If you’re trying to decide whether to buy a home in Australia right now, you’re not alone. The property conversation in 2026 has shifted from excitement to anxiety. Interest rates sit at 3.85% after the RBA’s February hike, and national sales volumes have dropped 8% over the past twelve months, according to CoreLogic’s December 2025 report. Yet prices are still climbing in most capital cities, driven by a housing shortage of 200,000 to 300,000 dwellings. That tension — falling sales but rising prices — is exactly what makes this moment so confusing for buyers.
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This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The market is not crashing. Leading forecasters from AMP, Domain, and KPMG all expect national price growth of 4% to 7.7% in 2026. But that growth is uneven. Perth and Brisbane are surging, while Sydney and Melbourne have cooled. The question isn’t whether property is worth it — it’s whether buying now makes sense for your specific situation. Here’s what you actually need to know.
One term you’ll hear constantly in 2026 is serviceability buffer. That’s the extra 3% interest rate banks add to your loan application to test whether you could still afford repayments if rates rose. APRA introduced this rule, and it’s reduced borrowing capacity by $50,000 to $100,000 for millions of buyers. It’s the single biggest reason some people who could afford a home in 2021 can’t today.
What I tend to notice is that buyers who understand this buffer before they start house hunting are far less likely to get disappointed. It’s worth checking your borrowing power with a broker before you fall in love with a property you can’t actually finance.
What the full cost of buying looks like in 2026
Most buyers focus on the purchase price. That’s a mistake. The real cost includes stamp duty, legal fees, building and pest inspections, lender’s mortgage insurance (LMI), and moving costs. These add up to $15,000 to $30,000 on top of your deposit, depending on the state and property value.
Stamp duty alone can be brutal. In New South Wales, stamp duty on a $1.41 million Sydney house runs over $60,000. In Victoria, it’s around $55,000 on a $1.02 million Melbourne property. First-home buyers get concessions in most states for properties under $800,000, but above that threshold the full rate applies.
Then there’s LMI. If your deposit is under 20%, you’ll pay lenders mortgage insurance, which protects the bank — not you — in case you default. On a $800,000 loan with a 10% deposit, LMI can cost $10,000 to $30,000. Waiting a few months to save that extra 10% can save you a five-figure sum.
Interest rates add another layer. Variable mortgage rates currently sit between 6.2% and 6.7%. On a $600,000 loan, that’s roughly $3,800 to $4,000 per month in repayments. Two years ago, the same loan cost about $3,000 per month. That extra $800–$1,000 per month is why some buyers are stretching their budgets or delaying purchases.
Regional variation matters here too. A buyer in Perth with a $728,000 median house faces lower stamp duty and a smaller loan than a Sydney buyer, but Perth’s 6.1% annual growth means waiting could be even more expensive relative to income. If you’re looking at lot size and land value, those factors shift the cost equation significantly between cities.
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| City | Median House Price | Annual Growth | Estimated Stamp Duty | Typical LMI (10% deposit) |
|---|---|---|---|---|
| Sydney | $1,410,000 | +3.2% | ~$60,000 | $15,000–$25,000 |
| Melbourne | $1,020,000 | +2.5% | ~$55,000 | $10,000–$20,000 |
| Brisbane | $852,000 | +5.6% | ~$30,000 | $8,000–$15,000 |
| Perth | $728,000 | +6.1% | ~$25,000 | $7,000–$12,000 |
Where buyers get it wrong — and what it costs them
Waiting for the market to crash
The most expensive mistake I see is buyers holding out for a price collapse. Australia’s property market doesn’t have the conditions for a crash: unemployment is 4.1%, mortgage arrears are below 1%, and lending standards are strict. The housing shortage of 200,000 to 300,000 dwellings means demand structurally exceeds supply. A buyer who waited in Thornbury, Melbourne in 2023 saw prices rise 8% by mid-2024, costing them an extra $64,000 deposit. The crash narrative sells headlines, not houses.
Ignoring the serviceability buffer
Banks test your loan at the current rate plus 3%. If the variable rate is 6.5%, you’re assessed at 9.5%. That means a household earning $120,000 can borrow roughly $150,000 less than in 2021. Buyers who don’t check their borrowing capacity before shopping often waste weeks looking at properties they can’t finance. A broker can run this calculation in 15 minutes. Skipping that step is an expensive gamble.
