Australia’s property market has shifted gears.
After a period of strong growth, we’re now seeing a softer phase emerge — driven by higher interest rates, ongoing affordability challenges, and changes outlined in the Federal Budget. The result? Buyer demand has cooled in many parts of the country.
This is most noticeable across Sydney, Melbourne and Canberra, where property values have eased back since the start of the year.
But like always in property, it’s not a one-size-fits-all story.
Conditions are still varying significantly depending on suburb, property type, and price point. While some pockets are holding steady, others are seeing more listings hit the market, longer selling periods, and sellers becoming more open to negotiation.
For buyers who are prepared, this kind of market can open doors that simply weren’t there during the peak.
So, what does it all mean in practical terms?
Falling prices may help — but borrowing power still matters
We’re seeing noticeable price adjustments across several capital city markets, with Sydney, Melbourne and the ACT leading the shift.
Auction clearance rates have been sitting around the 50% mark in recent weeks — a six-year low — and some forecasts are pointing to potential price declines of up to 10%.
At face value, that sounds like good news for buyers. And in many cases, it is. Lower prices can reduce the upfront hurdle to getting into the market.
But there’s another side to it.
Higher interest rates are still impacting how much you can borrow — and for most buyers, borrowing capacity plays a bigger role than purchase price alone. So even as values soften, affordability doesn’t always improve as much as people expect.
This is where having a clear understanding of your finance position becomes crucial.
Less competition can shift the balance
One of the biggest changes we’re seeing right now is a reduction in buyer competition.
While some areas are still experiencing tight supply, many markets have started to rebalance. That means fewer bidders at auctions, less urgency, and more breathing room for buyers.
And with that comes opportunity.
In softer conditions, sellers are often more motivated — particularly if their property has been sitting on the market for a while. That can create more flexibility around price, settlement terms, and contract conditions.
It’s a very different dynamic compared to the peak, where buyers often had to move quickly and make concessions just to stay in the game.
Vendor discounting is on the rise
We’re also seeing a clear increase in vendor discounting.
According to Cotality, buyers have recently been securing properties at around 5% below the original asking price across capital cities. That’s notably higher than the long-term average of 3.3%.
On top of that, the Federal Budget’s proposed changes to negative gearing and Capital Gains Tax have introduced a level of uncertainty for investors. In some cases, agents are already adjusting price expectations to reflect softer demand.
Another key shift? Properties are taking longer to sell.
For buyers, that extra time can be valuable. It allows for more research, better comparisons, and more considered negotiation — without the same pressure that defined the peak market.
More choice in how you buy
As conditions evolve, so too do the ways properties are being sold.
We’re seeing more sellers move away from auctions and towards alternatives like Expression of Interest (EOI) campaigns and private treaty sales.
For buyers, this can be a big advantage.
An EOI campaign gives you the chance to submit your best and final offer by a set date — along with your preferred terms and conditions. Private treaty sales, on the other hand, come with an advertised price and a more straightforward negotiation process.
Both options generally offer:
- More time to make informed decisions
- Lower-pressure negotiations
- Greater flexibility to include conditions like finance approval or building and pest inspections
Auctions still play a key role in the market — but they tend to remain fast-paced, competitive, and unconditional. If you’re heading down that path, preparation is everything.
Be ready when the opportunity comes
A softer market doesn’t mean an easy market — but it does mean a different one.
For buyers who are organised and financially prepared, there can be genuine opportunities to secure the right property under better conditions than we’ve seen in recent years.
The key is knowing where you stand before you start.
Ready to explore your options?
If you’re thinking about making a move, now is a great time to get clarity around your borrowing capacity and loan options.
At Fox Mortgage Services, we’ll help you understand what’s possible — so when the right opportunity comes up, you’re in a position to act with confidence.
Get in touch today to see what might be available for you.