PROPERTY MARKET · BUYER UPDATE

What a softer market means for investors and owner-occupiers

Australia’s property market is in a quieter phase. For prepared buyers, that can mean a different set of opportunities.

Budget update: Federal budget reforms to negative gearing and capital gains tax have added uncertainty for investors — and may be creating more room for owner-occupiers and prepared buyers.

Prices have eased in some markets

Sydney, Melbourne and Canberra have seen values drift lower since the start of the year. Nationally, the home value index is growing at its slowest pace since early 2025. Auction clearance rates have hovered around 50% — a level not seen in several years — and some forecasters are expecting further softening through 2026.

Lower values can reduce the entry point, but it’s worth noting that higher interest rates also affect borrowing capacity. Affordability has to be assessed across both dimensions.

Less competition, more room to negotiate

Buyer demand has eased in many markets, and in areas where supply has lifted — particularly Sydney and Melbourne — vendors may have more motivation to negotiate on price, conditions and settlement terms than was typical during the peak of the cycle.

Vendor discounting is increasing

According to Cotality, buyers have been paying around 5% below the original asking price for private treaty sales across capital cities — above the decade average of 3.3%. Properties are also taking longer to sell, giving buyers more time to research, compare and negotiate without the same pressure as before.

Different sales methods are emerging

With auction clearance rates falling, more vendors are opting for expressions of interest (EOI) campaigns or private treaty sales. These methods can benefit buyers by:

• Allowing more time to make a considered decision
• Giving the ability to include subject-to-finance or building and pest inspection clauses
• Reducing the pressure of unconditional, day-of-auction decisions

If you are attending auctions, come prepared — they remain unconditional and can still be competitive in tightly held areas.

Regional markets are holding up

Regional areas have shown more resilience than the capital cities, rising 4.2% over the first four months of 2026 compared to 1.8% across capitals. Relative affordability and ongoing population movement are contributing factors.

Lower price points are performing better

In Sydney, lower-tier house values are up 2.9% over the past year while upper-tier values have declined 3.3%. First home buyer government support schemes are supporting activity at the entry level of the market.

 

If you’re thinking about buying in the current market, understanding your borrowing capacity early puts you in a stronger position when the right property comes along.

Talk to a buyer’s agent →

General information only. Please consult your financial adviser for advice specific to your circumstances.