Should You Buy Now Or Wait For A Potential Rate Cut?

This is one of the most common questions buyers ask when interest rates are expected to change.

With ongoing commentary around potential rate cuts, many people who are thinking about entering the property market are wondering whether it makes sense to buy now or wait. It’s a fair question, but interest rates are only one part of a much bigger decision.

Why interest rates are only part of the picture

When you buy property, you are usually making a long term decision. Most buyers will hold property through multiple market cycles, and over time, that is typically how financial wealth is built.

Trying to perfectly time the market, whether based on interest rates or short-term price movements, is rarely straightforward and often impossible. Housing markets are complex, influenced by a mix of economic conditions, supply, demand, policy settings and local factors that are difficult to predict with precision.

For that reason, long term data tends to be more useful than short-term forecasts.

What long term property data tells us

Over the decade to January 2024, Australia’s median property value rose by 80.1 per cent, according to the PropTrack Home Price Index. Growth was stronger in combined capital cities at 92.5 per cent compared to 75.7 per cent in combined regional areas, while house price growth exceeded unit growth over the same period.

To put that trend into context, the table below shows how property values have changed across capital cities, regional areas and nationally, using PropTrack data.

What the data shows

There are a few important takeaways from this data.

First, despite short-term fluctuations, most capital city and regional markets show meaningful growth over time. This reinforces the idea that time in the market has historically mattered more than trying to pick the perfect moment to buy.

Second, growth has not been uniform. Some locations have experienced stronger annual growth than others, which highlights why property selection and local market conditions matter more than national averages.

Finally, even markets that have seen some decline from their peak values remain significantly higher over the longer term. This is often where buyers who delay in anticipation of a better entry point find that prices have already moved by the time conditions feel more certain.

So, should you buy now or wait?

Ultimately, the decision to buy now or wait depends on your personal situation.

For some buyers, now will be the right time. For others, waiting makes sense. Factors such as job security, income structure, deposit position, borrowing capacity and long-term plans are usually far more important than trying to predict the next interest rate move.

Understanding what you can comfortably afford, how different rate scenarios affect repayments, and how a purchase fits into your broader financial plans is generally more useful than relying on headlines or forecasts.

If you are unsure, the most practical step is to run the numbers properly. That allows you to compare scenarios, understand the trade-offs and make a decision that suits your circumstances rather than reacting to market noise.

If you would like to talk through your options and understand what buying now or later could look like for you, I am happy to have a conversation and work through the detail.

Daniel Jones, Founder and Finance Broker at Specialist Broking.

Photo: Maggie Langtry