Understanding the Australian property market

For an owner-occupier planning to hold a property for 7 to 10 years, time in the market has historically outperformed attempts to time the market. The entry price matters less than buying within one's means at a sustainable repayment. For investors, the yield and cash-flow calculations for the specific property matter more than broader market conditions at the time of purchase.

No. National prices have fallen meaningfully on several occasions, and individual cities have experienced corrections while others grew strongly (Perth and Sydney frequently move in opposite phases). The long-run trend has been strongly upward, but that long run has included flat and falling periods lasting several years.

Interest rates affect prices mainly through borrowing capacity. As a rule of thumb, a 1% change in mortgage rates moves a typical buyer's maximum loan by roughly 8 to 10%, and prices tend to follow capacity with a lag of several months, amplified or dampened by sentiment.

Waiting also carries a cost: rent paid in the interim, and the risk that prices or rates move unfavourably. If a fall of a few percent would make the difference between a comfortable and a stretched purchase, the underlying issue is the budget rather than the timing. It is generally more useful to test scenarios in the BorrowWise property affordability calculator than to rely on a forecast.

BorrowWise publishes suburb guides covering housing stock, buyer profile and lending considerations for each suburb. The guides deliberately do not publish price data. A broker can supply comparable sales for any suburb under consideration as part of a free assessment.