Back in August, when the Board held at 4.35%, Ben and Evan said one more hike was on the cards and that the October inflation figures would be the thing to watch.

Half right.

The hike does look like it’s coming… but the consensus has moved forward much faster than it looked likely to six weeks ago.

All four major banks now expect a rise on 29 September, and ANZ has gone further, tipping a second one in November that would take the cash rate to 4.85%.

But the number that’s been sitting with us this month isn’t a rates number. It’s this one, from Cotality’s research director Tim Lawless: Longer selling times, larger vendor discounting and persistently low auction clearance rates all point to a buyer’s market — yet buyers are lacking the confidence to transact at the moment.

That gap is the whole story right now.

The conditions buyers say they want

Ask anyone who’s been priced out over the past few years what they’d need, and you’ll get some version of: fewer competing bidders, more stock to choose from, and vendors willing to negotiate.

All three are currently true.

  • National home values fell 0.9% in August — a fifth consecutive monthly decline, leaving values 3.6% below the March peak
  • 93% of capital city suburbs recorded a fall through winter, up from 45.8% in autumn
  • Advertised stock is running 24% higher than a year ago
  • Sales volumes are 15.5% lower than the same time last year

This is, on paper, the market buyers have been waiting for.

And yet… buyers aren’t buying?

In fact, transaction activity has collapsed. Brisbane, Perth and Sydney have each seen sales volumes drop more than 20% year on year.

Interestingly, listings are up despite fewer new homes coming to market — new listings are actually down 6% on last year. The stock is piling up because nothing’s selling, not because everyone’s rushing to sell.

There was one flicker of life in mid-September: the preliminary clearance rate across the combined capitals hit 58.5%, its strongest in 19 weeks, with Melbourne at 63.3%. Encouraging — though auction volumes were still a third below last year, so it’s a better result on a much smaller field.

Why the gap exists

Because falling prices and rising rates arrive together, and the second one frightens people out of acting on the first.

When the cash rate could be 4.85% by Christmas (and markets are now assigning a meaningful chance to that second move) the instinct is to wait. Wait until rates peak. Wait until prices bottom. Wait until it feels safe.

The trouble with waiting for “safe” is that certainty usually arrives late. By the time conditions feel comfortable again, some of the negotiating power buyers have today may already have disappeared.

None of which means now is automatically the time to buy. Plenty of people may be better off waiting — particularly if buffers are thin, employment feels uncertain, or another one or two rate rises would put too much pressure on household cash flow.

But there’s a difference between deciding not to buy and being too unsettled to decide at all. The first is a strategy. The second is what the data above is showing.

What to actually be doing this week

  1. Know your number. Not just “can I afford this today?” but “does this still work if the cash rate reaches 4.85%?” That’s no longer a remote stress-test scenario; it’s now the forecast from one of the major banks.
  2. Check your pre-approval. Serviceability is assessed on current rates plus a buffer. If you were approved earlier this year, the figure has likely moved.
  3. Separate the market from your market. “93% of suburbs” is a national headline. It’s not a substitute for understanding the specific market you’re buying into, which may be behaving nothing like the average.

Join us LIVE on Tuesday

Ben and Evan will be LIVE on YouTube ahead of the 2:30pm AEST announcement on Tuesday 29 September.

They’ll set the scene beforehand, cover the decision live as it lands, unpack the RBA’s statement in real time, then go wider — inflation, the labour market, the property market, and what’s happening in the US, China and Europe.

Set a reminder and watch the RBA announcement LIVE →

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