Too risky to buy, too soon to sell: Property market grinds to a halt

In its latest Home Ownership Report, data showed that two in five or 41 per cent, of Australians believe now is a “bad time” to buy a property.

Similarly, 47 per cent of owners said it is also now a “bad time” to sell a property, leaving the market at a standstill.

The report showed a further 75 per cent have been holding off on buying a property until prices fall more, while 73 per cent said they were delaying a purchase until interest rates stabilise.

Westpac chief executive, consumer, Carolyn McCann, said Australians were not abandoning their property goals but were conflicted by market uncertainty.

"We’re not seeing a mood of crisis, rather a mood of concern,” McCann said.

“The market has paused as people try to make sense of conflicting signals around interest rates, house prices, cost-of-living pressures and the broader economy.”

Housing affordability remained the biggest factor influencing property decisions at 40 per cent, followed by interest rate uncertainty at 32 per cent and falling property prices at 30 per cent.

According to Cotality data, national dwelling values fell 3.7 per cent over the three months to September, with upper-quartile house values in Sydney and Melbourne driving the bulk of the downturn.

Similarly, last month’s fourth rate hike of the year put further pressure on both mortgage holders and buyers, increasing repayments and reducing borrowing capacity.

The move has taken the cash rate to a 15-year high, to the highest setting the nation has seen since October 2011 and well beyond the hikes seen in 2022–2023.

Modelling showed that cumulative increases since February reduced a median-income household’s borrowing capacity by an estimated $90,000.

Additionally, ANZ and Westpac have forecast a fifth rate hike of 0.25 percentage points at the next board meeting on 3 November 2026, which would bring the cash rate to 4.85 per cent.

The report also showed that buyers’ hesitation was fuelled by ongoing supply constraints, with 31 per cent of Australians saying there were not enough properties available or that those on the market don’t meet their needs.

McCann said that while Australians still want to buy and sell property, many have been waiting for greater certainty before moving.

“The challenge is that waiting for the perfect moment can mean missing opportunities that are right in front of you.”

Not all doom and gloom

Despite having concerns, McCann said that Australians have not given up on property, with 81 per cent of Australians citing property as the best way to build wealth.

Data showed four in five first home buyers feel more motivated to buy a property now than 12 months ago, and 55 per cent intended to make a housing change in the next year.

Overall, 19 per cent said they planned to renovate their property, 15 per cent to buy a first or new home, 8 per cent to buy an investment property, and 6 per cent to sell a home.

The report also showed buyers were adjusting their strategies, with 19 per cent making lower offers, 17 per cent reviewing their deposit target, and 16 per cent considering a suburb previously outside their budget.

With buyers still uncertain but willing to reconsider, real estate coach and LockedOn co-founder and director Aaron Shiner encouraged agents to re-engage their databases.

He said agents should contact previous potential buyers and tailor listings to their needs, giving them valuable local market insights rather than generic sales messages.

Similarly, Raine & Horne Group executive chairman Angus Raine said highlighting existing features, making minor cosmetic upgrades, improving storage, and showcasing outdoor spaces will strengthen buyer appeal without major renovations.

Shiner said to win listings, agents should promote the benefits of selling before competition builds, use market reports and short videos to generate interest, and showcase detailed case studies that prove their ability to sell.

McCann said that while market conditions will continue to change, the Australian dream of ownership remains, underpinned by the belief that property creates long-term wealth.

"The reality is that property decisions are rarely driven by just one factor. Buyers who are financially prepared and have found a property that meets their needs should focus on their long-term goals rather than dwell on predicting every market movement.”