The property market is on the move after interest rate rises and tax changes stalling price growth in some cities while others drop. This might just be a window of opportunity for buyers.
New reporting from realestate.com.au Property Market Outlook suggests Sydney and Melbourne are on track to drop 3% and 4% in value respectively over 2026.
That may just provide opportunistic buyers a way into the market, but they would have to be quick because the downturn isn’t expected to last long. A mixture of population growth and housing supply constraints will limit the decline with growth expected to resume in late 2026 before continuing to rise in 2027 (though at a lower rate than typical).
Growth is expected to continue across Australia’s other cities but at a much lower rate. Despite that, prices are still expected to be higher at the end of 2026 than at the start in Brisbane, Perth, and Adelaide.
Considering that Sydney prices have risen every year since 2022, when are you going to get a better opportunity?
You’ll be spoilt for choice too. New listings for the first five months of 2026 were up 6-7% in both Sydney and Melbourne, according to report author, Angus Moore, while auction clearance rates have dropped to as low as 47% in Sydney.
That same opportunity isn’t available elsewhere. For example, Perth prices have grown by over 20% in the past 12 months, greatly reducing the affordability that attracted buyers originally. Perth is expected to end 2026 with values 8% higher than the start.
Half the Big 4 Banks are predicting prices to drop even further in Sydney and Melbourne. NAB is forecasting a 6-7% drop, while ANZ goes as far as 8%. While CBA and Westpac are tipping modest growth of 5% for 2026.
Keep in mind that this effect will not be applied evenly across the market.
One- and two-bedroom apartments are very attractive to investors but are likely to underperform given the tax reforms. Houses in largely owner-occupied areas are expected to fare better.
So what does this mean for you? You can grab a great deal if you are quick and decisive. We can help you sort the finances. Get in touch with us today to secure your deal before it’s too late.
Disclaimer: The information in this article is general in nature and doesn’t take your personal situation into account. Property forecasts are third-party projections, not guarantees, and markets can move either way. We’re not here to tell you when to buy or what the tax changes mean for you. Talk to your accountant about the rules. Talk to us about the finance.