Property listings are rising as prices continue to fall across the country, causing many to ask whether Australia is entering a buyer’s market.
Buyers are spoilt for choice, but vendors are struggling to sell. Why? Buyers are waiting for bigger discounts as the market continues its downturn. Sellers have been slower to adjust their price expectations, resulting in lower clearance rates.
Listings in Sydney rose 6.6% in July, up 28% compared to the same time last year, despite the traditional winter slowdown. Nationwide, listings climbed 12.4% to almost 279,000 properties, according to SQM Research. That is the strongest annual increase in available stock in more than a year.
Buyers recognise that there is opportunity, but they also have a reason to wait. Sydney is experiencing the greatest price falls of any capital, with dwelling values down 1.4% in July, followed by Melbourne at 1.2%. Nationally, values fell 0.7%, the steepest monthly decline since December 2022.
The top end of the market has been hit hardest by the downswing. Cotality data shows upper-quartile values fell 3.2% across the three months to July, while lower-quartile values actually rose 0.3%. With home prices expected to continue falling through 2026, buyers are either hoping the downturn reaches the lower end of the market or holding out for a strong deal on premium property.
Monthly declines have now been recorded across all capital cities with the exception of Perth (+0.1%), Hobart (+0.1%) and Darwin (+0.8%). The combined regional market also fell for the first time since January 2023.
The magnitude of the decline will depend heavily on what happens to interest rates. The Reserve Bank has already lifted the cash rate three times this year, in February, March and May, taking it to 4.35%. Whether it moves again will shape how much further borrowing capacity, and prices, have to fall.
Buyer’s advocate Emma Bloom told the Sydney Morning Herald that a drop in Chinese buyers is having a major impact, particularly in Melbourne. She said there are now more Chinese vendors than buyers, and linked this directly to recent tax changes. The broader data supports the trend. Foreign Investment Review Board figures show Chinese buyers sought to acquire 638 homes worth a combined $800 million since July 2025, down sharply from a peak of $31.9 billion in a single year in 2015-16. The temporary ban on foreign purchases of established dwellings has since been extended to 30 June 2029, and state foreign buyer surcharges of 7% to 9% continue to apply.
Other factors are also at play. Downsizers are unwilling to sell in a down market, which means upsizers have fewer options, if any.
The primary factor behind this strange market is a loss of urgency. Previous booms were fuelled by the fear of missing out. Now, few are keen to take the risk.
That said, conditions have genuinely shifted in favour of buyers. There is more choice, less competition, and greater scope to negotiate. Vendor discounting across the combined capitals has widened to a median of 3.6%, and auction clearance rates have softened considerably. Whether that translates into a better outcome for any individual buyer still depends on whether vendors meet the market, and on how much further values move from here.
So are we entering a buyer’s market? Maybe. Supply is still constrained, unemployment is low, and the population is still growing. Construction is expensive, and if property values continue to drop it will hamper the feasibility of new projects. If unemployment remains low, then we are unlikely to see many forced sales, which in turn limits supply.
So what does this mean for you? It means the calculation is more finely balanced than the headlines suggest, and the answer will look different depending on your borrowing capacity, your timeline and the market segment you are buying in.
If you are not sure whether now is the right time to buy, get in touch with our team. No pressure, no jargon, just simple guidance on your options.
This article is general information only and does not take into account your objectives, financial situation or needs. Property market data is current as at the July 2026 Cotality Home Value Index release and is subject to revision.