Australia's property market has turned. For several years, strong demand and limited stock pushed values higher and left buyers with little room to move. That has reversed. Higher interest rates have cooled demand, properties are accumulating on the market, and buyers are negotiating from a position they have not held in years.
National dwelling values fell 1.9% over the three months to July 2026, while values across the combined capitals declined by a sharper 2.5%, according to the Cotality Monthly Housing Chart Pack.
Falling values raise an obvious question for anyone considering a purchase: move now, or wait to see how much further values slide? We don't think that is the right question, because nobody reliably picks the bottom of a market. The better question is whether current conditions allow a buyer to secure the right property on better terms.
For developers, businesses and investors buying property for commercial or investment purposes – rather than as a home to live in – being ready to act when that opportunity appears can matter more than trying to time the market perfectly.
The downturn is becoming more widespread
Sydney recorded the steepest quarterly decline at 4.0%, followed by Melbourne at 3.4%, Canberra at 2.1%, Brisbane at 0.6% and Perth at 0.3%. Three capitals moved the other way, with Darwin up 2.4%, Hobart up 1.4% and Adelaide up 0.1%.
More recent figures suggest the softening has continued. As at 10 August, all five major capital city markets tracked by Cotality's daily index were recording declines over the preceding 28 days.
The scale of the adjustment varies considerably. Sydney values sat 5.3% below their January 2026 record high in July and Melbourne was 5.5% below its March 2022 peak, while Brisbane and Perth remained less than 1.0% below their own recent highs.
Cotality head of research Gerard Burg notes that although values are falling across more cities, “underlying supply and demand conditions remain quite different”. A national downturn does not mean every market is behaving the same way.
Why the market is changing
The clearest change is the volume of property available. There were 135,008 properties listed for sale nationally over the four weeks to 9 August, 14.9% higher than a year earlier, with capital city listings up 22.6%. This has not been driven by a rush of vendors listing, since new listings were tracking 7.1% below the five-year average. Instead, the build-up reflects easing buyer demand.
Selling conditions have shifted accordingly:
- The median time on market across the capitals rose to 33 days over the three months to July, from 26 days a year earlier
- The median vendor discount across the capitals widened to 3.9%, from 3.2% in the three months to April
- Auction clearance rates across the combined capitals fell from around 66% in February to a low of 42.3% in late June, and have stayed below 50% since the last week of May
Underpinning all of this is the cost of money. The Reserve Bank of Australia held the cash rate at 4.35% in August, its second consecutive hold after three increases between February and May. The board signalled that inflation remains too high and is not expected to return to around the midpoint of the target range until late 2027, while indicating it is prepared to move again if needed. Tighter conditions have reduced borrowing capacity and weighed on buyer demand.
What buying property in a falling market does and doesn't mean
A good purchase and a cheap one are not the same thing, and buying property in a falling market does not guarantee either.
Location, quality, intended use and longer-term prospects still matter, as does whether the transaction makes commercial sense for the buyer and the structure it sits in.
The figures also show why it is risky to treat a downturn as one uniform market. National values fell 1.9% over the quarter but remained 5.3% higher than a year earlier, and Perth recorded a modest 0.3% quarterly decline while still sitting 20.5% above its level of 12 months ago.
What softer conditions do offer is more room to negotiate than buyers have had recently. A vendor whose property has been listed longer than expected is more likely to move on price or terms, and higher stock levels give buyers the chance to compare options rather than chase the first suitable listing.
Where that room sits is worth understanding. The upper end of the market has softened most sharply. Over the three months to July, values in the top 25% of the Sydney market fell 5.2% and the top 25% of the Melbourne market fell 4.6%, against declines of 1.4% and 1.2% in the lowest quartile of those cities. For buyers considering higher-value property, that suggests some of the greatest price adjustment is occurring at the upper end of the market.
Being finance-ready in a slower market
A softer market reduces urgency, but it does not mean every property will sit unsold. Well-located, realistically priced property can still attract competition, and a capital city median of 33 days on market describes a slower market rather than a stalled one. Regional markets remain tighter still, with total listings up just 4.5% year on year.
We think this is where preparation does the work, particularly for businesses, developers and investors considering a commercial or investment opportunity. Knowing how a purchase will be funded, whether through a bank or a non-bank lender, gives a buyer certainty about what they can commit to and how quickly they can proceed. It also allows them to assess an opportunity on its merits, rather than starting the finance conversation after terms have been agreed.
For business, commercial and qualifying investment purchases, the right finance structure depends on the transaction itself, from the security position through to the intended use and exit strategy. That is true whether the funding comes from a bank, a non-bank lender or another source. The market may be handing buyers more negotiating room, but using it depends on having the finance strategy in place before the right property appears.
At Archer Wealth, we provide private finance for business, commercial and qualifying investment purposes, including bridging finance, short-term property finance, development finance and commercial property loans. As a private lender in Australia, we can provide funding for transactions where timing and structure matter. If you are weighing up an opportunity, contact us to discuss your deal, or speak to your broker about Archer Wealth.