Should You Buy Now or Wait in Melbourne After the RBA’s Rate Hold?

The Reserve Bank of Australia held the cash rate at 4.35% on 11 August 2026, after raising rates three times earlier this year. The RBA described monetary policy as “somewhat restrictive” and made clear that it could raise the cash rate further if upside inflation risks materialise. It has not signalled that an imminent rate cut should be treated as the base case. RBA August 2026 monetary policy decision

At the same time, Melbourne’s property market has softened materially. Cotality’s final results for the week ending 23 August 2026 put Melbourne’s auction clearance rate at 51.9%, down from 52.9% the previous week and 70.9% a year earlier. Auction volumes were also almost 40% below the equivalent week in 2025. Cotality’s Melbourne auction results

So, should you buy property in Melbourne now or wait?

There is no reliable way to identify the exact bottom in advance. Waiting may give you lower prices, but it also exposes you to the possibility of another rate increase, changing borrowing capacity or renewed competition. Buying now removes that timing risk but only makes sense if the property, price and repayments work under conservative assumptions.

The more defensible approach is to buy on fundamentals rather than trying to predict the exact next move in either Melbourne property prices or RBA interest rates.

What Does the RBA Rate Hold Actually Mean?

A rate hold does not necessarily mean the next move will be a cut.

At its August meeting, the RBA left the cash rate target unchanged at 4.35% after three 25-basis-point increases in February, March and May 2026. The cash rate has therefore risen by 75 basis points this year. RBA cash rate history

The Board said inflation remains too high and that risks to its inflation forecasts are tilted to the upside. It also explicitly stated that it would consider raising the cash rate further if those risks materialise. RBA August monetary policy statement

That distinction matters for anyone asking whether they should wait for lower mortgage rates before buying.

Financial markets and economists can forecast future rates, but the RBA itself is making decisions meeting by meeting based on incoming inflation, employment, spending and economic data.

Its August meeting minutes show that Board members considered both holding the cash rate and increasing it another 25 basis points. Several members thought further tightening could still become necessary, while others placed more weight on downside risks to economic activity. RBA August 2026 meeting minutes

In other words, a buyer planning around a guaranteed near-term rate cut is making an assumption the RBA has not endorsed.

For more context on the relationship between rates and local property conditions, see Forge Real Estate’s analysis of how the 2026 RBA rate hikes are affecting Melbourne property prices.

Is the Melbourne Property Market Actually Falling?

At a citywide level, there is clear evidence of softer conditions.

Domain’s June 2026 House Price Report found Melbourne’s median house price fell 3.1% during the June quarter to $1,041,205. That was the second consecutive quarterly decline and left house prices 4.2% below their December 2025 peak. Domain June 2026 House Price Report

Domain also reported that buyer choice had reached its highest level since 2014, selling times had increased and vendor discounting was rising.

Auction data points in the same direction.

For the week ending 23 August 2026, Cotality recorded:

594 Melbourne auctions

a 51.9% final clearance rate

a 52.9% clearance rate the previous week

a 70.9% clearance rate at the same time in 2025

auction volumes 39.7% below the equivalent week a year earlier. Cotality final auction clearance rates

That is a noticeably more cautious market than Melbourne was experiencing a year ago.

It also gives prepared buyers more room to negotiate, particularly where a vendor needs to sell and competing demand is limited.

Forge Real Estate’s guide to Melbourne’s 2026 buyer’s market explores how softer listings, auction conditions and vendor expectations can translate into negotiating leverage.

Where Are Melbourne Property Prices Holding Up Better?

The slowdown is not uniform.

That is one of the biggest problems with asking whether “Melbourne property prices” are falling.

Different suburbs, dwelling types and price brackets can move in opposite directions.

Domain’s June-quarter research found that affordability was supporting some of Melbourne’s strongest-performing suburbs. In July 2026, Domain reported that many of the suburbs recording the largest annual house-price gains were relatively affordable alternatives in Melbourne’s west and outer areas, including Frankston North, Westmeadows, Kurunjang and Keilor East. Melbourne’s fastest-growing suburbs

That pattern makes sense in a rising-rate environment.

