Why 2025 is shaping up as the year to upgrade

By Christian Stevens

Interest rates are finally heading lower, and it's not just first home buyers feeling the shift. One of the most active client segments we're now seeing is upgraders - homeowners looking to trade up, relocate, or secure their forever home. With property prices stabilising and borrowing capacity rising again, 2025 could well be the year of the upgrader.

Why the timing is right

In a rising rate environment, upgraders often stay put. Higher repayments, tighter serviceability, and volatile prices keep many on the sidelines. But with two RBA cuts already delivered this year - and more expected - that dynamic is changing fast.

Rate cuts mean lower repayments and, crucially, higher borrowing power. For many dual-income households with decent equity, the maths is starting to stack up. And because many upgraders are selling and buying in the same market, they're less exposed to price fluctuations than first-time buyers or investors.

Borrowing Power Is Rebounding

A 10 per cent boost in borrowing capacity is now on the cards if Westpac's forecast of four cuts plays out. That means someone who qualified for a $1 million loan in January might soon be eligible for $1.1 million.

And here's the kicker: households have never held more equity. The pre-to-post COVID property value surge delivered a significant uplift in home values, and while prices have since cooled in parts of the country, the net gain in equity for many owners remains substantial. That equity can now be unlocked, especially with improving borrowing conditions, to fund the next move.

For upgraders, this added capacity and equity combined can be the difference between staying put or making the leap to a home that suits their long-term goals.

Listings are still low - but that could change

Supply remains tight in many capital cities, which can make finding the right property a challenge. But we're expecting listing activity to pick up in the second half of the year as confidence improves.

Acting early - before the broader market catches on - can be a strategic move. With fewer buyers and less competition, upgraders may find they can negotiate stronger terms or secure properties that would be hotly contested later.

Tips for a smooth upgrade

Upgrading is more complex than buying your first property. You need to manage the logistics of selling and buying, and often secure bridging finance or time settlement dates perfectly. Here's what we're advising clients in 2025:

• Get an updated valuation on your current home to understand your equity position.
• Review your borrowing capacity with today's rates, not last year's.
• Explore bridging or security-substitution loan options if you're buying before you sell.
• Line up your broker and legal team early - fast-moving markets don't wait.

The key is planning. Too often, upgraders hesitate or rush - and miss their window.

With the right preparation, the process can be smooth and financially smart.

Final thought: leap ahead of the pack

With momentum shifting and borrowing capacity on the rise, upgraders are in a strong position to lead the next wave of property movement. They've got equity, experience, and a clear sense of what they need in a home.

If you've been waiting for the right time to move up - this could be it. The window may not stay open for long.

For more information speak with Flint's residential mortgage specialists