Property Crunch – Risk & Opportunity

If you're thinking about selling, it's understandable to feel uncertain. Headlines continue to focus on falling prices, higher interest rates and changing government policies. While these challenges are real, they don't tell the whole story.

A quick summary. Interest rates are up and possibly going higher, tax breaks have been wound back, taxes are increasing and auction clearance rates have collapsed. Prices have already come off. Quite simply, investing in property is no longer as attractive as it was.

The Government won’t say it out loud, but they are very comfortable for prices to fall. And fall they are. Depending on which location, the immediate impact varies. Melbourne’s brief recovery late in 2025 was quickly snuffed out. Prices have begun softening again across much of the market, although entry-level homes continue to be supported by strong first-home buyer demand. So, where to from here and what opportunities are available?

Firstly, prices are still likely to drop further over the balance of the year. For sellers who have already decided to move, pricing realistically from the outset may help avoid lengthy campaigns in a changing market. Buyer demand still exists. Families outgrow their homes; life events don’t wait for perfect markets; interstate migration continues.

Predictions from bank economists on the falls still to come, vary between about 3% to 10%. This will not be uniform and lower priced properties may be relatively unaffected. Demand still exists from First Home Buyers (FHB) accessing the 5% Deposit Scheme.

The Number That Really Matters

If you're selling one property to buy another, the sale price is only half the equation. The real cost is the difference between what you sell for and what you buy for.

In a softer market, your current home may be worth a little less - but so is the home you're hoping to buy. In many cases, the amount you need to upgrade can actually become smaller.

Likewise, FHB’s will be advantaged by the lower prices. The one sector that should consider their timing are those selling for the final time. Depending on their personal circumstances, riding out this current cycle may assist financially.

For most others, shifting focus to the reason for considering moving and recognising it is the changeover price, not the sale price that is most important will help. Markets move in cycles. While today's conditions require a different strategy than last year, opportunities still exist for sellers who understand the current landscape. The key isn't waiting for the 'perfect' market - it's making the right decision for your own circumstances.