Calmer Conditions, Uneven Markets

**Market Intelligence Monday — 20 July 2026** Australia''s property market has moved away from the urgency that characterised much of the recent growth cycle. Fewer buyers are attending open homes, vendors are becoming less willing to test the auction market, and negotiating margins are beginning to widen. In Sydney and Melbourne, price declines have spread across most suburbs. But this is not a uniform national downturn. Perth continues to record strong growth, Brisbane and Adelaide have so far proven more resilient, and many affordable regional markets are still attracting competition. Meanwhile, rental vacancies remain exceptionally low across every capital city. The opportunity for buyers is therefore not simply that "prices are falling". It is that calmer conditions are creating more time to investigate, compare and negotiate — provided buyers understand which markets are genuinely weakening and which remain constrained by limited supply. ## The auction market is revealing weaker buyer demand [Cotality''s July Housing Chart Pack](https://www.cotality.com/au/insights/articles/monthly-housing-chart-pack-july-2026) provides one of the clearest indications that market conditions have changed. The proportion of new listings being taken to auction fell from almost 45% in November 2025 to just over 30% in June 2026. While auction activity normally slows during winter, Cotality says the reduction in sales volumes extends beyond the usual seasonal pattern and reflects fewer buyers in the market. Vendors are increasingly selling before auction, withdrawing properties or choosing private treaty campaigns rather than risking an unsuccessful public auction. The median vendor discount across the combined capitals has also increased to 3.6%, suggesting buyers are gaining some negotiating leverage. [Domain reported a similar change in buyer behaviour](https://www.domain.com.au/news/fomo-is-gone-australias-housing-market-remains-in-slowdown-1535434/). Average attendance fell to just 2.1 people per open home over the four weeks to 11 July, compared with 3.6 a year earlier. These measures do not mean good properties have suddenly become easy to buy. Scarce, well-located homes can still attract strong competition. They do, however, indicate that buyers are less likely to be punished for taking the time to complete proper due diligence. ## Sydney and Melbourne are leading the correction Cotality recorded a 1.2% fall in Sydney dwelling values during June, taking the market 3.7% below its January 2026 peak. Melbourne values declined 1.0% during the month and remained 4.0% below their March 2022 high. [PropTrack''s suburb-level data](https://www.realestate.com.au/news/sydney-and-melbourne-house-prices-collapse-as-new-report-reveals-dire-outlook/) shows how broad those declines have become. House values fell over the June quarter in 91% of Sydney suburbs and 93% of Melbourne suburbs. By comparison, only 22% of Brisbane suburbs recorded a decline. Fewer than 30% of Adelaide suburbs fell, while Townsville recorded declines in only two of its 66 measured suburbs. This divergence matters. A national headline suggesting that the property market is either "falling" or "holding firm" is now of limited use. Buyers in Sydney and Melbourne are operating in materially different conditions from buyers pursuing affordable houses in parts of Queensland, Western Australia or regional Australia. Even within the same city, the market can split sharply by price point and property type. More affordable homes may continue attracting competition while prestige properties, highly leveraged investor stock or dwellings with significant holding costs weaken first. ## Brisbane is gaining supply, but has not followed Sydney and Melbourne Brisbane deserves particular attention because its market is beginning to show some early signs of rebalancing without yet experiencing the breadth of decline seen in the two largest capitals. [SQM Research reported](https://www.adviservoice.com.au/2026/07/national-property-listings-ease-in-june-while-annual-supply-continues-to-strengthen/) that Brisbane listings increased by 1.2% in June and were 8.0% higher than a year earlier. Combined asking prices declined 0.8% over the month but remained 12.8% higher annually. This suggests buyers may be gaining more choice, but it would be premature to describe Brisbane as a broadly weak market. After several years of exceptional price growth, affordability is becoming a greater constraint. Some prestige and investor-driven segments may be vulnerable to weaker demand, while scarce houses in established owner-occupier locations can remain competitive. The distinction between "more stock" and "oversupply" is important. An increase in listings can improve buying conditions without removing the longer-term scarcity of well-located land. ## Rental conditions remain exceptionally tight The cooling sales market has not been matched by a comparable deterioration in rental demand. [SQM Research reported](https://sqmresearch.com.au/uploads/14-07-26-National-Vacancy-Rates-June-2026-2036.pdf) that the national residential vacancy rate increased from 1.2% to 1.3% in June. Despite that modest easing, every capital city remained below 2%. Brisbane''s vacancy rate remained at 0.9%, Perth tightened to 0.6%, Adelaide remained at 0.7% and Darwin recorded just 0.3%. National asking rents were 8.1% higher than a year earlier. This creates an unusual but potentially constructive environment for investors. Buyer demand is weakening because interest rates, borrowing capacity and uncertainty are affecting purchasers. Tenant demand, however, remains supported by a persistent shortage of available rental accommodation. Where prices soften while rents continue to rise, gross rental yields can gradually improve. That does not make every property attractive, but it may create better entry conditions for buyers who can identify markets with sustainable employment, population demand and constrained future supply. ## What this means for property investors The clearest change is that buyers should no longer feel compelled to make decisions based on fear of missing out. In a rapidly rising market, purchasers often accept compromised properties, shorten due diligence or increase their price simply to secure something. In the current environment, there is greater scope to reject unsuitable assets and wait for a property that genuinely fits the strategy. That does not mean waiting indefinitely for the market to reach a clearly identifiable bottom. Market troughs are generally visible only in hindsight. Conditions can also recover at different times across different cities, suburbs and price brackets. A more practical response is to use the changing market to: - negotiate more firmly where buyer competition has reduced; - conduct thorough legal, building and planning due diligence; - compare the property against a larger pool of alternatives; - stress-test cash flow at current interest rates; - favour assets with broad owner-occupier appeal; and - avoid relying on recent capital growth continuing at the same pace. ## The Firm Foundations view A slower market does not remove the need for asset selection. It increases its importance. Properties dependent on rapid price growth or a narrow pool of investor buyers may become more exposed as sentiment weakens. By contrast, scarce properties with strong rental demand and broad future resale appeal may continue to perform even when the wider market becomes less forgiving. The current environment is not necessarily a signal to stop buying. It is a signal to stop rushing. For disciplined investors, reduced urgency and greater negotiating room can create opportunity. But those opportunities will be found by understanding the individual market and property — not by assuming that every part of Australia is moving in the same direction. --- ### Sources - Cotality — [Monthly Housing Chart Pack, July 2026](https://www.cotality.com/au/insights/articles/monthly-housing-chart-pack-july-2026) - Domain — ["FOMO is gone": Australia''s housing market remains in slowdown](https://www.domain.com.au/news/fomo-is-gone-australias-housing-market-remains-in-slowdown-1535434/) - PropTrack / realestate.com.au — [Sydney and Melbourne house prices collapse as new report reveals dire outlook](https://www.realestate.com.au/news/sydney-and-melbourne-house-prices-collapse-as-new-report-reveals-dire-outlook/) - SQM Research — [National Residential Vacancy Rates, June 2026 (PDF)](https://sqmresearch.com.au/uploads/14-07-26-National-Vacancy-Rates-June-2026-2036.pdf) - SQM Research (via AdviserVoice) — [National property listings ease in June while annual supply continues to strengthen](https://www.adviservoice.com.au/2026/07/national-property-listings-ease-in-june-while-annual-supply-continues-to-strengthen/)