The Reserve Bank’s decision to raise the cash rate to 4.85% this week has left many buyers reconsidering their plans for the remainder of the year.
Should you press ahead and buy before Christmas, or take a break and return to the market in February?
It is a question I have been discussing with clients over the past few days. While there is nothing inherently wrong with waiting until the new year, I think there are some important reasons why February may not offer the fresh start many buyers are expecting.
In fact, for buyers who are financially prepared and know what they are looking for, the next six weeks could present some worthwhile opportunities.
The usual pattern, and why buyers rely on it
Every year, the property market follows a fairly predictable cycle. Buyer activity starts to fall away through December. Real estate agencies begin winding down in the second or third week of the month, and the industry does not return to normal trading until after Australia Day.
February then brings a fresh wave of listings and, just as importantly, buyers returning to the market with renewed enthusiasm.
Many buyers treat this as something of a safety net. If nothing suitable comes along before Christmas, they can enjoy the break and start again in February with more properties to choose from and a better understanding of where the market is heading.
In a normal year, that is a perfectly reasonable approach. The trade-off is usually more choice but also more competition.
This year, however, I think there are three important considerations that buyers should take into account now, before deciding to wait.
1. February’s buyers may have less to spend, and so may you
The five rate increases this year have added considerably to the cost of borrowing.
For example, on an $800,000 principal and interest loan over 30 years, the cumulative increase from 3.60% to 4.85% adds approximately $584 a month to repayments, assuming the increases are passed on in full. For buyers borrowing $1.2 million, $1.5 million or more, the additional cost is considerably greater.
However, repayments are only part of the story.
When a bank assesses a loan application, it does not simply look at whether you can afford repayments at the prevailing interest rate. It also applies a serviceability buffer to test whether you could continue to meet your repayments if interest rates were higher.
As interest rates increase, the rate used in these assessments generally increases too. This can reduce the amount a bank is prepared to lend, even if your income and other financial circumstances have not changed.
A buyer who was approved for $1.5 million earlier this year may now find that their borrowing capacity has reduced. The extent of any change will depend on their income, expenses, existing debts and the lender’s assessment criteria. It is worth checking rather than assuming that an earlier pre-approval remains sufficient.
This cuts both ways.
In February, some returning buyers will have less money to spend than they did during spring. That could reduce competition in certain price brackets, particularly at the upper end of the market. For buyers with sound finances and sufficient borrowing capacity, this may present an opportunity.
But the same applies to you.
If your pre-approval was issued before Tuesday’s announcement, your borrowing capacity may have changed. Many pre-approvals also expire after a few months, so an approval obtained during winter may be approaching its expiry date anyway.
My advice is to speak with your mortgage broker now and have your position reassessed. The last thing you want is to discover in February that your purchasing budget has reduced just as competition returns.
2. There is another RBA decision before Christmas
The Reserve Bank meets again on 7 and 8 December, with its next interest rate decision due on 8 December.
Tuesday’s decision was widely anticipated, but the split vote (6 vs 3) demonstrates that there is still some disagreement about the appropriate course of action.
Whether the next decision is to hold or increase rates, buyers heading into February will be doing so in a borrowing environment that nobody can confidently predict today.
There is no guarantee that rates will be on hold, and another increase cannot be ruled out.
For buyers who are ready to proceed, I think there is value in understanding exactly where they stand financially and having a clear purchasing budget before entering the market.
Of course, buying before Christmas does not insulate you from a subsequent rate increase. You still need to be comfortable with your repayments if rates rise again. But there is little to be gained from postponing a sound purchase simply in the hope that the borrowing environment will improve by February.
3. Vendors still on the market will be making their own February decision
This is where I believe some of the more interesting buying opportunities could emerge.
A vendor whose property has been on the market throughout spring without selling now faces a decision.
They can accept a realistic offer before Christmas, or withdraw the property, carry it through the holiday period, pay for new photography and advertising, and start again in February.
Starting again is not necessarily an attractive proposition. There are additional costs, another campaign to manage and no guarantee that the result will be any better. The property will also be competing with a fresh wave of listings, while buyers and their agents may remember that it failed to sell during the previous campaign.
