What a Falling Market Actually Means if You Own Property
One of Sydney's most experienced auctioneers, a man who has been doing it for 30 years, said something recently that stuck with me. He has lived through recessions, the global financial crisis and covid. And he said this is the weakest auction market he has ever seen. Two weekends in a row, he had properties go under the hammer with zero registered bidders. Not one person put their hand up. That tells you how quiet things have gone.
Prices are falling in most parts of the country right now, and when owners hear that, a lot of them start to worry. That is fair. Nobody likes seeing the value of something they own go down. But a falling market is not the same as a bad market. And for most people who already own, it changes far less than the headlines make you think. Let me talk about it simply.
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What is actually happening
Home values across the country fell 0.7 per cent in July. That was the biggest monthly drop since December 2022.
For a while this was mostly a Sydney and Melbourne story. Not anymore. Prices are now falling in Brisbane, Adelaide and Canberra too, and even in some regional areas. Perth is about the only market still holding roughly flat.
Sydney is now more than 5 per cent below where it peaked late last year.
But here is a number that tells you more than the price falls do. Back in November, close to 45 per cent of homes for sale were going to auction. By the middle of this year that had dropped to just over 30 per cent. Sellers are quietly walking away from auctions altogether, because they do not want to stand there in front of a silent room. That is what a soft market actually looks like on the ground.
Why it is happening
A few things are pushing at once.
Interest rates went up three times earlier this year. That means people cannot borrow as much, so they cannot pay as much, so prices come down.
Cost of living is still biting. When everything is more expensive, people are nervous about a big purchase.
And the tax changes from the budget have made some investors pull back. Fewer investors buying takes demand out of the market.
Put it together and you get less buying, which means softer prices.
The one thing to understand above everything else
A fall in value only becomes a real loss if you sell.
If you own a property and you are not selling, the price going down on paper does not take a dollar out of your pocket. Your home is still your home. Your rental is still earning rent. Nothing has actually changed in your day to day.
Prices move in cycles. They go up for a few years, they flatten, sometimes they dip, then they go up again. Anyone who has owned property for a long time has been through this before. The people who get hurt are almost always the ones forced to sell at the wrong time. Not the ones who can sit and wait.
The question that matters is not how far prices have fallen. It is whether you have to sell right now. And most people do not.
If you own the home you live in
Honestly, this barely changes anything for you.
The value might be down a bit on paper. But you still have the same house, the same repayments, and the same roof over your head. In a few years this dip will most likely be a distant memory.
And here is something most people never think about. A falling market can actually make upgrading easier.
Say you own a home worth 800,000 and you want to move up to one worth 1.2 million. In a downturn, the more expensive home usually drops more in dollar terms, because bigger price tags fall harder. So your home might come down 40,000, but the one you are chasing comes down 70,000 or 80,000. The gap you have to cover gets smaller. You are trading up at a discount.
Most people think a falling market is a bad time to move. For an upgrader, it is often the opposite.
If you own an investment property
The day to day picture is holding up well, even with prices soft.
Rents are still high and still rising. There are not enough rentals to go around, so good properties are not sitting empty. The rent coming in has not fallen just because the number on paper has.
The value being down only matters if you have to sell, or if you were counting on pulling equity out very soon. If you can hold, you ride the cycle like every other time.
The one thing to watch is whether you can comfortably cover your repayments, because rates are higher than they were. If yes, a soft patch in prices is not something to panic about.
Why this can actually be your moment
If you already own and you are thinking about buying again, these are good conditions, not bad ones.
There is more to choose from. Listings are up on a year ago, and homes are sitting longer because fewer people are buying.
Sellers are far more willing to negotiate. When a home has been on the market a while, the person selling it gets realistic about the price.
And the competition has thinned right out. Remember that auctioneer with no bidders. That is not bad news if you are the buyer. That is you walking in with room to move and nobody pushing the price up against you.
The boom everybody enjoys at the top is actually the hardest time to buy well. A quiet market like this one is where prepared buyers do their best work.
What I would focus on
If I was speaking with someone who owns property today, I would keep it to three questions.
- Do you actually need to sell right now. If not, the paper value is just noise for the moment.
- Can you comfortably cover your repayments. If yes, you are in a fine spot to wait this out.
- And is the property itself still a good one, in an area people want to live in. Because that is what carries you through every cycle.
Get those three right and a falling market is something you sit through, not something you fear.
Final word
Yes, prices are falling in most of the country. That is real, and it has spread wider than it was.
But if you own and you do not have to sell, very little has actually changed for you. Your home is still your home. Your rental still earns rent. And prices move in cycles, the way they always have.
Do not panic over a number on paper. Make sure you can hold comfortably. And if you are in a position to buy, a quiet market with empty auction rooms might be the best chance you get for a while.
Because the people who do well in property are almost never the ones reacting to a bad headline. They are the ones who stay calm, hold on, and let the cycle do what it always does.
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