Homebuyer sentiment jumps 12 per cent after the August rate hold

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Kooky

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More Australians think this is a reasonable moment to buy a home than at any point since late last year. The Westpac-Melbourne Institute survey published on Tuesday 18 August shows its "time to buy a dwelling" index rising 12.1 per cent in a month to 95.7, the highest reading since November 2025. In the same survey, the index that tracks where people think house prices are heading fell to 110.8, a fresh three-year low.

The two movements belong together. Buyers have been told for months that prices are softening and that choice is widening, and in August the Reserve Bank left the cash rate where it was. For a Queensland household weighing up a purchase this spring, the survey is a useful picture of the mood of the people they will be bidding and negotiating against, even though it does not publish a separate Queensland figure this month.

Westpac-Melbourne Institute Consumer Sentiment survey, 1,200 adults, conducted 10 to 14 August 2026.

What the August survey measured

The survey is run every month by the Melbourne Institute for Westpac. The August edition questioned 1,200 adults between 10 and 14 August, according to the release written by Westpac chief economist Luci Ellis. Its headline number, the Consumer Sentiment Index, rose 6 per cent to 88.9 from 83.9 in July.

Housing is one part of that survey. Respondents are asked whether now is a good or a bad time to buy a dwelling, and the answers are turned into an index. A reading of 100 means the people saying "good time" and the people saying "bad time" are evenly matched. Below 100, the pessimists are ahead. At 95.7, the August figure still sits under that line, so the fairer description is that buyers are less gloomy, not that they are confident.

The size of the monthly move is what stands out. A 12.1 per cent rise is large for this series, and Westpac describes it as broad-based across states and cities. Sydney and Melbourne, where prices have been falling for longer, both edged back above 100.

Trade publication MPA, reporting the release on 19 August, noted that the headline sentiment index remains 9.7 per cent below its level of August 2025 and under its long-run average of 100.2. Ms Ellis's own summary, quoted by MPA, was restrained: "This is still a weak result and noticeably lower than the readings recorded last year."

Why a rate hold moves buyers

The Reserve Bank's August meeting fell inside the survey week, and the Board kept the cash rate at 4.35 per cent. MPA's report ties the rebound in sentiment directly to that decision.

A hold changes nothing in a borrower's repayments. What it changes is the fear of the next step. A buyer who is approved for a loan today has to live with the repayments for years, and each expected rise shrinks the amount a lender will offer. When a meeting passes without a rise, the buyer's calculation becomes a little less of a moving target.

The relief is partial. Westpac reports that 59 per cent of all respondents still expect mortgage interest rates to go up further over the coming year, and that among those surveyed after the Reserve Bank's meeting 28 per cent expected rates to fall or stay the same. The survey's mortgage rate expectations index eased 2.3 per cent to 158.8, which is lower than in July but far above the neutral mark of 100.

Job security pulls the other way. The unemployment expectations index rose 4.4 per cent to 135.7 in August, and in this series a higher number means more people expect unemployment to rise. A household that is unsure of its income a year from now tends to be cautious about a thirty-year commitment, whatever the price of the home.

Prices expected to fall, and who expects it

The Westpac-Melbourne Institute Index of House Price Expectations fell 6.1 per cent in August to 110.8. Westpac calls it a fresh three-year low and says the decline was broad-based across the states.

A reading above 100 still means that more people expect prices to rise than to fall over the next twelve months. But the gap has narrowed a long way, and the survey shows that the answer depends heavily on who is asked.

People who own their home outright are roughly twice as likely as renters to expect a fall. That matters for buyers in two ways. Outright owners are often the vendors of established family homes, and a vendor who expects prices to drift lower has a reason to meet the market sooner. Renters, the group most likely to be buying a first home, are the least convinced that prices will come down.

Where Queensland sits in a national reading

Westpac's August release gives city detail only for Sydney and Melbourne, so there is no Queensland number to quote this month. What can be said is that the rise in the time-to-buy index and the fall in price expectations were both described as broad-based across the states.

Other dated sources fill in the local picture. Cotality's index, published at the start of August, showed Brisbane dwelling values slipping 0.6 per cent in July. PropTrack's June market snapshot, reported by Australian Broker on 23 July, counted 22 per cent more new listings in Brisbane than in June 2025 and 11 per cent more homes for sale in total. More homes and softer prices are the conditions under which buyers usually feel they have time to think.

Property professionals in the state have marked their own mood down. NAB's second-quarter residential property survey, conducted between 26 May and 23 June, put its Queensland sentiment index at +24, down from +68 in the first quarter, and found respondents expecting Queensland house prices to fall 1.5 per cent over the following twelve months, where three months earlier they had expected a rise of 3.8 per cent.

Demand from outside the state has not gone away. Real Estate Business reported on 21 July that Queensland gained 16,528 people from interstate migration in 2025, citing REIQ chief executive Antonia Mercorella, and that the Sunshine Coast alone drew 8.8 per cent of the country's net internal migration in the twelve months to March 2026, according to the Regional Australia Institute's Regional Movers Index. A Queensland buyer therefore faces a market with more stock and softer prices, but also one that people from New South Wales and Victoria are still moving into.

Renters and regional buyers are less convinced

Two groups did not share fully in August's improvement, and both are well represented in Queensland.

The first is renters. Westpac says the time-to-buy index fell slightly in the month for renters, although it has recovered from the low point reached earlier in the current run of rate rises. The release links this to price expectations: because renters are less likely to expect prices to fall, they are more downbeat about whether now is a good time to buy, and about their chances of owning a home at all.

The second is people outside the capitals. The index is lower for consumers in non-metropolitan areas, Westpac notes, as it has been for most of the period since the pandemic. Queensland is the most decentralised of the mainland states, with large housing markets on the Gold Coast and Sunshine Coast and in Townsville, Cairns, Toowoomba and Mackay, so a weaker regional reading carries more weight here than it would in a state dominated by one city.

Reading a sentiment index without over-reading it

A survey of 1,200 people across the country is a blunt instrument for a decision about one home in one suburb. Three limits are worth keeping in mind.

It records what people say, in one week. The August survey happened to coincide with a Reserve Bank decision that went the way borrowers hoped. The same question asked in a week of bad news can produce a very different answer, and monthly swings in this index are often partly reversed.

It does not measure ability to buy. A person can believe it is a good time to buy and still be unable to borrow enough. Lenders assess a loan at a rate above the one actually charged, and that test has tightened with every rate rise this year. Sentiment and borrowing capacity are separate hurdles.

It is national. The state and city breakdowns rest on smaller samples, which is one reason Westpac reports them selectively. A Brisbane or Cairns buyer learns more about local competition from local evidence: how many homes are listed, how long they take to sell and how far final prices sit from asking prices.

What the survey does offer is a read on the people on the other side of the transaction. When price expectations are at a three-year low and close to half of outright owners expect further falls, vendors are less likely to hold out for last year's price. When the time-to-buy index jumps in a single month, a buyer should not assume they will be alone at the next open home.

What buyers can take from August

The plain message of the August survey is that the mood among buyers improved from a low base once the Reserve Bank held its rate, while expectations for prices kept falling.

For Queensland buyers, the months ahead are the traditional spring selling season, when listing numbers normally rise. The survey is published monthly, and each new edition will show whether August's improvement was the start of a recovery in buyer confidence or a one-month reaction to a single decision. With 59 per cent of respondents still expecting higher mortgage rates and the unemployment expectations index rising, Westpac's own caution about a "still weak" result is a fair guide to how much weight one month should carry.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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