Buying property during a falling market can feel risky. If prices are already declining, buyers may wonder whether purchasing now means paying too much for an asset that could become cheaper in the months ahead.

However, a property market correction can also create opportunities for buyers who are financially prepared and willing to do their research.

In The CEO Breakdown episode, Latitude Accountants’ John Saade discussed how falling property prices can give buyers greater negotiating power. He highlighted a Latitude client who purchased a roughly 550-square-metre block in Bankstown for around $250,000 less than the asking price after the market had already adjusted.

The example demonstrates an important principle: a falling market does not automatically mean you should wait. It means you need to become more selective.

So, how can you tell whether you have genuinely found a good deal?

Why Falling Property Markets Can Create Opportunities

During a strong property market, buyers can face significant competition. Multiple interested parties may compete for the same property; auctions can attract numerous bidders, and sellers may have little reason to negotiate.

A correction can change that dynamic.

When buyer confidence weakens and properties take longer to sell, sellers may become more willing to negotiate on price.

Current market data reflects this shift. PropTrack reported that Australian home prices fell for the fifth consecutive month in August 2026, with national prices 2.7% below their March 2026 peak. Combined capital-city prices were 3.6% below their peak.

That does not mean every property is suddenly cheap.

Instead, it can mean buyers have more opportunities to investigate properties carefully and negotiate rather than simply competing against other buyers.

What Makes a Property a Good Deal?

A discount alone does not make a property a good investment.

For example, a property listed for $1 million that is reduced to $900,000 may appear attractive. But if comparable properties are selling for $800,000, the buyer may still be paying too much.

A genuinely good deal should be assessed against the property’s fundamentals, market value and the buyer’s financial position.

Consider the following factors.

1. Compare the Property With Recent Sales

One of the most important steps is researching comparable properties that have recently sold.

Look for properties with similar:

• Location
• Land size
• Number of bedrooms and bathrooms
• Property type
• Condition
• Parking
• Age
• Features and improvements

Recent comparable sales can provide a more realistic indication of what buyers are currently willing to pay.

2. Don’t Rely Only on the Asking Price

An asking price is not necessarily the property’s market value.

In a falling market, sellers may initially list a property based on what they believe it was worth previously.

The fact that a seller has reduced the asking price does not automatically mean the property is now under market value.

Instead, ask:

What are similar properties actually selling for today?

That distinction can prevent buyers from confusing a large discount with genuine value.

Look Beyond the Headline Property Data

Australia does not have one single property market.

Conditions can vary substantially between cities, suburbs and individual properties.

Recent PropTrack data shows the divergence between markets. In August 2026, national prices fell 0.2%, while regional prices were unchanged and remained 6.6% higher than a year earlier. Sydney and Melbourne experienced more significant corrections than many other areas.

This means a headline such as “Australian property prices are falling” is not enough information to decide whether a particular property is a good buy.

Assess the Local Market

Before making an offer, investigate:

• Local property sales
• Days on market
• Number of competing listings
• Auction clearance conditions
• Rental demand
• Vacancy rates
• Planned infrastructure
• Local employment
• Population trends
• Supply of similar properties

The more specific the research, the better your understanding of the opportunity.

Understand Why the Seller Is Selling

In a softer market, understanding the seller’s circumstances can help with negotiations.

A seller may be:

• Moving interstate
• Upsizing or downsizing
• Settling another property
• Facing financial pressure
• Selling an investment
• Relocating for work
• Simply ready to move on

You do not need to know every private detail about a seller, but understanding the circumstances surrounding the sale can sometimes help you determine how flexible the negotiation may be.

A property that has been sitting on the market for an extended period may provide more negotiating opportunity than a newly listed property attracting significant interest.

Take Advantage of Greater Negotiating Power

One of the biggest potential advantages of buying during a correction is the ability to negotiate.

When competition is lower, buyers may have more leverage to negotiate:

• Purchase price
• Settlement conditions
• Inclusions
• Deposit arrangements
• Inspection conditions
• Other contract terms

However, negotiation should still be based on evidence.

Instead of simply making an extremely low offer, support your position with comparable sales and the property’s condition.

This creates a stronger argument for the price you are prepared to pay.

Consider the Impact of Interest Rates

Finding a discounted property is only useful if you can comfortably afford it.

Interest rates can have a significant effect on borrowing capacity and mortgage repayments. PropTrack has identified the cumulative impact of higher interest rates as an important factor weighing on housing demand and borrowing capacity.

Before buying, consider what would happen if:

• Interest rates remained higher for longer
• Mortgage repayments increased
• Your income temporarily decreased
• The property remained vacant
• Unexpected repairs were required
• Property values fell further

A property that looks affordable based on today’s numbers may become much more difficult to manage if your financial circumstances change.