This year’s spring market has been particularly challenging for some vendors.
Cotality’s figures show that the combined capital city auction clearance rate averaged just 45.2% during October, the lowest monthly average of 2026. Auction volumes have also remained well below the corresponding period last year.
In other words, spring has not delivered the improvement in buyer demand that many vendors were hoping for.
For those who have not achieved a sale, the prospect of starting again in February may be less appealing than it was a few months ago.
An offer received in late November or early December gives a vendor something tangible to consider against the cost and uncertainty of relaunching in the new year.
Even if an offer is not accepted immediately, it may remain a consideration over the next few weeks.
Some of the most productive negotiations I have been involved in over the past 17 years have occurred towards the end of the year. As the number of active buyers diminishes, vendors who have been testing the market for several months can become more realistic about their expectations. I have seen buyers secure excellent outcomes during this period, sometimes after a property has been unsuccessfully marketed for weeks or even months.
How I would approach the next six weeks
For buyers who are in a position to proceed, I think there is merit in being particularly active over the coming weeks.
This is how I would approach it:
- This week: Have your pre-approval reassessed following Tuesday’s rate increase. Establish a realistic purchasing budget that leaves you with a comfortable financial buffer rather than simply relying on the maximum amount the bank is prepared to lend.
- Mid November: Revisit properties you inspected during spring that have not sold. Speak with the selling agents about the vendors’ plans and whether there is any genuine appetite to negotiate.
- Late November to early December: This is an important window for putting forward serious offers. Agents are still actively working, vendors are conscious of the approaching Christmas shutdown, and there is still time to negotiate and exchange contracts before the break.
- Mid December onwards: Listing activity will be limited, but there may still be opportunities with vendors who are keen to secure a sale before Christmas. If you have previously dismissed a property, it may be worth reconsidering whether the price or terms have become more attractive. Settlement timing can also be important. A vendor who has already purchased elsewhere, for example, may place considerable value on a shorter settlement rather than holding out for another few thousand dollars.
The key is to remain selective. There is little point rushing into a purchase simply because Christmas is approaching. However, if the right property comes along and the numbers make sense, I would not automatically defer a decision until February.
So, who should consider buying before Christmas?
I would be inclined to press ahead if:
- You have found a property that genuinely meets your requirements and the price is supported by recent comparable sales.
- Your finance has been reassessed following the latest rate increase and the repayments remain comfortable.
- You would be comfortable owning the property even if prices remained relatively flat over the next couple of years and even if there were further interest rate rises early in 2027.
And who should wait?
On the other hand, I would be quite comfortable recommending that you wait if:
- Your borrowing capacity has reduced and you need time to reassess your budget.
- You are still uncertain about which suburbs or property types best suit your requirements.
- You have not found a property that represents good value and are simply feeling pressure to buy before the end of the year.
There is absolutely nothing wrong with waiting until February. If that is the right decision for your circumstances, use the Christmas break productively. Refine your brief, narrow down your preferred suburbs, revisit your finances and make sure you are ready to act when the market reopens.
The bottom line
There is no particular prize for buying before Christmas. Equally, there is no guarantee that waiting until February will put you in a better position.
Borrowing capacity has come under further pressure, another RBA decision is approaching, and vendors who have struggled to sell during spring are beginning to consider their options for the new year.
I believe there could be some worthwhile buying opportunities between now and Christmas, particularly for buyers who are well prepared and prepared to negotiate.
Ultimately, it is not about picking the perfect month to buy. It is about understanding the market, knowing what a property is worth, understanding the vendors’ circumstances and being in a position to act when the right opportunity presents itself.
If you are weighing up whether to proceed before Christmas or wait until the new year, I would be happy to talk it through.
Not quite ready to buy?
If you are still researching the market or planning a purchase for next year, you may also find the Sydney Buyers’ Domain community on Skool useful. It provides access to practical buying resources, property market insights and a community of buyers working through many of the same decisions. It is designed to help you become better informed and more confident before committing to a purchase. Explore the Sydney Buyers’ Domain
