You would expect buyers to be paying less in a softer market. In Sydney right now, many are still paying near-peak prices because they are competing in the wrong places, misreading where competition actually exists, and relying on pricing signals that no longer reflect true value.
The reality of a “softer” Sydney market
Over the past month, Sydney dwelling values have eased slightly from their late‑2025 peak, with major data providers reporting small monthly declines or flat growth rather than the strong gains seen earlier. Auction clearance rates have also stepped down, with recent Sydney results sitting as low as 54% last Saturday (according to Domain), compared with closer to 70 per cent a year ago. At the same time, auction volumes have risen and advertised supply has increased in many suburbs, giving buyers more choice and reducing urgency at the margin. In other words, conditions are softer and more negotiable than they were 12–18 months ago but far from weak.
Crucially, this headline softness hides significant variation by price point, dwelling type and location. Entry‑level houses and units in well‑connected suburbs continue to show relatively firm prices and strong buyer demand, supported by constrained listings, tight rental markets, and population growth in New South Wales. Higher‑end stock and certain discretionary segments, by contrast, are seeing longer days on market and more scope for negotiation, especially where vendor expectations remain anchored to last year’s peak.
1. Buyers are competing in the most visible part of the market
Most unrepresented buyers still focus their search almost exclusively on the public marketplace: major portals, high‑profile auction campaigns, and active listing feeds. This visible layer of the market naturally attracts the greatest concentration of buyer attention because every motivated party can see and track the same properties in real time. In a city where advertised stock remains below long‑term averages in many suburbs, that competition can remain intense even as overall growth moderates.
What many purchasers overlook is that an increasing share of genuine opportunity sits outside these crowded channels. Off‑market and pre‑market transactions have become a meaningful component of activity, particularly in established suburbs where owners value privacy or wish to test price quietly. Analyses of off‑market performance indicate that vendors can achieve, on average, several percentage points less with off‑market house sales than on comparable properties fully listed on major portals, highlighting that price discovery can be weaker where competition is lower and campaigns are shorter.
Comprehensive research from PropTrack in 2023 highlighted that on average, off-market properties sell for 4.3% less than on market properties nationally. In Sydney, the difference equates to more than $60,000.
In practice, this means that buyers focusing solely on visible stock are funnelling themselves into the most hotly contested segment. They are turning up at heavily attended opens, bidding at auctions where emotions run high, and making offers on properties that listing agents have already identified as likely to attract multiple parties. Meanwhile, quieter opportunities such as genuine pre‑market introductions, stale listings that have been mis‑positioned, or off‑market negotiations where a vendor is motivated but discreet, receive far fewer enquiries and therefore provide more room to negotiate.
If you’re only looking where everyone else is looking, you are almost guaranteed to overpay.
From our perspective as buyers’ agents, this is where disciplined representation starts to matter. We invest heavily in agent relationships, database work and suburb‑level monitoring so that clients can access stock before it appears publicly or in cases where it never will. When we are negotiating on a property that has had a couple of days of quiet inspections rather than two weeks of public campaign, the entire conversation about price tends to be calmer, evidence‑based and less driven by fear of missing out.
2. Competition has not disappeared – it has become selective
One of the biggest mistakes buyers are making right now is assuming that ‘softer’ means less competition everywhere but the reality on the ground is more nuanced.
Lower‑priced segments, particularly sub $1,500,000 and in suburbs with strong transport links, school catchments and rental demand, remain comparatively resilient. Lower‑priced houses have carried much of the recent growth in Sydney’s modest rebound phases, supported by first‑home buyer incentives and the ongoing affordability squeeze in the rental market. Vacancy rates in Sydney have remained low, which underpins investor interest and supports entry‑level demand. These factors mean that competition for good, sub‑median price stock has remained acute, despite the broader slowdown.
Conversely, higher‑end properties, prestige homes, and dwellings with unique design or location attributes are seeing a different dynamic. With borrowing capacity constrained and price growth having already run hard through 2023–2025, marginal buyers in these brackets are more cautious, and campaign periods can extend as a result. However, when the right property in a tightly held street comes to market, genuine upgraders and cashed‑up downsizers will still compete aggressively, often off the public radar. This is more apparent in very tightly held suburbs in the Inner West such as on the Balmain Peninsula.
The key point is that competition is no longer uniform. There are pockets where buyers are still pushing prices to or beyond previous peaks, while other segments see vendor discounting or quiet withdrawals. Buyers who cannot distinguish between these environments risk overpaying in the wrong pockets: stretching for a compromised property simply because the campaign feels busy, or ignoring superior opportunities because they misinterpret lower enquiry as a sign of weakness rather than of mis‑pricing.
Right now, the risk isn’t that you’ll miss out, it’s that you’ll overpay in the wrong segment.