Higher mortgage rates reduce borrowing capacity, so more buyers are pushed toward properties and suburbs that still fit within lender serviceability limits.

Prestige markets can behave differently because the absolute reduction in borrowing capacity is larger at higher loan sizes.

For example, current realestate.com.au data puts Kew’s median house price at approximately $2.55 million, down 3.4% over the preceding 12 months. Four-bedroom houses were down 8.0% over the corresponding period. Kew property market data

That supports describing Kew as a softer higher-value market, but not the broader claim that every prestige suburb is experiencing a double-digit fall.

Northcote is a useful counterexample. Its overall house median was up 3.6% over the preceding 12 months in the latest realestate.com.au figures, so it should not be grouped automatically with declining prestige suburbs. Northcote property market data

The practical lesson is simple: do not make a Melbourne-wide buying decision using Melbourne-wide data alone.

Research the suburb, property type and price bracket you are actually trying to buy.

Is It Better to Wait for Melbourne Property Prices to Fall Further?

Waiting can work.

But it is still a market-timing decision.

Suppose a property worth $900,000 today falls another 5%. On paper, that creates a $45,000 saving.

But if mortgage rates rise again while you wait, your repayments and borrowing capacity may also change.

Equally, if rates remain steady and the particular suburb you want attracts renewed demand, the property may not become cheaper at all.

That is why the question is not simply:

“Will Melbourne prices fall further?”

A more useful question is:

“Would waiting materially improve my financial position after accounting for prices, borrowing capacity, rent, rates and the type of property I want?”

Those variables can move in different directions.

The RBA itself notes that higher interest rates have already tightened financial conditions and weakened demand for new housing loans. It also says most of the effect of this year’s rate increases has already flowed through to scheduled mortgage repayments, although the full economic impact takes time. RBA August 2026 economic outlook

Stress-Test Your Mortgage Before You Buy

A buyer should not base affordability solely on the mortgage repayment available today.

Before making an offer, test how your budget would look if interest rates moved higher.

A simple starting point is to model at least another 0.25 percentage point increase in your mortgage rate.

You can also model a larger buffer if your budget is already tight.

Ask yourself:

What would the new repayment be?

How much surplus cash would remain each month?

Could you still meet repayments if major household expenses increased?

Would you need to abandon savings, renovations or other financial goals?

Would the property still be manageable if its value remained flat for several years?

Lenders perform their own serviceability assessments, but loan approval is not the same thing as personal affordability.

The maximum amount a bank will lend you does not automatically equal the amount you should spend.

First-home buyers can also review Forge Real Estate’s Melbourne first-home buyer guide for 2026 before deciding how much of their approved borrowing limit to use.

Why Your Expected Holding Period Matters More Than Picking the Bottom

If you expect to own a property for only a short period, buying into a falling or stagnant market creates greater risk.

Transaction costs are substantial.

Victorian stamp duty, conveyancing, building inspections, selling costs and potentially capital losses all matter.

If you intend to hold the property for many years, a short-term price decline becomes less important than whether you bought an appropriate asset at a sustainable price.

That is why a five- or ten-year owner-occupier should think differently from someone expecting to move again in two years.

You should also assess whether the property will continue to suit you physically and practically over that period.

If accessibility is likely to become important — for example, through step-free access, bathroom alterations, handrails or doorway modifications — include those potential costs in your property due diligence rather than treating them as an afterthought. Mobility Access Modifications provides information on accessibility and home modification work in Melbourne.

The right property at a fair price can be a better decision than a slightly cheaper property that requires expensive compromises after settlement.

Does a Low Auction Clearance Rate Mean You Should Bid Low?

Not automatically.

A 51.9% Melbourne auction clearance rate tells you the broader auction market is softer than it was a year ago.

