Sydney buyers are starting to feel more confident about buying property — but that does not mean the market has suddenly turned.
New Westpac–Melbourne Institute data released on 18 August shows its “time to buy a dwelling” index jumped 12.1% in August to 95.7, its highest level since November 2025. Sydney and Melbourne both moved back above the 100 mark. However, the national result remains below the long-term average of 119, meaning buyers are still relatively cautious.
At the same time, Sydney property values have been moving in the opposite direction.
Cotality’s August Housing Chart Pack shows Sydney dwelling values are now more than 5% below their recent peak, while its national Home Value Index fell 0.7% in July — the largest monthly decline since December 2022.
So does a softer Sydney property market combined with improving buyer confidence mean now is a good time to buy?
The answer is: potentially — but only if you buy the right property at the right price.
Interest Rates Are Still Putting Pressure on Buyers
The Reserve Bank of Australia left the cash rate unchanged at 4.35% on 11 August 2026, following three increases earlier this year. The RBA said financial conditions have tightened, consumer spending is slowing and momentum in the housing market has shifted, with property prices falling in some capital cities and new housing loans declining noticeably.
Importantly, the RBA has not declared the rate-rise cycle over.
Inflation remains too high and the Bank has said it is prepared to increase the cash rate again if inflationary risks intensify.
That uncertainty is continuing to affect borrowing capacity and buyer confidence.
But Buyers Are Beginning to Feel More Comfortable
The latest consumer sentiment numbers are interesting because most of the improvement occurred after the RBA’s August decision to leave rates unchanged.
Mortgage holders recorded the biggest increase in confidence, although 59% of respondents still expect mortgage interest rates to rise further.
For property buyers, this creates an unusual market.
Prices have softened.
Competition has reduced in parts of Sydney.
But confidence appears to be slowly returning.
That can create opportunities.
Sydney Property Values Are Already Down More Than 5%
Cotality’s latest analysis shows Sydney dwelling values have already fallen more than 5% from their peak.
That doesn’t mean every Sydney property is now 5% cheaper.
Sydney isn’t one property market.
A quality family home in a tightly held Eastern Suburbs, Lower North Shore or Inner West location can behave very differently from an apartment with defects, a poorly positioned property or a house on a compromised site.
This is one of the biggest mistakes buyers make when reading property-market statistics.
The Sydney market can be falling while an individual property remains highly competitive.
Likewise, broader market weakness can create substantial negotiating opportunities on properties where vendors have unrealistic expectations or where buyer competition has disappeared.
Auctions Are Showing Buyers Have More Leverage
Auction results also suggest buyers remain cautious.
For the week ending 9 August, Sydney recorded 412 auctions and a final clearance rate of 51.5%, up from 45.6% the previous week but significantly below the 70.5% clearance rate recorded at the same time last year.
Auction volumes also remain well below last year’s levels.
A clearance rate around this level generally creates a very different negotiating environment from a market where 70% or 80% of properties are selling under the hammer.
Properties are being passed in.
Some vendors are becoming more negotiable.
And buyers may have more opportunity to walk away without immediately losing the property to another buyer.
What I’m Seeing as a Sydney Buyers Agent
After more than 30 years working in Sydney property, one thing remains consistent: the best time to buy is not necessarily when everybody feels confident. TBAS’s website reflects more than 30 years of property experience and over 1,000 auctions attended.
Markets where buyers are cautious can provide opportunities that disappear quickly once confidence returns.
But that does not mean buying simply because prices have fallen.
The quality of the asset remains more important than trying to perfectly time the market.
I’d rather see a client pay a fair price for an excellent property they can hold for many years than buy a compromised property simply because it appears cheap.
So, Is Now a Good Time to Buy Property in Sydney?
For some buyers, yes.
Sydney values have already corrected, buyer competition has reduced in parts of the market and vendors may be more prepared to negotiate than they were when conditions were stronger.
But buyers need to remain disciplined.
Before making an offer, establish:
- What genuinely comparable properties have recently sold for.
- What the property is realistically worth in today’s market.
- Whether there are building, strata, planning or location risks.
- Why the vendor is selling and how motivated they are.
- Whether negotiating before auction is advantageous.
- Your maximum price before negotiations begin.
Don’t buy because somebody says Sydney has reached the bottom.
And don’t avoid buying simply because somebody predicts prices could fall further.
Ask a Better Question
Instead of asking:
“Is now the perfect time to buy?”
Ask:
“Is this the right property, and am I buying it at the right price?”
That is ultimately what matters.
If you’re considering buying in Sydney, TBAS Buyers Agents can independently assess the property, analyse comparable sales, identify risks and help determine the right negotiation or auction strategy before you commit.