The Sydney property market is giving buyers more room to negotiate, but weaker lending suggests the downturn may have further to run. At the same time, renters face pressure that falling sale prices alone will not resolve.
This week’s figures point to a market where finance, seller expectations and household budgets are pulling in different directions. Buyers with secure funding may find opportunities, while those relying on increased borrowing power could remain constrained.
Lending falls sharply
The Australian Bureau of Statistics reports that the number of new home loans fell 15% nationally in the September quarter, while their value dropped 15.5% to approximately $81.16 billion. The fall in value was the largest quarterly decline since the series began in 2002.
Investors led the retreat. Their loan numbers fell 30.6%, while the value of investor lending declined 32.3%. First-home buyer loan numbers also dropped 8.6%. Australian Bureau of Statistics
These are lending commitments, rather than interest rates or a direct measure of property prices. Nevertheless, a smaller pool of financed buyers can reduce competition and make ambitious vendor expectations harder to sustain.
The ABS points to factors beyond borrowing costs potentially influencing investors, including tax changes and expectations of lower prices. That does not establish how much of the decline any single factor caused. Australian Bureau of Statistics
A market bottom remains uncertain
Analysis by Money.com.au and Primara Research, reported in The Daily Telegraph, suggests the national market could reach its low around the September quarter of 2027.
The reasoning draws on previous downturns: three consecutive quarters of falling lending activity have historically preceded a price bottom, with sellers taking time to adjust to weaker demand.
That is a forecast based on historical patterns, rather than a reliable date to put in the diary. Interest rates, employment, credit availability and housing supply could change the outcome. A national turning point would also not mean every Sydney suburb turns at once.
For buyers, the practical question is whether a particular property represents sound value at a price they can comfortably afford. Waiting for a headline to announce the bottom offers little certainty.
NSW sellers negotiate
REBAA analysis of Cotality data, reported by Livewire Markets, identifies several NSW locations where sellers accepted substantial discounts from asking prices in the three months to September:
| NSW location | Median vendor discount |
|---|---|
| Culburra Beach | 14.1% |
| Lalor Park | 10.7% |
| Killara | 9.9% |
These are among the largest asking-price discounts in the published ranking. They are not equivalent falls in market value, nor do they mean every property can be bought that far below its guide. Culburra Beach is on the South Coast; Lalor Park and Killara provide Sydney examples across different price points. www.livewiremarkets.com
An inflated starting price can produce a large discount without delivering a bargain. Recent comparable sales, the property’s condition and the vendor’s circumstances remain more useful than applying a suburb-wide percentage to an individual home.
Renters face growing pressure
The softer sales market is providing little immediate relief for tenants. Primara Research survey findings reported by realestate.com.au show almost half of renters had missed or paid a bill late in the previous month, compared with 33% of mortgage holders. realestate.com.au
Those are survey findings, rather than a count of all Australian households. Even so, they highlight the difficulty of building a deposit while meeting rent and everyday expenses.
For Sydney buyers, the message is to have finance checked before negotiating and assess each property on its merits. Sellers should anchor expectations to current sales evidence. Landlords need to weigh sustainable rents and reliable occupancy alongside rising ownership costs.
More negotiating room is useful. Turning it into a good purchase still requires careful due diligence and a realistic budget.
Real Estate Newsletter
This article is a curated summary of various news stories from the past week, offering insights and updates on the real estate market. 12 November 2026
Rodney McLoughlin is a trusted real estate professional with deep insights into the Australian property market. For personalised advice and market expertise, reach out to Rodney today.