Lending is falling and prices are softening, which reads like a warning but often plays out as more room for the buyer who is ready, first home or next.
• New home-loan commitments fell 5.4% by number over the June quarter (Australian Bureau of Statistics), which usually shows up as fewer rival buyers chasing the same homes.
• First home buyers can still use the Queensland First Home Owner Grant of $30,000 (continued) and 5% deposit schemes, subject to eligibility; next-home buyers get more negotiating room and can use existing equity as a lever.
• The Reserve Bank of Australia held the cash rate at 4.35% and does not expect a cut before 2027, so waiting for a rate cut is a gamble on timing, not a plan.
Every headline says new home lending is falling and prices are softening. You are doing the sums on whether to buy now or wait it out, and that goes for your first home or your next one. Waiting feels like the safe move. A quieter market, though, can be exactly when a buyer has the most room to negotiate, and sitting on the fence carries a cost of its own. What follows breaks down what falling lending actually means, where the opening sits for first home buyers and for anyone buying their next place, and how to decide on your situation rather than the headlines.
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Falling lending mostly means fewer people are borrowing right now. That usually points to less competition for the same homes, not that you have missed your chance. The Australian Bureau of Statistics (ABS) put new home-loan commitments down 5.4% by number over the June quarter. For a buyer, first home or next, fewer rival borrowers can work in your favour.
From where we sit day to day, a drop in the lending numbers tends to show up as fewer offers on the same property and shorter queues at inspections. That is the part a scary headline leaves out. A falling number is describing the crowd around you. A thinner crowd is not bad news when you are the one trying to buy.
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Application volumes at the big lenders have come off their highs. Westpac has been running around 27,000 mortgage applications a month, down from about 30,000. Broker aggregator AFG lodged roughly 38,583 in the June quarter, down from about 43,799 the quarter before. Put next to the ABS fall of 5.4%, the same picture keeps repeating.
Fewer applications means fewer buyers competing for the homes on the market. A year of heavy competition trained a lot of people to expect a bidding war on everything. Right now that pressure has eased. That shift is worth more to a buyer than most of the gloom in the headlines suggests.
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A quieter market hands the buyer more control. With fewer people bidding, you face less pressure to overbid and more room to negotiate on price and terms. Softer prices help when you are the one purchasing too, whether it is your first place or your next. That is the upside the headlines tend to skip.
In a busier market, buyers hand back leverage without noticing. When ten offers land on one home, conditions get dropped and prices get chased. In a quieter one, our brokers regularly see buyers negotiate on price, ask for a longer settlement, or keep a finance condition in place. Those are the sort of terms that vanish the moment a crowd forms. National dwelling values slipped 0.4% for the month on CoreLogic figures, the largest monthly fall since December 2022, though Brisbane is still edging up, just more slowly. Softer purchase-side numbers are a genuine tailwind if you are the one buying.
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The opening looks a little different depending on where you are standing. If you are buying your first home, grants and schemes are intact and there is less competition for entry-level stock. If you are buying your next one, softer prices help on the purchase and your existing equity becomes a real lever. Both have a genuine opening right now.
For a first home buyer, a thinner crowd on entry-level homes is the practical win, and it sits alongside support that has not gone anywhere (more on that below). It also helps to know that some borrowers are treated more generously than they expect. Nurses, for example, can generally borrow up to 90% of a property’s value without paying Lenders Mortgage Insurance (LMI), the one-off cost that protects the lender when your deposit is under 20%, and a lender will count 100% of overtime and allowances. Most people in that position do not realise those options exist, and it often means not just an approval but a meaningfully higher borrowing amount.
If you are buying your next home, the equity you have already built is the lever. It can serve as your deposit on the next place, which changes what you can bid and how you structure the loan. A softer market can also ease the sell-and-buy timing that makes upgrading stressful. Some owners even keep the current home as an investment rather than selling. That is a real option worth costing out, though the tax side of it is a question for your accountant, not us.
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Buying still feels hard, and that is fair. Lenders must check you could still cope if rates rose 3% above your actual loan rate. The industry calls that serviceability, and it makes borrowing power tighter than the sticker price suggests. No rate cut is expected before 2027, and for next-home buyers the sell-first or buy-first question adds pressure.
That 3% buffer is set by the regulator, the Australian Prudential Regulation Authority (APRA), and it is not going anywhere soon. So it pays to know your real number before you fall for a home. If you are already stretched, that matters more than any market call. When repayments are a genuine struggle, talk to your lender about hardship support or reach out to the free National Debt Helpline. A responsible plan sometimes says wait, and that is a legitimate answer.
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Waiting for a rate cut is a gamble on timing. The Reserve Bank of Australia (RBA) held the cash rate at 4.35% in August and does not expect a cut before 2027. If a lower rate does arrive, more buyers return and competition lifts with it. Waiting for the perfect moment has its own cost, and no one reliably picks the bottom.
