Every week, buyers ask me the same question.
“Nick, is now the right time to buy? Or do you think prices are going to keep falling?”
These are understandable questions. Nobody wants to buy a home only to see its value fall further a few months later. My answer, however, often surprises them.
“The truthful answer is: Nobody knows.”
A recent Resolve Political Monitor poll found that 61% of Australians said they would like to see property prices fall. That’s understandable. But wanting prices to fall and successfully buying at the bottom are two very different things.
Nobody can say with certainty whether Sydney property prices have already reached their low point or whether there is still some way to go.
But that uncertainty raises a more important question: What if trying to time the bottom costs you more than buying before it?
Indeed, the decision to wait for “the bottom” can be far riskier and less precise than most buyers assume, particularly in tightly held Inner West and Eastern Suburbs markets.
This article isn’t a prediction about where Sydney property prices are heading. It’s an on-the-ground perspective from buyers’ agents who negotiate in the market every day. Our aim isn’t to forecast the future with certainty, but to help buyers make better decisions in an uncertain market.
What History Tells Us
History shows that turning points in the Sydney housing market only become clear in hindsight, once prices and activity have already moved. For example, nationally, home values recorded a modest decline at the end of 2024, including a softening in Sydney, before stabilising and then resuming growth in early 2025, as expectations of interest rate cuts improved buyer sentiment. That pattern highlights a key reality: by the time confirmation arrives that “the bottom” has occurred, the best buying opportunities in quality suburbs are often already gone.
Independent forecasters are divided on Sydney’s outlook. While most expect the pace of the downturn to moderate, many now forecast relatively flat prices or only modest movements through the remainder of 2026 rather than a strong rebound, with national dwelling price forecasts generally clustered around low single-digit growth or flat outcomes. At the same time, auction clearance rates in Sydney have been volatile, at times dipping below 50 per cent, their weakest levels since the early stages of the pandemic, before recovering to the mid‑50 per cent range more recently. This mix of stabilising prices, patchy sentiment and improving clearances in some weeks is exactly what we see on the ground when markets are attempting to find a floor.
The Problem With Waiting For “The Bottom”
Markets Do Not Ring a Bell at the Bottom
In financial markets, there is a saying: “Nobody rings a bell at the bottom.” The same principle applies to the Sydney property market. There is no announcement that tells you prices have definitively stopped falling; instead, turning points are only visible once several months of data confirm a new trend. By that stage, prime homes in tightly held locations have usually led the recovery.
For a buyer targeting high‑quality family homes in areas like the Inner West or Eastern Suburbs, this lag matters. A‑grade houses in blue‑chip school catchments or near transport nodes tend to sell first and most strongly when sentiment improves, leaving those who waited with fewer options and higher competition.
Certainty Usually Arrives After Prices Have Moved
Most buyers say they want “certainty” before committing to a major purchase. In practice, certainty normally appears only when:
- auction clearance rates have lifted consistently for several months
- price indices are clearly trending upward
- media coverage has turned from pessimistic to cautiously optimistic.
By then, distressed or time‑pressured vendors have largely sold, discounting has reduced and buyers face more bidders at auction. In other words, the very conditions that make buyers feel safer are the same conditions that reduce their negotiating power.
Certainty usually comes at a price.
A Note of Caution from the COVID Period
During the early months of COVID‑19, many commentators predicted heavy and prolonged falls in Sydney property prices. Instead, after a brief period of uncertainty and lower auction activity, the market rebounded sharply, with low interest rates, government stimulus and tight supply driving a substantial upswing.
The point is not that history will repeat in 2026, but that markets can shift direction quickly and unexpectedly.
For buyers who waited in 2020 until it “felt safe”, the result was often a higher entry price and stronger competition. The lesson applies today: timing the absolute trough is extremely difficult, and focusing on value, time horizon and asset quality is usually more effective than trying to be precisely right about the month the market turns.
Why Clearance Rates Matter – and Their Limitations
Auction clearance rates are a useful leading indicator because they reflect real buyer and seller behaviour within a short timeframe. Sustained rises in clearance rates often precede sustained price growth, while sharp falls can flag emerging weakness.
However, one weekend’s result does not constitute a trend. Clearance rates can move around due to changes in listing volumes, public holidays, weather and the mix of stock. As professional buyers’ agents, we therefore focus on rolling results over several weeks, segmented by region and property type, rather than headline numbers alone. We will continue to monitor these indicators closely across the Inner West, Eastern Suburbs and other core Sydney markets in 2026.
For a deeper explanation of how we use auction data in our strategy, you may find our article on interpreting Sydney auction results useful.
A Different Mix of Buyers in 2026
The composition of active buyers in Sydney has shifted compared with earlier in the cycle. Owner‑occupiers, particularly upgraders seeking more space or better school catchments, are again prominent. Many of these households who delayed decisions during the height of the market are now moving to align their housing with long term needs.
Investors are more selective but not absent. Some are reassessing existing portfolios in light of changing tax and regulatory settings, while others are looking to take advantage of improved yields, low vacancy rates and softer entry prices in selected suburbs. Increasingly, we see buyers who frame current conditions as an opportunity to secure quality assets with less competition than at the peak, rather than as a reason to stay on the sidelines indefinitely.
This changing buyer mix has practical implications for home buyers in Sydney. Competing against committed owner‑occupiers often requires a different bidding strategy than competing primarily against yield‑driven investors. Understanding who you are up against, and what matters to them, is part of the strategic advice we provide to clients.
Does This Mean Prices Will Rise?
Nobody can tell you whether Sydney has already reached the bottom of the market and if and when prices are going to start rising.
But history tells us something almost as useful. Buyers who succeed over the long term rarely do so because they perfectly timed the market.
They succeed because they bought the right property, in the right location, at a fair price, when they were financially ready.
The goal isn’t to buy at the bottom. The goal is to buy well.
I don’t ever recall a client calling me six months after buying and saying,
“Nick, I wish we’d waited another few months until the bottom of the market.”
I have, however, spoken to plenty of buyers over the years who waited a year and later said,
“If only we had bought sooner.”
If you wish to explore this in more detail, you can learn about our role as a Sydney buyer’s agent and our tailored services for Inner West and Eastern Suburbs buyers.
