The property market is giving buyers and sellers plenty of conflicting signals.
Values are declining, borrowing capacity remains under pressure and mortgage stress is increasing. At the same time, auction activity has improved from its weakest levels and well-positioned homes are still attracting competition.
Rather than asking whether we’ve reached the lowest point, a more useful question is: what would a genuine change in direction actually look like?
Spring could separate the noise from the trend
One of the most important tests will be the increase in properties coming to market during spring.
Sydney’s auction clearance rate improved from 46.2% in June to 52.8% in August, while Melbourne moved from 52.2% to 59.6%.
That’s encouraging, but it doesn’t signal a recovery on its own.
If more homes are listed this spring and buyer demand strengthens enough to absorb that supply, it could suggest the market is finding firmer ground. If stock builds faster than demand, sellers may face further pressure on price.
Interest rates remain the key variable
The value of Australian residential property fell by $34.1 billion during the June quarter, while almost 1.8 million mortgage holders are now considered at risk of mortgage stress.
Further rate increases would make borrowing more expensive and could keep buyers cautious.
The opposite could happen when expectations finally shift towards lower rates. Buyers who have been waiting on the sidelines may start returning before an actual rate cut arrives.
That’s why turning points can be difficult to spot in real time.
Cheaper doesn’t necessarily mean more affordable
There’s another unusual feature of this downturn.
Property values have fallen, yet housing affordability has deteriorated to record levels.
A median-income household earning $125,000 can currently afford only around 12% of homes sold nationally. Higher financing costs are cancelling out much of the benefit buyers would normally receive from falling prices.
It shows why price alone doesn’t determine whether it’s a good time to buy.
What should buyers and sellers watch?
Instead of focusing on one headline number, Rodney McLoughlin suggests looking at the combination of auction competition, listing volumes, borrowing conditions and buyer confidence.
The strongest opportunities can emerge before broader market statistics show a recovery.
For buyers, that means concentrating on property quality and long-term value rather than trying to perfectly time the cycle. For sellers, realistic pricing remains critical while buyers still have considerable choice and negotiating power.
The eventual turning point probably won’t arrive with a dramatic announcement.
It will appear gradually — and by the time everyone recognises it, the market may already have moved.
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. 11 September 2026
Rodney McLoughlin is a trusted real estate professional with deep insights into the Australian property market. For personalized advice and market expertise, reach out to Rodney today.