A rate cut lowers your repayment, but it also brings the crowd back, and more buyers push prices and pressure the other way. The quiet you are enjoying now is partly because rates are where they are. Waiting for the perfect moment can hand back the very advantage you were waiting to use. That is the trade-off most people miss.
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You cannot time the market perfectly, so stop trying. The better move is to buy when you are genuinely ready and your application is in its best possible shape. Work on what you actually control: your deposit, your credit conduct, your pre-approval, and how the next purchase is structured. Sometimes the honest answer is not yet, and then the job is a clear plan to get you there.
That plan is not always a green light today. We had a customer looking to refinance and consolidate some debts who had a couple of recent overdue credit card payments. The only products on offer barely improved their position. Rather than let them settle for that, we put a plan in place to pay the next two months on time.
Those three clean months of repayments qualified them for a lower-rate product with fewer fees. The first answer a customer gets is not always the best deal available to them, and a short, deliberate plan can move you into a completely different tier. For a first home buyer, the levers are the deposit path, a guarantor, and pre-approval. For a next-home buyer, they are your equity, pre-approval, and the sell-first or buy-first call.
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The support on offer depends on which buyer you are. First home buyers who qualify may be able to use grants and low-deposit schemes, subject to eligibility. If you already own, the levers are different: your equity, a sharp pre-approval, and how you structure the next loan. Either way, a broker can map what actually applies to you.
For first home buyers who qualify, the current support includes the Queensland First Home Owner Grant of $30,000 (continued) on new homes under $750,000, the federal First Home Guarantee for a 5% deposit with no LMI, plus the shared-equity schemes QLD Boost to Buy and federal Help to Buy for as little as a 2% deposit. Each carries its own caps and rules, all subject to eligibility, and we have set out the full breakdown in our guide to first home buyer grants and schemes.
If you are buying your next home, the work is different. It is about sizing up your usable equity, getting a real pre-approval, and structuring the next loan around your plans. You can start either path from our first home buyer home loans page.
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Our Head of Home Loans, Bill Robb, who has 26 years in the industry, shared a recent example that fits this moment. A self-employed customer wanted to sell their owner-occupied home and upsize. The trouble was that prices were rising faster than they could pull a full-financials application together, and every week of delay was a week of the market getting away from them.
Rather than wait for the paperwork, Bill used their two most recent Business Activity Statements (BAS) to prove the income and service the loan. That got them into the new home sooner and let them start building equity earlier. Once their financials were complete, we refinanced them to a lower-rate lender with no penalty for the switch. As Bill puts it, the win came from being ready to act, not from calling the market, and the same lesson travels to both buyer types.
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Whether it is your first home or your next one, the honest way to answer this is to look at your actual numbers, not the headlines. We handle the heavy lifting: we assess where you stand, work out your real borrowing power, and map a plan whether the answer is now or a few months of getting ready. We are on the Sunshine Coast and we work with buyers Australia-wide.
Call us on 07 3505 3099, or start the 5-minute online form here. It is free, and there is no pressure. You can also get pre-approved so you know your budget before you fall for a home.
 Bill Robb |
Bill has over 26 years of experience working in the finance industry. He has worked across a number of different businesses including Home Loans, Personal Loans, Collections and Insurances. Bill's passion is to utilise his knowledge and experience in the industry to assist clients in meeting their financial goals.
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Reviewed by: Nathan Drew ✅ Fact checked 📅 Last updated: Aug 27, 2026 |
A variable rate home loan is one in which the interest rate you pay is not set in place, and can fluctuate over the life of the loan, depending on the market conditions and the decisions of the lender.
Equity is the difference between your property’s current value and what you still owe on your mortgage.
To use it as a deposit for another property, lenders typically require that you have enough equity to cover at least the deposit and associated costs. At Fox Home Loans, we can help assess your property’s equity and guide you on how to leverage it safely for your next investment.
Your home loan pre-approval amount depends on your financial situation, including your income, expenses, existing debts, and credit history. Lenders use this information to estimate how much you can borrow, giving you a clear idea of your budget before you start house hunting.
At Fox Home Loans, we can guide you through the process to get the most accurate pre-approval for your circumstances.
How Loan pre-approvals typically last from 60-90 days but can vary depending on your lender. When working with Fox Home Loans you will have your own dedicated mortgage broker will explain your options if your pre-approval is about to expire.
Yes, making too many formal credit enquiries can affect your credit score. That’s why at Fox Home Loans we start with a soft credit check which doesn’t leave a mark on your credit file. This allows us to review your situation and compare options across our panel of 50-plus lenders, helping you find the best deal without impacting your credit rating.
