Should I Buy My First Home Right Now? What War, Oil Prices and History Can Teach You

Wars in Europe and the Middle East. Oil prices swinging by 20% in a month. Inflation still above target. The news cycle makes buying your first home feel reckless right now. But is it? History suggests the question isn't whether the world is uncertain — it always is. The question is whether you are ready.

This article looks at what actually happens to housing markets during periods of global disruption, what oil prices and wars have historically meant for Australian property buyers, and how to use that knowledge to make a clear-headed decision about your own situation in 2026.

The Uncertainty Trap: Why "Waiting for a Better Time" Rarely Works

If you've been waiting for a calm, stable moment to buy your first home, you've been waiting for something that doesn't exist. Cast your eye back over the last 80 years and you'll find a near- continuous stream of reasons to hesitate: wars, recessions, oil shocks, political upheaval, pandemics, and financial crises.

Every generation has faced its own version of "now is the worst possible time." Every generation has largely been wrong about that. The people who waited for certainty often waited longer than the people who bought through uncertainty — and paid more for it.

What History Actually Teaches Us About Buying During Crises

Let's look at five major periods of disruption and what they meant — in practice — for people who bought property through them.

World War II (1939–1945): "How Can Anyone Think About Property Right Now?"

The second World War was the single largest disruption of the 20th century. Economies were on war footing, labour was scarce, building materials were rationed, and millions of men were overseas. The very idea of buying a house seemed almost frivolous.

Yet the Australians who did purchase — or hold — property through the war years were well-positioned for what came next. Post-war, a massive construction boom, returning soldiers starting families, and strong government investment in housing drove property values and living standards sharply higher through the late 1940s and 1950s. Those who held through the uncertainty generally came out ahead.

The 1973 Oil Crisis: When Oil Prices Sent Everything Sideways

In October 1973, OPEC declared an oil embargo against nations that had supported Israel in the Yom Kippur War. The price of oil quadrupled almost overnight. The global economy was blindsided. What followed was a decade of stagflation — high inflation combined with slow growth — that tortured policymakers and households alike.

In Australia, interest rates climbed steadily through the 1970s and early 1980s, eventually reaching extraordinary heights — mortgage rates hit 17% in 1989. For existing variable-rate borrowers, this was brutal. But here's what happened to property prices over the same period: they kept rising, largely because inflation pushed up the nominal value of real assets, including land.

People who bought in 1973 or 1974 — despite sky-high anxiety about the oil shock — owned an asset whose nominal value climbed substantially through the inflationary 1970s and 1980s.

The Gulf War (1990–1991): A Short Shock with a Modest Property Effect

Iraq's invasion of Kuwait in August 1990 triggered a sharp oil price spike and a global recession. In Australia, property prices in Sydney fell around 10% between 1989 and 1991, and the market was broadly flat through the Gulf War period.

But the post-war recovery was swift. By 1993–1994, property markets in Sydney and Melbourne had recovered and resumed growth. Someone who bought at the "scary" moment of the Gulf War and held for five years would have been well ahead.

The Global Financial Crisis (2008–2009): Australia's Near Miss

The 2008 Global Financial Crisis was the worst financial shock since the Great Depression. In the US, the UK, and Ireland, property markets collapsed by 20–50%. Banks failed. Unemployment surged. First home buyers were widely advised to wait.

In Australia? The property market fell approximately 3–8% depending on the city — and then recovered within 18 months, going on to post some of the strongest growth of the decade through the early 2010s. The Australian banking system's relative strength, strong immigration, and China's demand for Australian resources cushioned the blow dramatically.

Australians who froze during the GFC and waited for the "all clear" found themselves buying in 2010 or 2011 — often paying significantly more than the 2008–2009 prices they had been scared away from.

COVID-19 (2020): The Crisis That Created a Boom

When a global pandemic shut economies in March 2020, the predictions were dire. Many economists forecast a 30% decline in Australian property prices. First home buyers were told to hold off — wait and buy at the bottom of a deep crash.

What actually happened was almost the opposite. Property prices fell around 2–3% in mid-2020, then rocketed to new records. By the end of 2021, median values in many capital cities were up 20–30%. The rare buyers who acted in May or June 2020, amid maximum fear and uncertainty, made extraordinary gains.

