What Rising Inflation Means for Buyers in the Current Property Market
Recent data show Australia’s core inflation (“trimmed mean”) unexpectedly jumped to 3.0% in the September quarter. This puts inflation at the top of the RBA’s 2–3% target band and has all but ruled out any further rate cuts this year. In plain terms, interest rates are likely to stay around today’s levels (3.6%) well into 2026. For homebuyers, that means borrowing costs remain high, even as property values keep climbing. In fact, ABS figures show national home value stocks hit a record $11.56 trillion in mid-2025 – up $213.8 billion from the prior quarter – with Queensland and WA leading the growth (each +2.7%. In such a competitive, high-rate environment, buyers must be well-prepared.
How buyers can respond
Get pre-approved and plan ahead: We always advise clients to secure home-loan pre-approval first. Knowing exactly how much you can borrow means you can bid quickly and confidently when the right property appears. As one property blog notes, “pre-approval and planning are vital: getting finance approval early lets you move quickly”. With rates staying high, time (and interest locked-in) is on your side once you’re approved.
Target strong markets: Focus on suburbs or regions showing momentum. Many fast-growing pockets – for example, areas in Queensland and Western Australia – continue to see rising prices. These markets may offer better long-term growth or rental returns, even if borrowing is costly now. By analysing recent sales and re2ntal data, a good buyer’s agent can pinpoint hotspots where your purchase dollars have extra impact.
Seek off-market opportunities: When listings are tight, look beyond the usual portals. Often our networks find off-market or pre-auction deals before they go public. That lets you sidestep bidding wars and potentially save money. As Prowealth notes, “when stock is squeezed, look for off-market or pre-auction deals – our team has multiple sources and networks to get hidden opportunities or offers”. In a market like this, off-market bargains can make a big difference.
Use government homebuyer schemes: First-home buyers can benefit from the new Home Guarantee expansion (effective Oct 2025). This lets eligible buyers purchase with just a 5% deposit in many areas. We work closely with mortgage brokers to help you leverage this scheme and avoid added costs (such as lender’s mortgage insurance). Even for upgraders or investors, tapping first-home incentives (grants or reduced fees) can free up cash to manage higher loan repayments.
Investors – focus on yields and buffers: If you’re buying an investment property, remember higher rates squeeze cash flow. Our advisors can help you model returns and tax benefits to find properties that still make sense in this environment.
If you also want to invest or buy your first home, then connect Prowealth Properties on +61 433 853 248 or book a free consultation. Our expert buyer agents will walk you through your options, including how to use the expanded Home Guarantee Scheme. We will also help set you up to buy with confidence in this changing market.
