Melbourne Property Pulse 14 October 2026
Buy Now or Wait? Making Sense of a Cautious Market
Should you buy now, or wait for prices to fall further?
It’s a question many buyers are wrestling with. Lower prices sound appealing, but higher borrowing costs can change the equation. And waiting for certainty can leave you waiting for quite some time.
In a recent episode of The Pay Off, Sylvia Jeffreys spoke with Westpac’s Chief Executive, Consumer, Carolyn McCann about buyer hesitation, borrowing power and the options for homeowners feeling stretched.
The conversation offered some useful perspective. Here are my takeaways and what they mean when you’re considering your next move.
1. Buyers Are Pausing. They Haven’t Given Up.
Carolyn described the market as one of “caution rather than crisis”.
She reported that Westpac’s home loan applications were down approximately 6% from around the May budget period, with first-home buyer applications down about 26%. These are Westpac’s figures, rather than a measure of every buyer in Australia, but they tell us something about confidence.
Interestingly, hesitation hasn’t erased the desire to own a home. Carolyn said approximately 80% of respondents felt more likely to buy in the next six to twelve months than they had six to twelve months earlier.
My take: a buyer sitting on the sidelines today may still be your competition tomorrow.
If you’re taking a pause, use it productively. Get your finance organised, refine your brief and understand what suitable properties are actually selling for. That preparation will help whether you buy next month or next year.
2. Four Rate Rises and Could There Be a Fifth?
If buyers are feeling cautious, interest rates are a big part of the reason.
The RBA’s September increase took the cash rate to 4.60%, marking the fourth rise of 2026.
In the interview, Carolyn said Westpac’s economists were anticipating another increase in November. That would make five rises this year but it remains a forecast, rather than a confirmed decision.
The research discussed in the episode showed 73% of respondents were holding off buying until interest rates stabilised. The difficulty is that nobody can give them a guaranteed date.
For existing borrowers, Carolyn said approximately 85% of Westpac mortgage customers were ahead on repayments, with around half more than six or seven months ahead.
Those figures suggest many have built a buffer. They don’t mean every household is comfortable, or that another rise would be easy to absorb.
My tip: before buying, check what repayments would look like if your loan rate increased again. If you already own, review your rate, your budget and the buffer you have available.
You can’t control the next RBA decision. You can make sure your property plans are based on numbers you understand.
3. Nobody Rings a Bell at the Bottom
One of Carolyn’s strongest points was that nobody announces the exact moment the market reaches its lowest point.
Her emphasis was on doing your homework, understanding what you can afford and finding a property that suits you.
That doesn’t mean rushing into a purchase. It means giving yourself more useful questions than simply, “Will prices fall again?”
Can I comfortably afford this home? Does it meet my needs? Is the price supported by comparable sales? What compromises am I making?
My take: you don’t need to predict the perfect month to make a well-researched decision.
For buyers considering the inner north west of Melbourne, broad headlines are only the starting point. The next step is assessing the particular street, property and price.
4. A Lower Price Doesn’t Automatically Mean a More Affordable Home
Property prices can soften while higher interest rates reduce the amount a bank will lend you. Your deposit might stretch further, but your borrowing capacity may move in the other direction.
Carolyn estimated that, for buyers previously looking at borrowing around $650,000 -$690,000, rising rates could reduce borrowing capacity by approximately $60,000 - $90,000.
She also explained that lenders assess affordability using a buffer above the actual loan rate. Your borrowing capacity therefore depends on more than the advertised interest rate.
My tip: speak with your broker or lender before setting your search budget and revisit that budget when your circumstances or rates change.
Separate what the bank will lend you from what you feel comfortable repaying. Those two numbers don’t have to be the same.
5. Less Competition Doesn’t Mean Every Property Is a Bargain
Fewer active buyers can create opportunities. Carolyn also pointed out that fewer buyers may coincide with fewer properties available.
A quieter market doesn’t guarantee a generous selection of homes that meet your brief. Nor does it make every asking price reasonable.
My take: assess the opportunity in front of you. Look at comparable sales, the property’s condition, its drawbacks and the vendor’s circumstances.
A discount from an ambitious asking price is only useful if the final price represents fair value.
Being prepared helps you recognise that value and negotiate with confidence when a suitable home becomes available.
6. Buy for the Life You’re Building
Carolyn encouraged buyers to think over a five to seven year horizon, rather than expecting to buy and sell within a year.
Will the layout still work as your family changes? Will the commute remain manageable? Could you stay longer if finances became restrictive?
A longer holding period is stronger position for growth, and it helps you think beyond the next headline.
My take: choose a home with enough flexibility for your future. The right purchase should support your life as well as fit your budget and help you to get your next move.
7. Your Mortgage Rate Deserves a Review
One practical message from the interview was refreshingly direct: borrowers can contact their bank and ask for a better rate.
Carolyn said Westpac are seeing customers do exactly that, and that the bank wanted to retain loyal customers in a competitive market.
There’s no guarantee of a reduction, but it’s a conversation worth having.
My tip: ask your lender to review your rate, then speak with your broker about the alternatives. Compare fees, offset features and refinancing costs alongside the interest rate.
And if repayments are becoming difficult, reach out early. Carolyn explained that support arrangements may include reduced or paused payments, depending on individual circumstances. Ask how any arrangement would affect interest, repayments and the loan over time.
Emma’s Buyer Checklist This Month
Update your borrowing capacity. Work with current numbers.
Set a comfortable repayment budget. Leave room for everyday life and unexpected expenses.
Allow for another rate rise or two. Understand what it would mean for your repayments.
Research actual sales. Asking prices alone won’t establish value.
Refine your non-negotiables. Know where you can compromise and where you can’t.
Complete your due diligence. Have the contract reviewed and arrange appropriate inspections.
Be clear about why you’re waiting. A larger deposit or greater job certainty is a concrete goal. Waiting for perfect headlines is harder to measure.
Buying now may suit some households. Waiting may be the right decision for others.
The question is: what needs to be true for you to buy with confidence?
If you’re considering a move in Melbourne’s north-east, I can help you clarify your brief, assess suitable properties and approach the purchase with a clear plan.
Sources & Further Listening
This edition draws on Sylvia Jeffreys’ conversation with Carolyn McCann on The Pay Off. The research and Westpac customer figures above are attributed to Carolyn’s account in that interview; the buyer commentary is my own. Forecasts reflect views expressed at the time and may change.