Should I buy now, or wait for rates or prices to drop?

Bayley Clarke · Mortgage broker on the road · Last checked 12 November 2026 · 8 min read

The short answer

Nobody can tell you what rates or prices will do next. So the real question isn't when. It's whether the numbers work for you today.

If you can afford the repayments now, with room to spare, and you plan to hold for years, the month you buy matters a lot less than people think. If you can't, waiting for a rate cut won't fix it, and the work is on the deposit, the debts or the price range instead.

What waiting actually trades

The biggest thing I hear is, I'll just wait for rates to drop. Everyone is thinking that. So ask the next question: what happens to property when rates come down? Every man and their dog suddenly wants to buy, and that tends to show up in prices. The rate you waited for arrives, and the place you wanted can cost more. The saving on the repayment gets eaten by the bigger loan. That's the trade people don't run when they decide to wait: Should I wait for rates to drop or the market to dip before I buy?

Waiting also has a running cost. Every month you wait is another month of rent. If your lease is ending, start looking early rather than late. Deadlines are where people stretch the budget: My lease ends in six months. When should I start making offers?

Waiting for a sign? Let's look at your numbers both ways

Half an hour on the phone. I'll show you what you can borrow today, what the repayment looks like per week, and what changes if you wait. Then the call is yours.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

Should I wait for rates to drop before buying? Rates move borrowing power, not just repayments

Rates and prices feel like they should move together, but they're set by different things. Prices come from buyers and sellers. What you can borrow comes from the bank checking whether your income can carry the repayments, and that test runs on interest rates plus a buffer on top. So when rates went up this year, borrowing power dropped for most people, regardless of what prices did. Where prices eased at the same time, the question is which one fell further, and for most people borrowing fell faster: Prices are dropping, so why can I borrow less?

How much did it move? It depends on your income and debts, but a handful of rate rises can take tens of thousands off what a single person or a couple can borrow, because every rise lifts the rate the bank tests you at too: How much did the rate rises this year cut off how much I can borrow?

Which leads to the trap I see most. Someone got pre-approved months ago, assumes the number still stands, and makes offers at the old figure. The bank reassesses at today's rates before formal approval, and most pre-approvals only last around 90 days anyway. Rerun it before you offer: My pre-approval was from back in June. Does it still count after all these rate rises?

What happens if house prices fall after I buy?

This is the fear that keeps most fence-sitters on the fence, especially with a small deposit. If prices dip after you buy with 5% down, you can end up owing more than the place is worth. The bank isn't going to knock on your door asking you to top the loan back up, and it isn't going to sell your house from under you. It's already lent you the money. As long as the repayments are being made, there's nothing for it to act on: What happens if prices fall after I buy with a 5% deposit?

What it costs you is headspace, knowing you might have paid more than you needed to. But that's only ever obvious in hindsight.

What is negative equity, and when does it matter?

Equity is the gap between what your property is worth and what you owe. Worth $600k, owe $450k, you've got $150k. Negative equity is that gap going the other way. Worth $430k, owe $450k, you're $20k under. That's it: What is negative equity?

If you're staying put and paying the loan, it's a number on a statement. Where it bites is if you have to sell or refinance before the value comes back, because then the shortfall is real money. So the one thing worth planning around is your hold period. Buy on a budget you can carry for years, not months,. If the budget only works because prices keep rising, that's not a budget, it's a bet.

Is it better to buy over Christmas? Seasonal timing

It can be. Plenty of buyers switch off over the holidays, while some sellers still want it done before the new year, and that can give you room to negotiate: Is it smarter to buy over the Christmas holidays when there are fewer buyers around?

The catch is that banks, valuers, conveyancers and agents all run lighter between Christmas and mid January. So line up your finance and your conveyancer before the break, allow a bit more time in the finance clause, and don't buy just because it's December. A quiet market isn't a guaranteed discount.

Buy a unit first or wait for a house? Stepping stone or forever home

A lot of waiting isn't really about rates or prices at all. It's waiting for the forever home to become affordable. You don't jump to step 19. For a lot of people the first place is a stepping stone: something you can afford, with repayments you can live with, that gets you into the market and starts building equity you can use for the next one: Can my first home be something cheaper, like a unit, instead of holding out for my forever home?

Start from the numbers, then look. Know what you can borrow and the repayment per week, then search that bracket. More on that in How to buy your first home: every pathway, step by step

The honest part: I'm not telling you to buy now

I'm a broker, and I get paid when a loan settles, so read this with that in mind. What I'm actually saying is narrower. Waiting for a rate cut isn't a plan, because the cut tends to move the price too, and nobody can time the bottom. The plan is knowing whether it's affordable for you today, with room to spare. If it isn't, I'll tell you, and we'll work out what has to change first.

Know your numbers before you decide

Tell me what you're looking at and what you earn. I'll run it across the lenders, show you the repayment per month and per week, and tell you straight whether it works now or what would need to change.

Book a 30 minute call Call 0437 189 939

No application, no credit check, nothing on your file. Just the numbers.

Common questions about buying now or waiting

Should I wait for interest rates to drop before buying a house?+

Waiting for a rate cut isn't a plan on its own. When rates fall, more buyers come in and that often shows up in prices, so the saving on the repayment can be eaten by a bigger loan. The better question is whether the repayments work for you today, with room to spare.

What happens if house prices fall after I buy?+

You may end up in negative equity, owing more than the property is worth. The bank won't ask you to top the loan up or sell your home while you keep making repayments. It matters if you need to sell or refinance before the value recovers, so buy on a budget you can hold for years.

What is negative equity?+

Negative equity means your property is worth less than what you owe on the loan. If your home is worth $430k and you owe $450k, you're $20k in negative equity. It's a number on a statement while you're paying, and real money only if you have to sell or refinance.

Is it better to buy a house over Christmas?+

It can be. Fewer buyers are looking and some sellers want it done before the new year, which can give you room to negotiate. Banks, valuers and conveyancers run lighter over the break though, so sort your finance before the holidays and allow extra time in the contract.

Should I buy a unit first or wait until I can afford a house?+

For a lot of first home buyers, a cheaper first place is the step that gets them into the market. Repayments you can live with, equity building over time, and the option to sell and upsize or keep it as an investment later. Start from your numbers, then look at what fits.

Next question

How to buy your first home

The whole path from first conversation to keys, once you have decided to go.