Right now, a lot of people are glued to the news.
What’s happening in the Middle East, how long it will last, whether it escalates further – it’s all anyone’s talking about.
And naturally, the question I’m getting is:
“What does this mean for property prices?”
The short answer
Property doesn’t price wars directly.
It prices what happens after the war – things like fuel costs, inflation, interest rates, and consumer confidence.
And that’s where this current situation matters.
The real mechanism (what actually moves property)
The current conflict has already pushed fuel prices higher, which feeds into inflation.
The Reserve Bank of Australia has already flagged this as a risk – higher fuel → higher inflation → potentially higher or longer interest rates.
And that’s the key chain reaction:
War → Fuel → Inflation → Interest rates → Borrowing power → Property demand
So if property does soften, it’s not because of the war itself – it’s because borrowing capacity tightens.
But here’s the interesting part…
If you zoom out, we’ve seen this movie before.
And more importantly – the “fear window” has been getting shorter.
Let’s look at a few recent examples.
- COVID (2020)
- Sydney prices dropped around 2.2% in one quarter
- Brisbane dropped about 0.9%
Everyone thought it was going to be catastrophic.
Instead?
- The total decline was relatively minor (~2%)
- Prices rebounded quickly
- By 2021, we saw one of the strongest growth periods ever
Takeaway: The downturn was real – but short-lived.
- APRA tightening (2017–2019)
When Australian Prudential Regulation Authority tightened lending:
- Prices fell for ~18 months
- Sentiment was negative for a long time
Then suddenly:
- Prices surged again in the second half of 2019 when some regulations eased
Takeaway: The narrative stayed negative longer than the market did.
- Rate hikes (2022–2023)
This one’s fresh in everyone’s mind:
- Sydney dropped ~13.8% from peak
- Brisbane dropped ~10.8%
But then:
- 2023 saw a strong rebound, even whilst rates were still on the up
- By 2025, prices hit new highs again
- Sydney median ~$1.75M, Brisbane ~$1.17M
Takeaway: Even a significant correction didn’t last that long.
Where we are right now
Heading into this uncertainty:
- Sydney is relatively flat but still up ~6% annually
- Brisbane is still growing strongly (~17% annually)
At the same time:
- Listings are still tight in many areas (although some are starting to rise)
- Affordability is already stretched
- And interest rates are already elevated
So this shock isn’t hitting a weak market – it’s hitting a tight, supply-constrained one.
What usually happens next
Based on both history and the current setup, there are three realistic scenarios:
- Short shock (most common)
- Fuel prices settle
- Inflation pressure fades
- Rates stabilise
Property might wobble briefly, but not fall materially
- Longer inflation pressure
- Fuel stays high
- Rates stay higher for longer
This is where you see:
- Reduced borrowing power
- Slower activity
- Slight downward pressure (especially in Sydney)
- Worst-case scenario
- Sustained energy shock
- Economic slowdown
- Rising unemployment
This is the only scenario where you get a meaningful downturn
The key insight (and where I stand)
Here’s my opinion:
The window to act during uncertainty is real – but it’s usually shorter than people expect.
And there are generally three ways people approach it:
- Buy early (when fear is highest)
- Less competition
- Better negotiation
Risk:
- Prices might fall a bit further
- Buy when things stabilise (my preferred approach)
- More clarity
- Lower risk of catching a falling market
Trade-off:
- More competition
- You may need to pay slightly more
- Buy at the peak
- Highest competition
- Maximum prices
Risk:
- Most exposed if conditions change
So what should you actually do?
This is the part most people get wrong:
It’s not about timing the market perfectly.
It’s about:
- Being confident in your job
- Being comfortable with repayments
- Having enough buffer to ride out volatility
Because the reality is, the next shock is always coming. It’s about the only thing we can be certain about
Final thought
If you’ve been sitting on the sidelines for a while and you’re financially secure:
These uncertain periods are often when the best opportunities show up.
Not because prices collapse, but because competition drops before prices do.