Upgraders are back with a bottom-up boom on the way

Over the last couple of weeks, we've noticed something we haven't seen for a few years: long-term clients making the call to upgrade into their forever homes.

Some have bravely sold first to power their ability to buy fast on short settlements with clarity on maximum purchase, while others are using bridging finance or on longer settlements to buy first with a plan to sell their current home quickly.

The primary reason is confidence in capitalising on a strong potential market upswing, and importantly, buying now to avoid being priced out if they don't act. Every rate cut adds a bit of breathing space to cashflow expectations, and with the combined higher borrowing capacity, clients are starting to take action, albeit only at the beginning.

To be clear, this isn't 2019–2021 all over again, not even close. But it's the first genuine jump in upgrader activity since then. The handbrake right now is the calendar, and because it's October, it means there really is only four to six weeks of fresh listings before the Christmas lights go up and the market shuts down.

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Cooling Rate Expectations

The hype surrounding additional rate cuts has cooled, and the market is now only pricing in one or two cuts in 2026. If this trend continues through January, upgrader demand will be a trickle rather than a flood, and that will keep the supply of quality houses tight well into the first half of 2026.

5% Deposit Home Loans First-Home Buyers

At the same time, the changes to the 5% deposit scheme have begun, and every first-home buyer is aware of them. The media have ensured that.

While those in the market now have a first-mover advantage, 2026 is expected to be the year when many young buyers make buying their first property their top life priority. The issue, however, will be that they will often all be looking in the same suburbs. And those suburbs are already being front-run by investors in 2025, so what we will undoubtedly see is first-home buyers bidding against both investors and each other as the 2026 story.

The knock-on effect

When prices in those areas rise, current owners will take action.

Some will take on more debt to upgrade to a bigger apartment or house, while others will often downsize to a similar price point. Investors could then re-enter the market with another asset.

It will be the classic ripple effect, where the market recirculates capital gains into the hands of current owners, as first-time homebuyers take on more debt. At the same time, they reap the benefits and re-enter the market. This will create some mini-boom in the suburbs and will work its way from the bottom up.

Why October matters

If you're considering moving before Christmas, the clock is ticking. By November, the flow of good properties will dry up. By mid-November, new listings cease, and everything remaining is cleared before the summer break.

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