A prominent property expert has issued a cautionary note, stating that the upcoming six weeks will be pivotal for the housing market as the ongoing conflict in the Middle East exerts pressure on Australia’s economy.

Tom Panos, a renowned auctioneer in Australia, emphasized that the next month and a half will be crucial due to several uncontrollable external factors affecting both sellers and buyers.

“The next six weeks are not just another period; they are not merely another news cycle. They represent a defining moment,” Panos explained.

He highlighted that the federal budget announcement is expected in six weeks, along with a significant interest rate decision anticipated in about five weeks, which could impact households nationwide.

“Additionally, we are witnessing an escalating conflict, which shows no signs of de-escalation,” he added.

The turmoil in the Middle East has resulted in the closure of the Strait of Hormuz, disrupting global oil supplies. This has driven diesel prices above $3 per litre and caused shortages at numerous petrol stations across Australia.

The Reserve Bank increased its cash rate by 0.25 percentage points in March, bringing it up to 4.1 per cent, with Westpac forecasting another three hikes this year, and that rates may not start falling until 2028.

Treasurer Jim Chalmers is set to hand down the budget on May 12, though he has remained tight-lipped on specific policies and changes to tax.  

Tom Panos, one of Australia’s leading auctioneers, said the next month and a half would be critical due to a combination of factors beyond the control of sellers and buyers

‘We’ve got shaking confidence,’ Mr Panos said. 

‘Here’s the truth no one wants to say out loud: consumer sentiment is smashed. We’re talking about levels we haven’t seen in decades.’

Mr Panos pointed to findings published by ANZ-Roy Morgan on March 31, which revealed consumer confidence was down 4.3 points to 58.8.

It was the second consecutive record low for the index since it began in 1972, and the first time it’s fallen below 60.

‘When confidence drops, you know what happens? People do stop spending. People do stop moving, and people stop making decisions,’ Mr Panos said.

‘Interest rates don’t just fall because we want them to. This is chronic. They stick around, not for months, but potentially for years. That’s why we need this war to end.’

The auctioneer said there is an ‘uncomfortable truth’ within all of this.

‘There’s only one lever right now that could change everything quickly, and it’s not the RBA, and it’s not the budget, it’s not policy,’ he said.

Index results by Cotality in March highlighted the median house value is roughly $1.2million in Sydney, and about $820,000 for Melbourne (stock image)

‘It’s the decision to end the war. Because war is not just conflict, it’s an economic model.

‘While it continues, uncertainty continues, inflation lingers, confidence collapses. So the next six weeks, they’re not just important – but they’re also an Australian test of leadership and communication.’

Mr Panos shared a message for Canberra, saying he hoped Chalmers is ‘thinking hard and fast’ ahead of the budget.

The Albanese government has repeatedly stated it wants a de-escalation of the conflict in Iran.

‘I think all of your viewers would agree that this war cannot end soon enough,’ Attorney-General Michelle Rowland told Seven’s Sunrise on Tuesday.

Over the Easter weekend, Chalmers told The Sydney Morning Herald that Australians are paying for the war, despite not choosing it.

‘From an economic point of view, the end of the war can’t come soon enough because it’s punishing Australians for a series of decisions that they didn’t take,’ he said.

He shed light on some of the key focuses of his budget.

Mr Panos said Treasurer Jim Chalmers must think ‘hard and fast’ for his budget

‘There’ll be spending cuts, as there have been in all of our budgets. And there will be tax reform,’ he said.

‘We’ve also got to lift the speed limit on the economy … to make sure the economy can grow quicker with lower inflation as we come out of this oil shock.’

Pushed on specifics – superannuation, reforming capital gains tax (CGT) – the Treasurer refused to budge.

‘We haven’t landed the thing yet, we haven’t made all the decisions,’ he said.

Canstar analysis shows if the cash rate rose by 0.25 percentage points in May, June and August, monthly repayments on a $600,000 loan with 25 years remaining would rise by approximately $276.

Including the two hikes already this year, total monthly repayments could increase by $457 by August.

But SQM Research has downgraded its 2026 market forecast, which shows Australia’s two most prominent property markets – Sydney and Melbourne – are now officially going backwards due to the impact of war in the Middle East. 

It forecasts Sydney homes will fall by up to six per cent and Melbourne is projected to follow suit with anticipated falls of up to four per cent.

Index results by Cotality in March highlighted the median house value is roughly $1.2million in Sydney, and about $820,000 for Melbourne.

In Brisbane it’s about $1.1million; Adelaide is $937,000; Perth is $1million; Hobart is $730,000; Canberra is $890,000 and Darwin is $610,000.