It does not tell you what an individual property is worth.

A renovated family home in a tightly held school zone may still attract several motivated buyers.

A compromised property on a busy road may attract none.

Use weaker clearance rates as a reason to investigate negotiating leverage — not as justification for an arbitrary discount.

Check:

comparable settled sales

how long the property has been listed

whether the campaign has already been extended

previous asking-price changes

competing listings

auction attendance

whether comparable properties have passed in

the vendor’s apparent motivation.

Forge Real Estate’s guide to winning Melbourne auctions without overpaying explains how to combine clearance-rate data with property-specific evidence.

What If Rates Rise Again After You Buy?

That possibility should form part of the buying decision now.

The RBA’s August statement says inflation remains too high and that the Board is prepared to increase rates further if upside inflation risks emerge.

That does not mean another increase is guaranteed.

It means buyers should not build a purchase around the assumption that rates can only fall from here.

If another increase would make the property unaffordable, your current budget is probably too aggressive.

If another increase would be uncomfortable but manageable — and you retain cash reserves and a healthy monthly surplus — the decision is more resilient.

That difference matters more than correctly predicting the RBA’s next meeting.

When Does Buying Now Make Sense?

Buying now can make sense when you have found the right property, can hold it for an appropriate period and can comfortably service the mortgage under more conservative interest-rate assumptions.

Current market conditions can also work in your favour.

Melbourne house prices have fallen from their late-2025 peak, auction clearance rates are substantially below last year’s levels and buyers have more choice than they did during stronger market conditions. Domain Melbourne housing data

You may therefore have negotiating opportunities that disappear if borrowing conditions eventually improve and buyer confidence returns.

That does not mean prices are guaranteed to recover quickly.

It means there is a trade-off between price risk and competition risk.

When Can Waiting Make More Sense?

Waiting can be reasonable if:

your deposit is still too small

repayments would leave little monthly surplus

your employment or income is uncertain

you would need rates to fall to make the purchase affordable

you have not yet identified where or what you actually want to buy

you expect to sell again relatively soon

the property you are considering is clearly overpriced against comparable sales.

In those circumstances, improving your own financial position may be more valuable than trying to exploit a soft market.

There will always be another property.

There will not always be another opportunity to undo an excessively large mortgage.

What This Means for You

The RBA’s August 2026 rate hold does not provide buyers with a clear signal to rush into the market, but it does not provide a strong reason to wait for imminent rate cuts either.

The cash rate remains 4.35%, inflation remains above the RBA’s target range, and the Board has explicitly kept further increases on the table. Reserve Bank of Australia

Meanwhile, Melbourne’s housing market has weakened enough to give buyers genuine negotiating opportunities. The city’s final auction clearance rate was 51.9% for the week ending 23 August 2026, compared with 70.9% one year earlier, while Melbourne house prices were 4.2% below their December 2025 peak at the end of the June quarter. Cotality auction data Domain House Price Report

But neither figure tells you whether a specific property is a good buy.

Decide based on your need for the property, expected holding period, comparable sales, cash reserves and genuine borrowing capacity.

Stress-test the mortgage against another rate rise.

Assume prices could remain flat for several years.

Then ask whether you would still be comfortable owning the property.

If the answer is yes, buying during a softer Melbourne market can be entirely rational.

If the deal only works because you expect the RBA to cut rates or Melbourne prices to rebound quickly, the margin for error is too small.

Forge Real Estate’s buyer advocacy approach focuses on that fundamentals-first decision: identifying where Melbourne’s softness is genuine, testing value against comparable sales and negotiating without relying on a prediction about where either rates or property prices go next.

Forge Real Estate Melbourne can help you blueprint your future by finding the perfect blue-chip property where your lifestyle needs and investment goals converge.

📞 Phone: (03) 91003633

✉️ Email: info@forgeproperty.com.au

🌐 Website: www.forgerealestate.com.au

We offer specialized consultation and can assist in both Mandarin and Cantonese.