How To Know If Buying Makes Sense In A Falling Market

Australian property prices are falling, but that doesn’t automatically mean waiting will leave you better off.

Cotality’s national Home Value Index fell 0.9% in August 2026, its fifth consecutive monthly decline. National values were 3.6% below their March peak, while most capital-city suburbs recorded falls over winter.

At the same time, borrowing remains expensive. The RBA held the cash rate at 4.35% on 11 August, after lifting it by 0.75 percentage points earlier in 2026.

That creates a trade-off for buyers:

The property could become cheaper while the mortgage becomes more expensive.

So instead of asking, “Has the market bottomed?”, ask these five questions.

1. Would The Mortgage Still Be Comfortable If Rates Rose?

Start with your repayment, not a property-price forecast.

Suppose you’re buying an $800,000 property with an $80,000 contribution and a $720,000 loan over 30 years.

Interest rate	Approx. monthly repayment
6.25%	$4,433
6.50%	$4,551
6.75%	$4,670

A 0.50 percentage-point increase adds about $237 a month.

So ask, “Could I absorb that without relying on overtime, using my emergency savings or cutting essential spending?”

If not, the bigger problem may not be whether the property falls another 2% or 3%. The proposed mortgage may already be too close to your limit.

You can calculate your home loan repayments at different rates before deciding what price feels comfortable.

Important: The maximum a lender will approve and the amount you are comfortable repaying are not necessarily the same.

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2. Would Waiting Actually Leave You Better Off?

It is easy to focus only on the property price.

You might see an $800,000 property and think: “I’ll wait until it falls to $760,000.”

But if rates increase while you’re waiting, part of that saving can disappear through higher repayments.

For the same example, keeping repayments near $4,433 a month would require roughly:

Mortgage rate	Approx. purchase price
6.25%	$800,000
6.50%	$781,000
6.75%	$763,500
7.00%	$746,000

Illustrative only. Assumes an $80,000 cash contribution, 30-year principal-and-interest loan and excludes purchase costs.

So don’t only ask:“How much further could prices fall?”

Ask: “How far would this property need to fall before waiting actually improves my position?”

That is a much more useful number.

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3. Are You Getting A Genuine Discount?

A falling market can give buyers more negotiating power.

But a discount from the asking price isn’t automatically a bargain.

Imagine:

• Original asking price: $900,000
• Reduced asking price: $880,000
• Your offer: $850,000

It looks like you’ve negotiated $50,000 off.

But if comparable properties are selling for around $840,000, the vendor’s original price was never the right benchmark.

Before making an offer, check:

• Recent comparable sales
• How long the property has been listed
• Previous price changes
• Competing properties for sale
• Differences in land, condition, location and layout.

Then decide your walk-away price before negotiating.

A softer market can give buyers one of their strongest advantages: the ability to walk away when the numbers don’t stack up.

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4. Are You Using Lower Prices To Borrow More Or Borrow Better?

There is another benefit to a falling market that is easy to miss.

You don’t have to use every dollar you negotiate off the property to increase your buying budget.

Suppose you expected to pay $800,000 and borrow $720,000.

If you negotiate the property price down to $770,000 and keep the same $80,000 contribution, your loan amount falls to around $690,000.

At 6.25% over 30 years, that reduces repayments by roughly $185 a month.

The savings could instead help you:

• Borrow less
• Keep a larger cash buffer
• Reduce your LVR
• Cover moving, repairs or other purchase costs.

Likewise, just because a lender can give you more borrowing capacity doesn’t mean you should use all of it.

Different lenders can calculate borrowing capacity differently.

The better question is:

Does borrowing more improve the purchase, or am I simply stretching to meet the vendor’s price?

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5. What Are You Actually Waiting For?

If you’re going to wait, give yourself a measurable reason.

Waiting for another price fall?

Set the price at which you would genuinely be ready to buy.

Waiting for lower interest rates?

Calculate what a 0.25% or 0.50% change would actually do to your repayments and borrowing capacity.

Remember that lower rates could also improve the borrowing capacity of other buyers, potentially increasing competition.

Waiting until the market feels safer?

Define what “safer” means. Perhaps you want:

• A larger deposit
• More cash after settlement
• A lower monthly repayment
• Greater job security
• A cheaper property.

Those are useful targets. “I’ll wait and see” isn’t, unless you know what you’re waiting to see.

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So, Should You Buy While Property Prices Are Falling?

Buying now may make sense when:

• The repayment remains comfortable even if rates rise
• The price is supported by comparable sales
• You have money left after settlement
• You expect to keep the property for several years
• Another short-term fall in value would not force you to sell or refinance.

Waiting may make more sense when:

• You’re borrowing at your absolute limit
• A modest increase in repayments would put pressure on your budget
• Buying would use almost all your available cash
• You need prices to recover quickly for the purchase to work.

And if the property works financially but the vendor’s price doesn’t?

Negotiate.

You don’t need to predict the exact bottom of the property market.

You need to know whether this property, at this price, with this mortgage still works if the market moves against you for a while.

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Know Your Numbers Before You Make An Offer

This is where Home Loan Experts can help. Before you negotiate, we can help you work out:

• How much you could borrow
• What the repayments could look like at different rates
• How much cash you may need to complete the purchase
• How much room you would have left after settlement.

Please call us on 1300 889 743 or enquire online and one of our mortgage brokers will get back to you with some options.

This information is general in nature and doesn’t take into account your objectives, financial situation or needs. Calculations are illustrative only. Property values, interest rates and lending policies can change. Consider your circumstances and seek appropriate professional advice before making a property or financial decision.