Calculate the Full Cost of Buying

The purchase price is only one part of the cost.

Depending on your circumstances and the property, you may also need to budget for:

• Stamp duty
• Conveyancing and legal costs
• Building and pest inspections
• Loan costs
• Insurance
• Council rates
• Maintenance
• Repairs
• Property management fees
• Land tax where applicable

For investors, rental income should also be assessed realistically rather than assuming the property will always remain occupied.

A good deal should work based on the total cost of ownership, not just the negotiated purchase price.

Think About Your Long-Term Strategy

Property is generally a long-term financial commitment.

A buyer should consider whether the property fits their broader objectives rather than focusing exclusively on whether they can secure a short-term discount.

Ask yourself:

• Am I buying a home or an investment?
• How long do I expect to hold the property?
• Does the location suit my long-term plans?
• Can I comfortably manage the debt?
• Does the property have strong underlying demand?
• Does it fit my broader financial strategy?

A property that makes sense over the long term can remain attractive even if prices experience additional short-term volatility.

Don’t Try to Predict the Exact Bottom

One of the biggest mistakes buyers can make during a correction is waiting indefinitely for the perfect entry point.

Nobody can know with certainty when the market has reached its lowest point.

If you wait for another 5% or 10% decline, prices could fall further — but they could also stabilise before reaching that level.

The better question is not:

“Is this the absolute bottom?”

Instead, ask:

“Does this property represent good value at today’s price, and can I comfortably afford it?”

If the answer is yes, a buyer may have a stronger reason to proceed than someone simply trying to time the market.

Why Professional Advice Can Help

Buying property can involve significant financial, taxation and structural considerations.

An accountant can help you understand how the purchase may interact with your broader financial circumstances, particularly if you are purchasing an investment property or acquiring property through a business or investment structure.

Professional advice may help you consider:

• Cash flow
• Tax implications
• Ownership structures
• Investment strategy
• Existing debt
• Borrowing considerations
• Potential ongoing costs
• Long-term financial objectives

The goal is not to predict exactly where the property market will go next.

It is to make sure the purchase makes sense for your numbers.

Final Thoughts: A Discount Is Not Always a Deal

A falling property market can create opportunities, but buyers need to distinguish between a discounted property and a genuinely good-value property.

John Saade’s Bankstown example demonstrates how a buyer can potentially benefit from weaker market conditions when they have done their research and are prepared to negotiate.

But the most important lesson is that buyers should not purchase simply because a property is cheaper than it was previously.

Instead, look at recent comparable sales, local market conditions, the property’s fundamentals, the total cost of ownership, and your ability to comfortably manage the debt.

A good deal is not necessarily the property with the biggest discount.

It is the property that represents appropriate value and makes financial sense for your circumstances.

Frequently Asked Questions About Buying Property in a Falling Market

Is buying property during a falling market a good idea?

It can be, particularly for financially prepared buyers who can identify properties offering genuine value and negotiate effectively. However, buyers should also be prepared for the possibility of further price declines.

How do I know if a discounted property is actually a good deal?

Compare the property with recent sales of similar properties in the same area. Consider its location, condition, land size, features and current market demand rather than relying solely on the seller’s discount.

Should I wait until property prices stop falling?

There is no reliable way to identify the exact bottom of a property market. If a property is fairly priced and fits your financial circumstances and long-term strategy, waiting for a specific percentage decline may not necessarily be the best approach.

Can I negotiate more when property prices are falling?

Potentially. Reduced buyer competition and longer selling periods can give buyers greater negotiating power. However, offers should still be based on evidence such as comparable sales and the property’s condition.

What should I consider before buying an investment property?

Consider the purchase price, mortgage repayments, rental income, ongoing expenses, tax implications, ownership structure and your ability to manage the investment if market conditions become more difficult.

Should I speak to an accountant before buying property?

Yes. An accountant can help you understand the potential tax, cash-flow and structural considerations of a property purchase and how it may fit into your broader financial position.

Speak to Latitude Accountants

Considering buying property while the Australian market is going through a correction?

Latitude Accountants can help Australian individuals and business owners understand the accounting, taxation, cash-flow and structural considerations associated with major financial decisions.

Book a free consultation with Latitude Accountants to discuss your circumstances before making your next property or investment decision.

📍 Sydney Olympic Park | Marrickville | Melbourne | Loxton
📞 1300 706 597
📧 info@latitudeaccountants.com.au

Disclaimer

This article provides general information only and does not constitute financial, investment, taxation or legal advice. Property markets and individual circumstances vary. You should obtain professional advice appropriate to your circumstances before making property or investment decisions.