A lot of investors are doing the same calculation right now: rates are still elevated, so why not wait a little longer before committing? On paper, it sounds sensible. In practice, the numbers tell a more complicated story.
What the Rate Cycle Has Already Done
The RBA delivered three cash rate cuts across 2025. The cash rate was lowered three times in 2025, which was largely passed on by banks, expanding the borrowing and spending capacity of households. The first cut in February 2025 took the cash rate from 4.35% to 4.10%, and a second cut in May 2025 brought it down to 3.85%.
The response from the market was immediate. Buyers who had been sitting on the sidelines suddenly saw a path forward, and while the cash rate moved lower, affordability didn't follow suit. The relief of cheaper borrowing only reignited demand, pushing prices even higher.
That is the core tension. Lower rates do not make property cheaper if they simultaneously bring more buyers into the same pool competing for the same limited stock.
The Supply Problem Is Not Going Away
The argument for waiting assumes that more supply will come online and take the pressure off prices. The data does not support that assumption.
The National Housing Accord set a target of 20,000 new homes approved per month to reach 1.2 million homes by 2029. Only 287,173 housing units had been approved since July 2024 as of December 2025, approximately 20 per cent below the 360,000 minimum required for the Accord to be on track.
Weak levels of new housing supply relative to demand have continued to place upward pressure on housing prices. The constraints holding back construction are not short-term disruptions. Cyclical constraints include elevated material costs, labour shortages and high financing costs, while structural barriers remain the principal obstacle to supply.
The National Housing Supply and Affordability Council (NHSAC) projects that gross new housing supply will remain subdued through early 2027, averaging around 183,000 dwellings annually, with total output over the five-year Housing Accord period expected to reach 938,000 dwellings, falling short of the 1.2 million target by approximately 262,000 units.
That gap between supply and demand is not closing in the near term. It is a structural feature of the market, not a temporary blip.
What Waiting Actually Costs
The assumption behind a 'wait for lower rates' strategy contains a hidden variable: what happens to prices while you wait?
National home values rose 0.6% in June 2025, a fifth straight month of growth, putting the market on track for 5.8% annual growth, above major bank forecasts, according to Cotality.
By late 2025, combined capital city house prices were up 9%, with unit prices rising 7%. In cities such as Adelaide and Brisbane, unit prices jumped 14 to 16%, the strongest growth rates in the nation.
Consider what this means in practical terms:
- Borrowing costs fall modestly with each 25 basis point cut. On a $700,000 loan, a 0.25% rate reduction reduces monthly repayments by roughly $100 to $120, depending on remaining loan term.
- Entry price, by contrast, rises with every wave of renewed buyer demand. A 7% annual increase on the same $700,000 property adds $49,000 to the purchase price. That is not recoverable through lower monthly repayments in the short or medium term.
- Rental income foregone during the wait period is gone permanently. If a property rents at $550 per week, twelve months of vacancy in your portfolio represents around $28,600 in gross rental income that cannot be recovered.
None of this is a projection or a guarantee of what any specific property will do. It is simply the arithmetic of how rate cuts and price movements interact.
A Worked Scenario
Imagine two investors, both looking at comparable new properties in a growth corridor outside a capital city. Both are PAYG earners, both have comparable deposits.
Investor A decides to wait 12 months for an anticipated further rate cut.
Investor B proceeds now and uses EWC's HomePay product, which means zero monthly repayments for the first 12 months during construction, then standard repayments begin.
At the end of those 12 months:
- Investor A has avoided 12 months of repayments, but is now buying into a market that, based on 2025 trends, may be 5 to 9% more expensive. That price increase is likely to outweigh the modest serviceability improvement from a 0.25% rate reduction.
- Investor B has had the property under contract, potentially completed, and has begun receiving rental income. The rate Investor B locked in may be slightly higher, but the entry price is lower.
This scenario is illustrative only. Individual outcomes depend on the property, location, finance structure, and personal circumstances. No outcome is guaranteed. Independent rental appraisals and current vacancy data for any target area are essential inputs before making a decision.
What to Do Before Deciding
If you are weighing up timing, here are three concrete steps worth taking before the next RBA meeting becomes your deciding factor:
- Speak with a licensed mortgage broker about your current borrowing capacity and how it changes under different rate scenarios. Lenders apply a serviceability buffer of three percentage points above the actual rate, per APRA guidance, so your capacity may already be stronger than you expect at current rates.
- Get an independent rental appraisal on any property you are considering. Rental yields and vacancy rates vary significantly by suburb and property type. A property manager with local knowledge will give you a realistic picture of rental income, not a sales estimate.
- Talk to us about how HomePay and our finance referral network could structure your entry point. Zero monthly repayments for 12 months during construction changes the cash flow equation meaningfully for many investors. Visit our services page for an overview, or book a call to walk through your specific numbers with our team.
If rates do fall further, you will refinance. If prices keep rising while you wait, you cannot go back and buy yesterday's price.
General information only, not personal financial advice. Speak with a licensed adviser before acting.