“The loss of momentum in house prices and outright falls now in Sydney and Melbourne is particularly interesting,” he said on Monday.

While he noted the RBA doesn’t target house prices, the overall impact they have on the economy and sentiment is relevant.

“Given the importance of housing for household wealth and the efficient functioning of the banking system, house price falls will start to feature prominently in RBA thinking,” he claimed.

The frequently dovish economist, last week said lifting interest rates further into the already tough conditions for households “would be monetary policy vandalism”.

Ultimately, it could come down to a data point to be unveiled on Wednesday. The first set of inflation numbers since US and Israeli strikes on Iran led to the closure of the Strait of Hormuz and skyrocketing oil prices will be unveiled on Wednesday.

A large inflation spike in March is expected by economists, off the back of sharp increases to petrol and diesel prices which have filtered through to many sectors of the economy.

Commonwealth Bank economists have tipped inflation to rise almost a full percentage point for the month, from 3.7 per cent to 4.6 per cent.

The trimmed mean inflation, which removes the more volatile price increases such as petrol costs, will nudge up from 3.3 per cent to 3.5 per cent, they forecast.

CBA economists, in unison with the other Big Four banks, said the RBA was more likely than not to hike rates again off the back of Wednesday’s inflation data.

“The data will be keenly watched given the RBA is due to hand down its decision on interest rates on May 5, with money markets suggesting a 72 per cent chance of a 25 basis point rate hike,” the bank said.

The Reserve Bank favours the trimmed mean as a true measure of inflation, with the figures already well above the bank’s target band of between two per cent and three per cent.

with AAP

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It is not uncommon to see a 10 to 20 per cent difference in values based on timing alone. Buyers who entered during the period of uncertainty often find themselves well ahead within a relatively short period. Those who wait for clarity frequently end up paying a premium for the privilege.

Acting during uncertain conditions is not the same as buying without discipline. Uncertainty is largely sentiment-driven, based on how people feel about the market at a given moment. Risk relates to fundamentals like location quality, supply and demand, infrastructure investment and long-term population and employment drivers.

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Experienced buyers focus on fundamentals and use uncertainty as a tool rather than a deterrent. They do not attempt to call the exact bottom of the market. Instead, they recognise when conditions have shifted in their favour and move decisively when the numbers support the decision.

Market psychology plays a significant role in how the V effect unfolds. When uncertainty is at its peak, fear tends to dominate. Buyers hesitate, delay decisions and second-guess their position. Once confidence returns, that hesitation quickly converts into urgency, and in some cases, FOMO.

It is this emotional shift that drives the speed of the recovery phase. By the time the average buyer feels comfortable re-entering the market, the opportunity has often already passed. Timing based on sentiment is consistently unreliable. The moments that feel the most uncomfortable are frequently the ones that offer the best value.

For first-home buyers in particular, this dynamic is even more important. Rather than waiting for ideal conditions, the more effective approach is preparation. Understanding your borrowing capacity, having finance in order and being clear on your criteria allows you to act when conditions move in your favour. In uncertain markets, vendors are more open to price adjustments. Contracts become more negotiable. Days on market extend. These are conditions that simply do not exist when competition is intense and confidence is high. Those windows do not stay open indefinitely.

Property is a long-term asset class. Short-term uncertainty is a feature of the cycle, not a reason to stay away from it. The V effect is a reminder that markets move quickly in both directions.

Buyers who wait for certainty tend to buy on the way up. Those who act during uncertainty give themselves the chance to enter at a better price, and in property, getting ahead early is what allows you to grow equity and expand your portfolio a lot faster.

Abdullah Nouh is the founder of Mecca Property Group and a Melbourne-based buyers’ advocate specialising in long-term, fundamentals-driven property strategy. He works with families and investors to build sustainable wealth through strategic residential and commercial acquisitions. He holds a Master’s in Property from the University of Technology Sydney.