Rate uncertainty leaves the door open for upgraders

As we enter November, it's becoming clear that the next four weeks could be an opportune window for upgraders to buy amid significant uncertainty.

The constant what-will-RBA-do news cycle, conflicting macro data, and the significant unexpected bounce in inflation data this week will continue to worry many upgraders and encourage them to keep the status quo.

While this may sound counterintuitive, this uncertainty is what you want when you are looking to buy. It is actually good news if you are in the market, as it increases the chance of making your new home possible with less competition, while others wait for clarity, and buyers become more cautious.

While many upgraders are still struggling to find quality assets, I do fear for our clients who want to upgrade, as new listings have halted until late January, if not mid-February.

If I reflect on past Christmas breaks, it's such a long period of nearly three months, during which buyer and seller confidence and urgency can remain the same or shift much more positively or negatively.

If rate-cut expectations remain conservative over January, the window for upgraders to buy with less market confidence in the first half of 2026 will be available, but with a continued shortage of quality assets, as they have experienced this year, as other homeowners sit on the sidelines.

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But suppose inflation expectations become much more contained, combined with confidence that multiple rate cuts are coming over the year ahead. In that case, many more upgraders will make it a life priority in 2026, and as buyers enter the market faster than sellers, this often leads to much more competition for the small number of quality homes.

In addition to my last update regarding a crackdown on investor lending, we are now seeing moves from banks, and some have changed their trust lending policies. It has been a loophole often abused by investor-focused buyer agent groups and some Mortgage Brokerages who believed it was a way to write more loans.

It is too early to say whether we will see further change. Some banks are still vocal about wanting to write more. Still, I wouldn't be surprised to see a crackdown on bank lending policy innovation that has occurred in the last few years to increase investor lending in a tighter lending market, particularly in trusts and SMSFs.

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