Rates hit an 18-year high. The circus continues.

Another rate rise. Another squeeze on buyers. Another round of Australians opening their banking app and wondering what the next repayment will look like.

The RBA has lifted the cash rate to 4.85%—its highest level in 18 years. For buyers relying heavily on finance, that puts even more pressure on borrowing capacity, repayments and the decision to purchase.

My take? This government looks like it has no idea how to get the cost-of-living circus under control. The RBA makes interest rate decisions independently, but households are left juggling the consequences while the political finger-pointing continues.

It’s frustrating. For plenty of people, it means putting their property plans on hold.

But there is another side to this market.

For buyers with substantial cash reserves and little need to borrow, the current conditions can create an opportunity worth investigating.

The same market can look very different to two buyers

Imagine two people looking at the same $800,000 property.

The first buyer needs to borrow 85% of the purchase price. That’s a $680,000 loan, before considering purchase costs.

The second buyer needs a $200,000 loan, with enough cash to cover the balance, purchase costs and a healthy reserve.

If both loans are variable and their lenders pass on a 0.25 percentage point increase, the additional annual interest would be approximately:

• $1,700 on the $680,000 loan.
• $500 on the $200,000 loan.

That’s a simple interest comparison, rather than a repayment quote, but it shows why the same rate increase can land very differently.

An outright cash buyer has no mortgage repayment to increase at all.

The property hasn’t changed. The buyers’ ability to comfortably purchase it has.

When other buyers step back, your negotiating position can improve

Higher borrowing costs can push some buyers out of contention. Others may qualify for less finance or decide to pause their search.

For a financially prepared buyer, that can mean fewer competing offers and more time to assess a purchase properly.

Depending on the property and the seller’s circumstances, there may be room to negotiate:

• A lower purchase price.
• A settlement date that suits both parties.
• Repairs or other contract terms.
• Inclusions that improve the overall value of the deal.

An outright cash buyer may also offer greater settlement certainty because the purchase doesn’t depend on obtaining a loan.  That can matter to a seller who wants a straightforward transaction.

It won’t make every seller accept a discount. But certainty and flexibility can strengthen an offer alongside price.

The opportunity is to find a seller whose circumstances align with what you can offer.

Having cash gives you options. It doesn’t make every property a bargain.

There’s a temptation in a softer market to assume anything discounted must be good buying.

A property advertised at $850,000 and reduced to $800,000 might look attractive. But if comparable properties are selling for $760,000, the “discount” deserves a closer look.

You still need to understand what you’re buying.

Check comparable sales, building condition, ongoing expenses and the supply of similar properties nearby. If it’s an investment, assess achievable rent, local vacancies and the cost of holding it through an extended vacancy or unexpected repair.

Cash protects you from mortgage repayment increases on money you haven’t borrowed. It doesn’t protect you from overpaying.

Nor does it prevent the property’s value from falling after you purchase.

A strong financial position gives you the ability to be selective. Use it.

This opportunity is for a specific group of buyers

Let’s be clear: buying now won’t suit everyone.

If a purchase would stretch your budget, drain your reserves or leave you depending on rates falling soon, the pressure in this market is real.

The buyers best placed to explore these conditions are generally those who have:

• Substantial cash or a large deposit.
• Little reliance on borrowing, with any repayments comfortably manageable.
• Reliable income and manageable existing commitments.
• Money remaining after settlement for expenses and surprises.
• A long-term reason for purchasing.

Having enough money to complete the purchase is one test. Being comfortable owning the property afterwards is another.

The goal is to improve your position without buying yourself a new source of financial stress.

Waiting for confidence can mean waiting for competition

It’s understandable to want reassurance before making a major purchase.

But if you wait until the headlines improve and everyone feels comfortable again, you may find more buyers looking at the same properties.

If demand returns faster than available supply grows, sellers can regain negotiating power and prices can come under upward pressure.

That isn’t a prediction of an immediate rebound. Prices could soften further, and different locations can move in different directions.

It is a reason to assess opportunities using your own financial position and local evidence, rather than waiting for a universal “all clear”.

A quieter market can give prepared buyers something valuable: time to investigate and room to negotiate.

You can make smart moves while the circus continues

You can be frustrated with the government, concerned about interest rates and still recognise when a particular purchase makes sense.

Those things can exist together.

For cash buyers and people needing only a small loan, the next step is to assess what their financial position allows them to negotiate—and whether the property deserves their money.

You don’t need to rush. You need to be ready when the right deal appears.

The circus may continue. Your decisions can still be calm, calculated and based on the numbers.

If you have substantial cash reserves and are considering a purchase, let’s look at your goals, the locations you’re considering and whether the opportunities available suit your position.