3. Pricing signals are harder to read than ever
In a rising market, almost every reference point moves in the same direction: comparable sales, price guides, auction clearance rates and buyer depth all trend upwards. In a flatter or mildly softer environment, these signals diverge, and that makes pricing harder to read. Small quarter‑on‑quarter declines in some segments can sit alongside positive annual growth, with median values still close to previous peaks. The result is lag: sales from six months ago may no longer be a reliable upper bound for current value.
At the same time, auction clearance rates can ease while volumes rise, which may mask the true strength or weakness of individual campaigns. A property can pass in at auction yet still transact shortly after at a record price; conversely, a listing that appears quiet online may have already attracted strong off‑market offers. Without a clear understanding of local depth, buyers risk anchoring their expectations either to underquoted guides that do not reflect vendor expectations, or to stale comparables that are no longer appropriate benchmarks. As buyers’ agents, we deal with this by building a data‑rich pricing assessment framework before we commence negotiations. We cross‑reference recent proximate sales, current competing listings, rental evidence for investors, and macro indicators such as lending conditions and auction performance. We then use this to derive an evidence‑based price range for each property, rather than relying on quoted guides or vendor expectations. This prevents clients from over‑anchoring to numbers that do not accord with current market depth.
What we are seeing on the ground in Sydney
On the ground in Sydney, it is clear that this is not one homogenous market. Entry‑level stock – particularly liveable houses and larger units in commutable Inner West, middle‑ring and selected outer‑ring suburbs – remains relatively competitive due to the combination of limited listings, tight rental conditions and ongoing demand from first‑home buyers and investors.
Higher‑end properties, by contrast, tend to be more negotiable. Campaigns can run longer, price expectations can be more elastic, and there is greater variance between vendor aspirations and buyer feedback. In these segments, we are seeing more instances of pre‑auction offers being seriously considered, conditional negotiations, and quiet price adjustments once realistic levels are established. Owners are prepared to negotiate with a committed, well‑qualified buyer in order to avoid the risk of a public campaign that does not meet expectations.
We are also seeing a higher proportion of transactions occurring before or outside public campaigns. Selling off‑market allows vendors to test price without incurring full marketing costs, avoid public price reductions, and maintain privacy. For buyers’ agents in Sydney, a substantial share of transactions now involve properties that are not publicly listed at all. For unrepresented buyers, this activity is effectively invisible, which means they are competing only over the residual pool of stock.
The consequence is that some buyers are still paying close to peak prices for highly visible, well‑marketed properties attracting solid competition, while others, often those with professional representation, are quietly securing quality assets on more favourable terms. The difference is not merely timing, it is strategy, information and access.
Where a professional approach adds value
In a softer, more segmented market, success is less about speed and more about positioning. The buyers who do best are not necessarily the ones who move fastest; they are the ones who see more of the market, interpret pricing correctly, and negotiate in the pockets where leverage actually exists.
The buyers achieving the best outcomes right now are doing three things differently:
- Accessing opportunities before they become competitive. We invest in long‑term relationships with selling agents, developers and private owners across Sydney so that we are routinely briefed on pre‑market and off‑market properties. This access allows us to position clients ahead of the general public and to negotiate in lower‑competition environments where vendors may prioritise certainty and discretion over squeezing out every last dollar.
- Avoiding crowded campaigns. We scrutinise each public listing not just for its intrinsic quality but for the likely depth of competition and the campaign strategy being employed. Where we judge that buyer interest will be excessive relative to value, we advise clients to step aside or to engage only on tightly defined terms. This protects purchasers from emotionally driven bidding that often leads to overpaying at auction.
- Negotiating where genuine leverage exists. Using suburb‑specific data on sales, auction outcomes, days on market and discounting, we identify where conditions favour buyers rather than vendors. Easing auction clearance rates, rising auction volumes, and small monthly declines in values in some segments all point to increased scope for negotiation, provided the buyer understands how to deploy that information. We bring that analytical framework to each negotiation so that our clients are not guided by emotion, but by evidence.
For buyers entering the Sydney market in the next three to six months, the central question is not whether conditions are softer than they were a year ago. The question is whether your approach is aligned with the way this market now behaves. If you search only in the most visible channels and rely on outdated or misleading pricing signals, you are at risk of overpaying even in a softer environment.
If you are currently looking to buy, it is worth asking:
- Are you seeing most properties at the same time as everyone else?
- Are you relying heavily on price guides or recent comparable sales to determine value?
- Are you finding yourself drawn into competitive situations even though the market is “softer”?
If the answer to two or more of these is yes, you’re operating in the part of the market where overpaying is still most likely.
By contrast, if you combine disciplined market analysis, early access to the right properties, and professional negotiation, you can use this phase of the cycle to buy well rather than simply to buy. That is the distinction we focus on every day for our clients.
Right now, overpaying isn’t a function of the market, it’s a function of approach.
If you’re unsure about your next move, it is worth having that conversation before you commit to the wrong property.
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