January has a funny way of sneaking up on us.
One minute you’re switching off over summer, the next you’re back at your desk with a fresh calendar and a quiet sense that this might be the year you finally make a move. For many Australians, that move is property. And if buying a home or investment property is part of your 2026 plan, the reality is this: the groundwork matters more than the timing.
Because while the property market delivered solid gains last year, the mood heading into 2026 is noticeably more cautious.
A Strong Year, But Momentum Is Cooling
By any measure, 2025 was a big year for housing. National dwelling values climbed 8.6%, adding roughly $71,400 to the median home value across Australia. Three cash rate cuts helped, as did renewed investor activity and the expansion of the federal government’s Home Guarantee Scheme, now better known as the 5% Deposit Scheme.
But markets rarely move in straight lines.
By the end of the year, growth was losing steam in many areas. December saw national dwelling values rise just 0.7% – the smallest monthly increase in five months. Sydney and Melbourne even tipped into negative territory, recording their first monthly declines since early 2025.
It’s not a crash. But it is a shift.
And shifts are where preparation pays off.
Why 2026 Is Shaping Up Differently
As we move into the early months of 2026, uncertainty is the word on everyone’s lips.
Inflation is easing – the Consumer Price Index rose 3.4% over the year to November, down from 3.8% the month before. Trimmed mean inflation has also softened, now sitting at 3.2%. On paper, that’s encouraging.
But the Reserve Bank of Australia remains cautious. Governor Michele Bullock has flagged that if inflation doesn’t stay under control, further rate increases are still on the table. The Big Four banks can’t even agree on what happens next – some expect rates to hold, others are tipping a 25 basis point hike as early as February.
For buyers, this creates a familiar feeling: Should I wait… or should I act?
There’s no one-size-fits-all answer. But what’s clear is that going in unprepared is the riskiest option of all.
Affordability, Lending Rules and Why Timing Isn’t Everything
Another layer to consider is lending policy.
From February, APRA will introduce new limits on high-debt lending, capping the proportion of new loans issued to borrowers with a debt-to-income ratio of six or more at 20%. These limits apply separately to owner-occupiers and investors and are designed to rein in higher-risk borrowing.
If you’re close to that threshold – or might be once rates move – this could materially affect how much you can borrow, regardless of what’s happening in the property market itself.
This is why many buyers are choosing to move earlier than planned, not because they’re rushing into a purchase, but because they want clarity. Borrowing capacity, deposit requirements, pre-approval – these are all things you can lock in before you find the right property.
And that changes the entire experience.
Regional Markets Are Telling Their Own Story
One of the more interesting trends late last year was the resilience of regional markets.
While capital city growth slowed, regional dwelling values rose 9.7% over the calendar year, outpacing the combined capitals’ 8.2% increase. Even in December, regional markets posted a 1% rise, suggesting demand outside major cities hasn’t disappeared – it’s simply becoming more selective.
For buyers and investors willing to look beyond traditional hotspots, opportunities still exist. They just require sharper numbers and clearer strategy than they did a few years ago.
So, What Should Buyers Be Doing Right Now?
If property is part of your 2026 plan, the smartest move isn’t waiting for headlines to settle. It’s getting organised.
That means understanding:
- How much you can realistically borrow in a changing rate environment
- Whether upcoming lending caps could affect your plans
- How your existing mortgage stacks up against the wider market
- What a pre-approval could give you in terms of leverage and confidence
Markets will move when they move. Rates will rise or fall when they do. But buyers who plan early almost always have more options – and more control – when the right property comes along.
And in a year that’s shaping up to reward preparation over prediction, that might be the most valuable position you can be in.
About the Author
As Director of Finance Inc, Simon Waller brings more than three decades of industry expertise to helping clients navigate home loans, refinancing and investment finance with clarity, care and a focus on finding the right financial solution.
To get in contact with Simon click here