Why buyers are defying rate hikes and rising fuel prices
Rate hikes and soaring fuel prices aren’t dampening home buyer enthusiasm, with a strong majority of Aussies still believing the time to buy is now. We look at why home-buying sentiment remains so high.
Petrol prices have been stealing the headlines lately. But behind the scenes, Aussie homes have been notching up fresh gains.
Over the past year, home values rose 9.9% nationally – the fastest 12-month growth since June 2022.
And despite the current fuel crisis and two rate hikes in 2026, plenty of buyers are expecting values to climb higher.
A recent Westpac-Melbourne Institute survey found “a clear majority of consumers still expect (home) prices to rise” over the next year. Only around one in ten think values will fall.
These expectations of price growth could be behind Westpac’s finding that 83% of Australians think now is the time to buy.
The right time to buy a home
Buying a home is something most of us only do a few times in our life. It’s a very personal decision and a big commitment, so the ‘right’ time for you to buy is when you feel ready.
That’s why we encourage you to speak with us, so you can feel confident you are financially ready to become a home owner.
However, if you are holding out in the hope that prices will fall, you could be left disappointed, and potentially end up paying more in the future.
Home values nationally forecast to climb 2.8% this year
Yes, higher interest rates are likely to impact the property market.
ANZ, for example, expects price growth to slow.
But slower growth does not mean a price slump.
ANZ’s forecasts suggest capital city home prices will rise 2.8% in 2026, followed by 2.1% growth in 2027.
But big differences are anticipated across each capital – from dramatic price growth to modest softening, depending on location.
As a guide, prices are expected to rise a whopping 12.3% in Perth this year, 9.7% in Brisbane, and 8.0% in Darwin.
Values are also expected to track higher in Adelaide (up 5.75%), Hobart (3.7%) and Canberra (1.6%).
Sydney and Melbourne may see prices soften by -0.7% and -1.7%, respectively, this year.
But that’s far from a significant drop, and both cities are forecast to see prices rise by at least 2.6% in 2027.
What’s driving values higher?
The reason property prices could defy higher interest rates is simple: demand outweighs supply.
The number of homes listed for sale is super-tight right now.
New listings across most state capitals are lower than a year ago.
And while more new homes are being built, construction levels simply aren’t keeping pace with population growth, NAB says.
Buyers are seizing opportunities
A shortage of homes for sale isn’t deterring buyers.
Cotality estimates close to 560,000 homes have been sold so far in 2026. That’s almost 6% higher than the 5-year average.
Moreover, NAB reports that home loan lending “rose sharply” in the second half of 2025, with home buyers, rather than investors, being the driving force in the mortgage market in the final quarter of the year.
It goes to show that rate hikes and uncertainty in the Middle East are no match for home buyer enthusiasm.
According to realestate.com.au, some first home buyers and upgraders see slower price growth as a window of opportunity, with auction demand still “hot” in parts of the market that are popular with first home buyers.
Call us to know if it’s your time to buy
No one knows for sure how home prices will move in the future.
But it’s fair to say plenty of home buyers look back on the price they originally paid for their home, and breathe a sigh of relief that they purchased when they did.
That’s because over the long term, home prices generally rise, rather than fall.
Talk to us about a home loan that matches your needs if you believe now is your time to buy.
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