Is now the right time to buy property?

Since I’ve started at Livewire, one of the most common questions I’ve been getting from friends and family has been, “Is now the right time to buy property?” Whether a first home or an investment property, buying a home is a massive decision. 

So, to weigh up the pros and cons of buying now versus waiting for longer, I reached out to some industry experts to unpack and answer that big question, focusing on the following areas:

• Market timing
• Affordability
• Price outlook
• Property types
• Geographic insights

1. Market Timing

According to property market research analyst, Cameron Kusher, the recent rate cut has provided stability to the property market, particularly in Sydney and Melbourne, with moderate price growth already taking place. Looking ahead, he expects further interest rate reductions to accelerate this trend.

“If you can buy now when there is more stock to choose from and fewer competing buyers than there may be when interest rates are reduced further, that probably makes the most sense.”

Nathan Smith, mortgage broker and director of Birdie Wealth, notes that many prospective buyers have been sitting on the sidelines for the past 18 months, waiting for the right moment to enter the market.

“The rate cut was certainly that sign, and we have seen a flood of buyers enter back into the market.”

While global economic uncertainty remains a factor, Melinda Jennison, President of REBAA and buyer’s agent, points out that Australia’s property market is uniquely shaped by strong population growth and a significant undersupply of new housing.

Evan Thornley, co-founder and CEO of LongView, an integrated residential property business, also agrees that the biggest driver of house prices is population growth and emphasises that “in short, what you buy matters MUCH more than when you buy it.”

“If you lock in a decent chunk of land—what we call a “RODWELL” (Robust Older Dwelling on Well Located Land)—it can easily double in value over ten years, even if you purchase during a slight market upswing. 

He continues: "Meanwhile, a mediocre property (like a shiny new high-rise apartment) may never deliver strong capital growth, no matter how “cheap” it looks today." He goes on to say it’s the change in the direction of interest rates that has a more powerful signalling effect – pushing buyers to try to beat price rises and vendors to hold off selling – creating a supply/demand imbalance that pushes prices up.

The consensus is clear - timing the market perfectly is nearly impossible, and current conditions favour those ready to make a move now. That’s a tick in the “pro” column.

2. Affordability

Consumer sentiment improved as soon as it became clear that rate hikes had paused, and it received another boost when rates were cut. This response highlights just how sensitive Australian households are to interest rate changes.

“Further reductions in interest rates will increase borrowing capacity—each 25 basis point change increases borrowing capacity by about 2% to 2.5%. With people able to borrow more and more buyers able to access the market, we’d expect sentiment to improve and prices to rise,” says Kusher.

The key question, he notes, is whether rising prices will cancel out these affordability gains. For now, he believes that’s unlikely.

On the other hand, Jennison warns of the potential downside:

“Lower interest rates tend to lift buyer sentiment and increase borrowing capacity, making people feel more comfortable taking on debt. However, this can lead to increased demand, especially in supply-constrained markets, which can push prices higher and paradoxically worsen affordability over time.”

Smith points out that current lending conditions include significant buffers, with borrowers being assessed on their ability to afford loans at over 9%. However, lower rates could dramatically shift affordability for many prospective buyers.

“One or two rate cuts would increase their capacity between $30,000 to $100,000 and would certainly give them the potential to buy their dream home.”

This increase in borrowing power could mean that those who were previously priced out of the market now have a real chance to buy.

Thornley adds another perspective: that while interest rates are important to buyers who borrow a lot – mainly first home buyers - in contrast, upgraders in the $1.5m+ range typically rely more on their existing equity, which means their ability to purchase is driven more by how much their current property (land) has appreciated, rather than incremental changes in interest rates.

On the whole, this appears to be another ‘pro’ for buying now - with interest rate cuts set to increase borrowing capacity and drive up prices.

3. Price outlook for 2025

So how do we keep on top of market indicators? Kusher emphasises the importance of tracking fundamental market metrics: clearance rates and prices, along with the number of properties available for sale and how quickly properties are selling.

Smith highlights the pent-up demand among buyers, particularly in Sydney, who have been waiting for the right time to purchase.

“We see 2025 as the opportunity where they will take that opportunity. We've seen an uptick in inquiry from a pre-approval and first home buyer perspective, which leads us to believe that will drive demand and we'll see an increase in property prices.”

