Three in four first-home buyers (75%) are holding off until property prices fall further, and 73% are waiting for interest rates to stabilise, according to Westpac’s latest Home Ownership Report.
The survey of 1,165 Australians, conducted by Lonergan Research between 18 and 28 September, points to a market in a holding pattern. Two in five respondents (41%) said now is a bad time to buy a first home, and almost half (47%) said it is a bad time to sell.
The survey closed a day before the Reserve Bank (RBA) lifted the cash rate to 4.6% on 29 September, its fourth increase this year.
Carolyn McCann (pictured), Westpac’s chief executive, consumer, said the hesitation reflected caution rather than panic.
“We’re not seeing a mood of crisis, rather a mood of concern,” McCann said.
The survey found a tension among first-home buyers. Many are delaying, yet 79% said they felt more motivated to buy than they did a year ago.
Across all respondents, affordability was the most common factor shaping property decisions (40%), ahead of uncertainty about interest rates (32%) and falling property prices (30%). Supply is also a hurdle: 31% said there were too few properties for sale, or that available homes did not suit their needs.
McCann said “many buyers are worried about getting the timing wrong”, as they weigh whether prices or rates could move further before committing.
Westpac’s own lending data suggests the slowdown may be easing. In the week ending 2 October, total mortgage applications were 5% below their pre-budget level, based on a four-week rolling average. That was an improvement on the trough in July, when applications were 20% below that benchmark.
Industry-wide figures paint a weaker picture: Equifax data showed national mortgage demand fell 19.2% year on year in September 2026, with first-home buyer applications down 22.1%.
Underlying demand still appears intact. More than half of respondents (55%) plan a housing change in the next 12 months, and four in five (81%) agreed that owning property remains the best way to build wealth.
Rather than stepping away, some buyers are changing their approach. Nearly one in five (19%) see room to make lower offers, 17% are revising their deposit target, and 16% are now considering suburbs that were previously beyond their budget.
McCann warned that “waiting for the perfect moment can mean missing opportunities”.
She said buyers who were financially prepared and had found a suitable property should focus on their long-term goals rather than trying to predict every market movement.
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