,500. You have saved $32,500 on the purchase price. Nice result.
Scenario two: prices are flat. You buy at $650,000, a year later than you could have. You have saved nothing, and you have paid another year of rent (or missed another year of rental income), while your deposit sat in an account earning less than inflation.
Scenario three: the market turns earlier than the headlines expect. Prices recover 5% while you are watching. You now pay around $682,500, and you are competing with the crowd that has just rushed back in.
The person waiting is betting that scenario one happens. But nobody, not the banks, not the economists, not the bloke at the barbecue, can tell you which of those three it will be. I have seen this play out dozens of times. By the time the media declares the bottom, prices have usually already moved off it.
There is also a quieter cost. If you are building a portfolio, every year you delay your next purchase pushes your whole plan back a year. Compounding growth rewards time in the market far more than perfect timing. A year lost at the start is often a year added at the end.
The Real Risks of Buying Right Now
I am not going to pretend buying in a falling market is risk free. It is not.
Here are the risks I take seriously with every client at the moment:
- Cash flow pressure. With rates where they are, holding costs are higher than they were a year ago. If you have not stress tested your numbers, now is the time. Our breakdown of the holding costs of an investment property is a good place to start.
- Further rate rises. The Reserve Bank’s last decision was a split vote, which tells you nothing is locked in either direction. Plan for at least one more rise, not one cut.
- Buying the wrong asset because it is cheap. A falling market makes poor properties look like bargains. A unit in an oversupplied tower, discounted 10%, is still a unit in an oversupplied tower.
- Valuation risk. In a softening market, bank valuations can come in below the contract price. Make sure your finance is solid before you sign, and understand what your pre-approval does and does not guarantee.
And that is where most people come unstuck. They either let fear freeze them completely, or they jump at the first discounted listing without doing the work. Neither is a strategy.
How to Decide: Buy Property Now or Wait
So how do you actually make the call? Here is the framework I use with clients. Run yourself through it honestly.
Step 1: Stress test your finances at higher rates
Take your expected loan and add 1% to 2% to today’s rate. Can you still hold the property comfortably, with a cash buffer of at least three to six months of repayments and expenses? If the answer is no, wait and build your position. If it is yes, keep going.
MoneySmart has a useful set of home loan tools and guides if you want to run the numbers yourself before speaking to a broker.
Step 2: Check your time horizon
Are you planning to hold this property for 10 years or more? If so, a 5% movement in the next 12 months matters far less than buying the right asset. If you think you might need to sell within three years, a falling market is a genuine risk and you should be more cautious.
Step 3: Focus on asset quality, not headlines
The question is not “Is the market cheap?” It is “Is this specific property investment grade?” Land content, scarcity, owner occupier appeal, and location fundamentals drive long term growth. If you are not sure what to look for, our guide to identifying investment grade property breaks it down.
Step 4: Separate the emotion from the decision
Fear and FOMO are two sides of the same coin. In a rising market, people overpay because they are scared of missing out. In a falling market, people freeze because they are scared of losing. Both feelings push you towards bad decisions. If you recognise yourself in either camp, read our pieces on FOMO in property investment and analysis paralysis.
Step 5: Make a decision you can live with in five years
Picture yourself in 2031. Will you be more upset that you bought a quality property at a price that turned out to be 3% above the bottom, or that you sat on the sidelines for two years and bought nothing at all? For most investors, it is the second one.
What Our Clients Are Doing Right Now
I will be upfront about my bias. I run a buyers agency, so of course I am going to tell you there are opportunities. But I also have a reputation to protect, and I have told plenty of people to wait when the numbers did not stack up.
What I can tell you is what we are seeing on the ground. Our clients who are buying right now are doing so with less competition, more negotiating room, and better terms than they would have had 12 months ago. They are being picky. They are walking away from deals that do not meet their criteria. And they are focusing on locations where the fundamentals are still strong, regardless of what the national headline says.
Across our deals, our clients have averaged a 22.35% return compared with roughly 6% general market growth. That gap does not come from timing the market perfectly. It comes from buying the right asset, in the right location, at the right price, and then holding it.
The logic is fairly straightforward. Time in the market, with the right asset, beats timing the market almost every time.
Frequently Asked Questions
Is it a good time to buy investment property in Australia right now?
It can be, if your finances are strong and you have a clear strategy. Rising rates have cooled competition, which gives prepared buyers more negotiating power and better terms. The key is buying an investment grade asset and making sure you can hold it comfortably if rates rise again.
Will Australian house prices keep falling in 2027?
Nobody can tell you that with certainty, and I would be wary of anyone who claims they can. Prices have fallen for seven months nationally, but different cities and suburbs are moving at very different speeds. Focus on the fundamentals of the specific location rather than national forecasts.
Should I wait for interest rates to drop before buying property?
Not necessarily. When rates start falling, borrowing capacity increases for everyone, and competition usually comes back quickly. Many investors find that by the time rates drop, prices have already started moving again, so they end up paying more for the property even if the loan is cheaper.
How do I know if I am ready to buy an investment property?
You are ready when you can service the loan at higher rates with a buffer, you have a clear strategy for the purchase, and you know exactly what you are looking for. If any of those are missing, use the waiting time to fix them. A buyers agent or broker can help you check where you stand.
Key Takeaways: Buy Property Now or Wait
- Whether to buy property now or wait depends first on your personal readiness, not on market headlines.
- Falling markets reduce buyer competition and shift negotiating power towards prepared buyers.
- Waiting has its own costs, including lost growth, extra rent or missed rental income, and delays to your wider portfolio plan.
- Always stress test your finances at 1% to 2% above current rates before committing to a purchase.
- Asset quality and location fundamentals matter far more over a 10 year hold than a small price movement in the next 12 months.
- Fear and FOMO both lead to poor decisions, so build a clear framework and stick to it.
Buy Property Now or Wait: Final Thoughts
Nobody rings a bell at the bottom of the market. If you are waiting for a clear signal that it is safe to buy, you will probably get it about six months after the best buying window has closed.
That does not mean you should rush in. It means you should get ready. Sort your finances, stress test your numbers, get clear on your strategy, and know exactly what a good property looks like for you. Once you have done that, the decision on whether to buy property now or wait becomes much simpler, because you are making it on your terms, not the media’s.
To be honest with you, the investors I have watched build serious portfolios over the last 15 years were rarely the ones with perfect timing. They were the ones who bought quality assets when others were hesitating, and then had the patience to hold.
If you want a second set of eyes on your situation, that is exactly what we do. We will look at your finances, your goals and the markets that actually make sense for you right now, and give you a straight answer on whether to move or hold.