Jennison anticipates that markets with tight supply and relatively better affordability, where local home buyers are not overstretched, are more likely to see sustained price growth.

Thornley is blunt: “Predicting house prices is a fool's errand...that said the current indicators are for moderate growth with some differences by city. Either way, it’s critical to focus on a specific property’s long-term fundamentals.

“Again, it’s WHAT you buy (a good individual property) than WHEN you buy it (trying to time the market – including city cycles).”

Whilst it comes with some caveats, that appears to be another tick in the “pro” column.

Based on the evidence provided above, it seems that if you have the capacity to buy a property now, you should probably do so. But, as we all know, making the decision to buy is only half of the equation. There are other factors at play.

4. Property types

Kusher believes that while lower interest rates will benefit all property types, houses - particularly in higher-priced areas - will see the strongest price growth, given the historically strong desire of people to own a house rather than other property types.

Rather than focusing on specific property types, Smith emphasises the importance of understanding local demand. He explains that different areas have different property needs.

“When it comes to property types, it is always a supply and demand conversation. There is a limited supply of houses and plenty of families desperately wanting to get into that market. 

"So I think detached homes and larger townhouses for downsizers to move into would certainly be the two areas that are always in strong demand,” he says. He highlights that regional buyers tend to prioritise space, while inner-city buyers may prefer apartments.

Thornley also adds that big high-rise apartments often sell on stamp duty breaks or depreciation benefits, not because they’re good investments. “Construction costs have soared, and the land component in towers is negligible, so growth prospects are grim. Avoid them. Student accommodation will suffer from the reductions in overseas students and most of them can’t be debt financed (as often below 40sqm) so they lack a strong upside,” he says.

At the end of the day, the segment that always outperforms is the one that harnesses genuine land scarcity.

Jennison too points out that no single property type will perform best across all markets as performance will vary by location: 

“There’s no one-size-fits-all answer, which is why local market knowledge is so essential. Australia isn’t a single property market.”

5. Geographic insights

In 2024, Australia’s property market was a tale of two trends — subdued growth in Sydney, Melbourne, Hobart, and Canberra, while Brisbane, Adelaide and Perth experienced double-digit price gains. Will this divergence persist in 2025? Kusher expects Brisbane, Adelaide, and Perth to continue outperforming, with limited supply remaining a key driver in keeping prices elevated in these markets.

“There is a strong likelihood they still outperform the other markets, mainly because they still have very low volumes of stock available for sale.”

Smith is seeing a shift in attention among property professionals and buyers, with increased interest in Sydney and Melbourne, particularly Melbourne. Jennison believes that while national interest rate changes impact all cities, local economic factors such as job growth, infrastructure projects, and housing supply are more significant drivers of price movements.

“We may continue to see a two-speed market in 2025.”

She echoes the sentiment that Brisbane and Adelaide will maintain their momentum:

“Brisbane, in particular, is attracting increased attention with the 2032 Olympics and the associated infrastructure boost. Melbourne may attract renewed interest due to recent underperformance, but government policy and supply dynamics remain headwinds.”

Thornley too adds that all city markets run on cycles, and that local factors are the biggest drivers to geographic demand. He says plenty of regional areas went bananas during COVID, with remote workers piling in (look at Byron!). Now some regional areas face risk as workers return to cities and local economies depend heavily on single industries like agriculture, mining or tourism. If those sectors wobble, so can property values.

“Unless you really understand those local drivers, the safe bet remains the big east coast capitals —Sydney, Melbourne, Brisbane —where diverse economies and population growth push up land values over time."

The right time, or the right property?

As they say in the classics, the best time to buy property was 20 years ago. It seems, legitimately, that the next best time to buy is today.

With interest rates coming down, borrowing capacity going up, and a previously supply driven market set to come back into equilibrium (or swing back even harder), it seems like buyers might not get a better opportunity any time soon.

That seems odd to say, particularly when national house prices have just hit a record, but for those who have some flexibility, either with property type or geography, you have even more options.

So, do your research, know your market, and focus on well-located and high-quality properties. The rest is largely out of your control.

Are you planning on buying a property this year? Let us know in the comments below.