By Rodney McLoughlin | 2 October 2026
Waiting for house prices to fall? Check whether your borrowing power is falling too.
Australia’s property downturn is generating alarming headlines. For Sydney buyers, the question is becoming urgent: should you negotiate now, or wait for a bigger discount?
Buying now can make sense when the property, price and finances stack up. Waiting can make sense when they don’t. Neither decision should depend on guessing the market bottom.
Why the property crash debate is getting louder
Cotality’s September housing report shows national dwelling values fell 1.1% during the month, marking six consecutive monthly declines. Values nationally are 5.2% below their March peak, while Sydney is 8.6% below its February peak.
The weakness is widespread: 97% of capital-city suburbs recorded falling values over the September quarter.
The Australian Financial Review’s coverage of the deepening downturn reflects the growing concern. Meanwhile, ABC News reports economists’ warnings of potential national peak-to-trough falls of 10–15%.
Those are forecasts, not guaranteed outcomes. They also describe the total possible decline from the peak—not necessarily another 10–15% from today.
The trap: a cheaper home can still be harder to afford
On 29 September, the Reserve Bank increased the cash rate to 4.60%, its fourth increase this year.
Higher mortgage rates can reduce the amount buyers can borrow and increase repayments. A falling purchase price therefore needs to be considered alongside an updated lending assessment.
Here is a simple illustration. Assume your deposit stays unchanged and purchase costs are excluded: a home falls from $1.5 million to $1.4 million, but your maximum purchase budget falls from $1.5 million to $1.38 million because your loan approval shrinks. The home is $100,000 cheaper—and still $20,000 beyond your budget.
That won’t describe every buyer. Someone with substantial cash or borrowing capacity to spare may be better placed to negotiate.
The question is whether your buying position is improving—not simply whether prices are falling.
Sydney’s averages won’t tell you what to offer
The realestate.com.au September Home Price Report highlights greater price pressure on houses than units, with expensive Sydney regions among the weakest performers. Its figures come from a separate price index and should not be treated as interchangeable with Cotality’s results.
For buyers searching in the Eastern Suburbs, Inner West or Lower North Shore, the next step is to examine comparable properties in the specific neighbourhood.
A citywide fall is no justification for applying the same discount to every listing. Land size, condition, aspect, parking, strata liabilities and buyer competition can all change the assessment.
A discount from an ambitious asking price may still leave you paying too much.
Five checks before you buy—or decide to wait
1. Refresh your finance.
Ask your lender or broker to confirm your current borrowing limit, repayments and available buffer. Include stamp duty, other purchase costs and foreseeable repairs in your budget.
2. Use recent comparable sales.
Focus on completed sales of similar properties. Check the sale dates and adjust for meaningful differences rather than relying on last year’s result or an online estimate.
3. Assess the competition.
Ask about offers and inspect competing listings. A quiet open home is useful context, but it doesn’t prove there are no serious buyers.
4. Understand the seller’s circumstances.
Find out how long the property has been marketed, whether expectations have changed and whether settlement timing matters. Test what the agent tells you against the evidence.
5. Investigate the property’s risks.
Have the contract reviewed and obtain appropriate building, pest or strata advice. A reduced price doesn’t resolve defects, expensive works or restrictions on how you can use the property.
When buying now could make sense
Buying deserves consideration when you have secure finances, a suitable holding period and a property that meets your needs at a price supported by current evidence.
You also need to be comfortable with the possibility that its value could fall further after purchase.
If those conditions are met, trying to capture every last dollar of a future decline may distract you from assessing the opportunity in front of you.
When waiting could be the better decision
Waiting is reasonable if repayments would leave you stretched, your income is uncertain, you may need to sell soon, or the available homes don’t meet your requirements.
It can also be sensible when the seller’s price remains above what comparable sales support.
Use the time to strengthen your deposit, update finance and track actual sales. Set clear buying criteria so that waiting remains a deliberate strategy rather than an indefinite reaction to headlines.
You cannot control where the market goes next. You can control the price you agree to, the risks you investigate and the debt you take on.
Found a Sydney property and unsure whether it represents value? Rodney McLoughlin can help you assess the price and buying strategy through independent negotiation and due diligence support.