This time is different, or is it?

For Australians and the world right now, it feels pretty uncomfortable. There is an insane amount of uncertainty, and for most, it is becoming beyond overwhelming.

Obviously, what is happening in Iran and the broader region has no clear scenario for how that could unfold. The rapid increase in inflation and the broader economic fallout are now entirely unknown. Instead of the low 3% RBA interest rates we expected in mid 2025, we are talking mid 4% now. A huge shift.

On top of that, AI fear is not going away but growing by the day, particularly across knowledge-based and technology roles. There are real fears today about job security in the coming months, not years, and pressure for employees to get on the front foot.

To be fair, we feel it too. As individuals, as a team, and as a business, we are working through this daily.

When things feel like this, the natural response is to slow things down and wait until there is a bit more clarity. In many cases, that is a reasonable way to think about it. For others, there’s a desire to make decisions and feel a sense of freedom by choosing financial options that offer short-term pain relief.

At the same time, this is not the first period where things have felt uncertain.

Since I started as an adviser back in 2007, something comes along every few years that destroys confidence.  GFC, European Debt crisis, China sneezing, end of the mining boom, Brexit, pandemic, and then inflation war. I would have missed a few as well.

At the time, each of these felt like it could lead to something worse, and many people chose to wait until things settled. The difficulty, however, is that things rarely feel settled in that moment or ongoing. By the time they do, a lot of the opportunity has usually passed, and another event is on the way.

To be clear, I’m not a property bull, and I don't mean people should rush into decisions, disregarding current economic conditions. For some, waiting is absolutely the right call. Financially, things could be tight, or a lot could change for them; being super cautious makes sense. But for others, particularly those in stronger positions, less affected in the short term, and with a clearer longer-term plan, uncertainty itself is not always a risk, but not moving forward is.

In times like these, I feel the most powerful thing everyone can do is to focus on protecting their financial situation, and the best way to do that is to look at their biggest expense and best opportunity to build a buffer.

Taking the time to review their lending structure. Reducing repayment commitments, extending loan terms, optimising rate and releasing any buffer before you need it to handle potential changes, whether in rates, income, or something unexpected.

Because while lending conditions are open today, banks can become more conservative quite quickly, and credit access can tighten faster than most people expect. Acting now is within your control, but what happens often is not.

It is also worth saying that even though things feel uncertain, it does not automatically mean a property crash is around the corner. First home buyers are still likely to be active, not just because of 5% deposits, but because the rental market is so tight that many do not feel they have the option to wait. Confident upgraders will still be there. Some will hold back, but others will continue to look for the right long-term home and make decisions based on finding a quality home for their family. The attack on investors will continue, forcing Australians to go all-in on a tax-free home.

Periods like this also tend to change how the market evolves, because they shift human behaviour and medium-term priorities. Selling will continue to slow, rental markets will tighten, and if things get much worse, there will be a policy response that you wouldn’t even think is possible today.

For those who are feeling particularly anxious, it is important to be careful when making decisions. The instinct to reduce stress, simplify things, or sell can feel very logical in the moment. But decisions made when anxiety is high are not usually the ones that you end up happy with in the long term.  

Talking things through with your trusted advisers, who are not emotionally attached and can make decisions from a clearer headspace, is important, especially when things are changing fast.

The feeling that this time is different is real; I get it, it always does, but in most cases, the outcome for you is determined by how you prepare and respond rather than by trying to predict or worry exactly what will happen next.