Chasing past performance into overheated suburbs
Suburbs that boomed in 2021–2022 aren’t guaranteed to repeat. Byron Bay and Ballarat saw prices drop 2–4% as city buyers returned to urban centres. Buying into a suburb because it “went up 20% last year” is a recipe for buying at the peak. Instead, check recent sales data, auction clearance rates, and days on market. A suburb with rising days on market and falling clearance rates is cooling, not accelerating.
Underestimating total purchase costs
Many first-home buyers save a 10% deposit and think they’re ready. They forget stamp duty, legal fees, building inspections, and moving costs. On a $850,000 Brisbane house, those extras can total $35,000 to $45,000. If you’ve only saved $85,000 for the deposit, you’re $35,000 short. That’s why some buyers end up borrowing more or delaying their purchase. A property law specialist can help you understand the full cost breakdown before you commit.
How to decide whether buying now actually works for you
The decision comes down to five questions. Answer them honestly, and you’ll know whether to buy now or wait.
Can you afford repayments at current rates plus a buffer?
Run the numbers at 6.5% and at 9.5%. If the higher rate would leave you struggling, you’re not ready. Mortgage stress is rising — the ABS reports a 12% increase in households spending more than 30% of income on repayments. Don’t be one of them.
Are you buying a home to live in or an investment?
Owner-occupiers with a 10+ year horizon can ride out market cycles. Short-term investors face a much riskier environment. If you’re buying a home, the question isn’t “will prices go up next year?” It’s “can I afford this home for the next decade?”
What’s happening in your target suburb?
National data won’t help you here. Check local sales data, auction clearance rates, and days on market. Brisbane’s 5.6% growth is driven by interstate migration and infrastructure projects. Sydney’s eastern suburbs are rising while outer western areas are flat. Your suburb’s story is what matters.
Do you have a genuine 10–20% deposit plus $15k–$30k for costs?
If you’re 3–6 months from your deposit target, waiting to save the extra 10% can save you $10,000–$30,000 in LMI. That’s one of the few scenarios where waiting makes clear financial sense.
Is your employment stable for the next 24 months?
Banks assess serviceability based on job security. If your contract ends soon or your industry is downsizing, buying now is risky. A legal consultation can help you understand your rights if your situation changes after purchase.
What the supply crisis means for prices
Australia’s housing shortage isn’t a short-term problem. Housing approvals fell 6.4% in October 2025. Construction costs have surged 62% to 77% in key precincts over four years. The federal Housing Accord is more than 20% behind schedule. Even if construction hits targets, supply won’t catch demand for years. This structural deficit supports prices even when rates are high. It’s why forecasters expect 4–7.7% national growth despite affordability stress.
How interest rates could shift the picture
Economists at Westpac and NAB expect the RBA to hold rates steady until at least mid-2026. Some analysts suggest a possible rate cut later in the year if unemployment rises. If rates drop 1% or more, your borrowing power increases meaningfully, and prices in rate-sensitive outer suburbs could soften briefly. But that window is narrow and unpredictable — more buyers enter with improved borrowing capacity, and prices rebound quickly. Timing a rate cut is a gamble, not a strategy.
Frequently asked questions about buying in 2026
Is it better to buy a house or a unit in 2026? ▾
What happens if I buy and rates go up again? ▾
Should I use a buyer’s agent? ▾
Can I still get a loan with a 5% deposit? ▾
Are regional areas still a good buy? ▾
What’s the biggest risk for buyers right now? ▾
Waiting is a decision with its own cost
Every month you wait to buy, you pay rent that builds zero equity. In a market where prices are rising 4–7% nationally, that rent compounds alongside price growth. The buyer who waited in Thornbury in 2023 lost $64,000 in additional deposit requirements. That’s not a prediction — it’s what happened. The question isn’t whether property is worth it in 2026. It’s whether your personal finances, job stability, and time horizon align with buying now. If they do, waiting is almost certainly costing you money.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read First Home Fails: What Every Aussie Buyer Should Avoid.
Sources and Further Reading
Decoding Australian housing market cycles — A deeper look at how timing and market phases affect your buying decision.
The future of home ownership in Australia — Long-term trends and predictions for Australian property buyers.
Collings Property (2026). Should I Buy Now or Wait? The Honest Answer for 2026. 🔗
Buyers Agency Australia (2026). Will Property Prices Crash? The Real Story Behind Australia’s 2026 Property Market. 🔗
Buyers Agency Australia (2026). Is Property Still Worth It in 2026? The Truth Behind Australia’s Market Uncertainty. 🔗
Finance Directory (2026). Australian Real Estate Market 2026: Prices, Trends, and What Buyers Need to Know Now. 🔗
