Australia’s major banks are back to forecasting higher interest rates, adding another consideration for homeowners planning a move this spring.

Westpac became the last of the big four to change its call this week. It now expects a November rate increase alongside CBA and ANZ, while NAB forecasts a September rise. 

Those are forecasts, and they can change again. But for sellers, the impact of today’s market depends on more than the Reserve Bank’s next decision.

Someone moving into a more expensive home faces a different calculation from someone downsizing or selling an investment property. A lower sale price can be partly offset by a cheaper purchase, and in some cases the overall cost of moving can come down.

Here’s how that plays out for different sellers.

Upsizers may have less of a gap to bridge

A softer market can make moving to a larger or more expensive home more affordable, even when the property being sold has lost some value.

The reason is the difference between the two prices. If the next home falls by more in dollar terms than the current one, the extra amount needed to make the move shrinks.

Consider a simplified example: a homeowner selling for $1 million and buying for $1.5 million faces a $500,000 price gap.

If both properties become 5 per cent cheaper, those prices fall to $950,000 and $1,425,000. The gap is now $475,000, or $25,000 less before buying and selling costs.

The more expensive property doesn’t have to fall faster in percentage terms for that to happen. The same percentage change produces a bigger dollar saving on the higher price.

Current conditions may offer some upsizers further scope. Cotality’s August report found that higher-priced homes were generally recording larger declines across most capitals, although the difference between expensive and more affordable properties was narrowing. 

A smaller price gap can reduce the additional borrowing needed, but the repayments still have to work. A current borrowing assessment and an allowance for stamp duty, selling fees and moving costs are essential parts of the budget.

Downsizers need to focus on what’s left after the move

For someone selling a more expensive property and buying a cheaper one, that calculation works in reverse.

Using the same example, moving from the $1.5 million home to the $1 million home would initially release $500,000 before costs and any mortgage repayment. After both prices fall by 5 per cent, that amount drops to $475,000.

That can matter when the move is intended to fund retirement, reduce debt or help family members.

But downsizing is also about finding a home that suits the next stage of life. Less maintenance, fewer stairs or being closer to family can remain good reasons to move through changing market conditions.

A useful starting point is a realistic estimate of the money left after buying the next home, repaying any mortgage and covering the transaction costs. A smaller property isn’t necessarily much cheaper, particularly if the move involves a newer home or a more expensive location.

For retirees, the effect on pension entitlements may also need checking before committing. 

Relocators are dealing with two local markets

Moving between cities or regions adds another variable: the place being left behind may be performing very differently from the destination.

Selling where prices have eased and buying somewhere they have held steady can stretch the moving budget. Moving in the opposite direction can make the purchase more affordable.

That doesn’t mean every move from a capital city to a regional area has become more expensive. The result depends on the two locations, the properties involved and how their prices have changed.

Even within the same city, a house in one suburb and an apartment in another can attract quite different levels of demand.

Recent comparable sales at both ends of the move offer a more useful guide than a national average. For a broadly similar purchase in the same local market, price movements may partly offset each other, although transaction costs still need to be covered.

Selling without buying again puts more weight on the sale price

For someone selling an investment property or otherwise leaving the market, there is no immediate home purchase to offset a lower sale price.

The amount left after repaying debt and meeting selling costs therefore becomes especially important.

Investor borrowing has eased, although that is different from investors selling their existing properties. Canstar’s analysis of ABS figures showed the value of new investor loans fell 10 per cent in the June quarter, while remaining 8 per cent higher than a year earlier.

“Investors led the retreat,” Canstar’s data insights director Sally Tindall said of the quarterly lending figures.

For an owner considering a sale, the relevant questions also include rental income, holding costs and what the proceeds would be used for.

The budget’s property tax reforms add another consideration for investors. An accountant can explain which arrangements apply to the property and what a sale would leave after tax.

For someone selling to rent, the next rental home and its ongoing cost belong in the same calculation.

When life sets the timetable, preparation matters

A separation, a deceased estate or changing care needs can bring a sale forward regardless of market conditions. Those sellers may have limited flexibility over when they move.

Homes are still changing hands, but buyers have more choice. Across the capitals, advertised listings were 8 per cent above the five-year average over the four weeks to 30 August, despite fewer new listings arriving.

For sellers working to a deadline, that makes a realistic campaign plan particularly useful: which buyers the home is likely to attract, how it compares with competing properties and when to review the price if interest is limited.

An agent’s recent results with similar homes can help ground those decisions. Good preparation cannot remove market pressures, but it can help avoid an ambitious asking price or poorly matched campaign adding unnecessary delays.

Start with the numbers for the move you want to make

The sale price matters to every seller. For those buying again, the purchase price and the cost of getting from one home to the next matter just as much.

A current estimate of your home’s value is a useful starting point. From there, comparing top local agents to find the right agent for you can help establish a realistic sale range and a campaign suited to your property, your buyers and your timetable.