What Oil Prices Actually Mean for Your Mortgage in 2026

Right now, oil prices are being buffeted by conflict in the Middle East, production decisions by OPEC+, and global demand uncertainty. Why does this matter to someone trying to buy a house in Brisbane or Perth?

The Oil → Inflation → Interest Rate Chain

Oil prices feed directly into the cost of almost everything: transport, manufacturing, food distribution, construction materials. When oil climbs, inflation climbs with it. When inflation climbs, the Reserve Bank of Australia (RBA) faces pressure to keep interest rates higher for longer — or raise them further.

The key insight here is that oil prices affect your costs as a future borrower — but they do so with a lag. The transmission from oil price to mortgage rate typically takes 6–18 months through inflation data, RBA decisions, and bank repricing.

What This Means Practically

If you're planning to buy in the next 6–12 months, the oil price today is less relevant than where it will be when you settle. And that's almost impossible to predict. What you can do is:

• Stress-test your budget at higher rates. Can you afford repayments if the RBA hikes once or twice more? If yes, oil-driven inflation is manageable for you.
• Build in a buffer. Borrow slightly less than your maximum. That headroom protects you from rate surprises.
• Lock in certainty selectively. If oil prices are high and you're worried about further rate rises, a split loan (part fixed, part variable) can reduce your exposure.

Wars and Housing: What Geopolitical Conflict Actually Does to Australian Property

Ongoing conflicts in Eastern Europe and the Middle East have created a persistent sense of global instability. How much should this weigh on an Australian first home buyer's decision?

Direct Effects: Immigration and Demand

Wars in other countries often increase demand for Australian property — not decrease it. Conflict zones produce refugees, displaced workers, and wealthy emigres looking for stable places to live and invest. Australia has historically benefited from being a safe, well-governed destination in times of global turmoil.

Net overseas migration to Australia reached record levels through 2023–2025, partly driven by people seeking stability. This structural demand supports the case for property ownership in major cities.

Indirect Effects: Commodity Prices

Australia is one of the world's largest exporters of iron ore, coal, natural gas, wheat, and other commodities. Wars and sanctions disrupt global supply chains in these areas, often driving commodity prices — and therefore Australian export revenues and employment — higher. This has a secondary positive effect on property markets in resource- linked cities like Perth and Brisbane.

The Only Question That Actually Matters: Are You Ready?

Here is the central insight from 80 years of history: the timing of your purchase relative to global events matters far less than the strength of your personal financial position. A buyer who is financially solid will ride through almost any macro storm. A buyer who stretches too far is vulnerable regardless of the headlines.

There are five things that actually determine whether now is the right time for you:

What If I Buy and Prices Drop?

This is the fear that paralyses more first home buyers than any other. And it deserves a direct, honest answer.

Yes, Australian property prices can and do fall — briefly and locally. They fell around 10% in Sydney and Melbourne in 2017–2019. They fell 2–3% nationally in mid-2020. They fell 6–8% in some capitals in 2022–2023 as rate rises hit. Each time, they recovered.

The key question is: what happens to you personally if prices fall 10% shortly after you buy?

The difference between a price fall being catastrophic versus inconvenient is almost entirely about whether you bought within your means. Not about world events.

The Real Risks of Waiting: What "Playing it Safe" Actually Costs

Waiting isn't a neutral, risk-free position. It has its own costs — costs that are easy to underestimate because they accumulate quietly.

A Framework for Making the Decision

Rather than trying to time geopolitical events or predict oil prices, here is a simple framework for thinking through whether now is the right time for you.

So What About Right Now — March 2026?

Let's be direct about the current environment and what it objectively means for a first home buyer in Australia.

• Interest rates are at 3.85% (cash rate) — elevated relative to 2021 lows but well within historical normal range. Borrowing power is constrained but workable for most dual-income couples.
• Inflation is running at around 3.8% — above the RBA's target but not at crisis levels. Real assets like property provide partial inflation protection.
• Property prices remain high — median national value around $912,000. Entry-level and regional markets are more accessible than headline figures suggest.
• Supply remains structurally constrained — Australia continues to build fewer homes than the population growth requires. This supply/demand imbalance is a persistent floor under prices.
• Government schemes remain available — the 5% Deposit Scheme, First Home Super Saver Scheme, and state-level stamp duty concessions are all still active.

Frequently Asked Questions