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There is little sign that Sydney’s housing downturn is slowing, with several major banks predicting house values will continue to plummet in the months ahead but some experts are warning buyers waiting to snap up property at the bottom of the market may struggle to time it perfectly. The downturn follows three consecutive interest rate rises, changes to negative gearing and capital gains tax and continued economic uncertainty that has seen housing values plunge across the capital cities. Realestate.com.au’s latest Home Price Report shows Sydney home prices fell for the sixth consecutive month by 0.3 per cent in August, leaving values 4.9 per cent below their November 2025 peak.
Commonwealth Bank Australia this week warned Sydney home prices could drop a total 13 per cent, peak to trough, echoing similar forecasts from ANZ, which forecast a 14.5 per cent average Sydney fall. Falls of this magnitude would make the current Sydney downturn the largest since 1982-83, ANZ claimed. This also follows National Australia Bank (NAB) recent claims that house price falls are only about “one-third” complete.
“We think we’re about a third of the way through that, both time-wise and also prices,” NAB chief economist Sally Auld told an event last week. While these predictions can work as a guide for buyers, some experts are advising that there is not always a simple road map for those ‘waiting to buy at the bottom’. Major banks are predicting house values to contine to fall “For buyers waiting for the bottom it sounds sensible, but it’s pretty hard to do in practice because you only know the market has bottomed out once the market has started to turn,” LJ Hooker Head of Research Mathew Tiller said.
“When confidence returns the competition can come back in quite quickly, once there are reports that we’re past the bottom market.” Mr Tiller said it was best for buyers to make a purchase on their own personal circumstances. “I wouldn’t make the decision purely around trying to pick the bottom of the market,” he said. “Instead focus on buying well, negotiating carefully and not overextending.
“There’s probably a floor on how far prices can actually fall, population growth is still going strong, unemployment remains low, the rental markets in particular are still very tight and we still have an under supply of homes. “So I don’t think those fundamentals disappear just because prices start to fall.” MORE: Shock data out today makes RBA’s next call LJ Hooker Head of Research Matthew Tiler said buyers waiting for the bottom sounds sensible, but is hard to do in practice PRD chief economist Dr Diaswati (Asti) Mardiasmo echoed that pinpointing the bottom of the market can come with difficulty, particularly as prices vary between suburbs. Ms Mardiasmo added while buyers understandably want to purchase at the lowest price possible, those relying too heavily on forecasts could miss their opportunity.
“We’ve had a lot of people who wait but then also they might have missed out on a particular property or they might have missed out because with a stable interest rate means that there is stability in the market and this is normally when people are starting to move,” she said. “A lot of the time the bank’s predictions and things like that is normally based on averages or medians at a capital city level, and each suburb would have like their own patterns.” According to Ms Mardiasmo, the rebound for prices can also be significantly faster, pointing to the rebound following price softening during Covid. “The speed of the market actually growing is much faster then it falling,” she said.
“It is much faster in recovery than it is to go backwards, because we do have undersupply and we have a higher demand. “The time of that golden key opportunity window is definitely much shorter.” PRD chief economist Dr Diaswati “Asti” Mardiasmo For buyers holding back, further price falls could rely heaving on interest rate decisions in the coming months. Harcourts Sales Associate Barry Nicolaou pointed to the May 12 budget for a timeline of price falls that he expects to continue until around the end of 2027.
“As far as the bottom of the market is concerned, I do believe that if I was a betting man and I was going to buy at the bottom of the market, I’d be looking at next June or July,” he said. “I believe from that, on the 1st of July 2027 when mandatory valuations do come in, when we move from grandfathering to indexation, I believe that after August, September, this time next year, we will see a rise. “But that is also pending on how interest rates do move in the next 12 months.” MORE: New report reveals bleak reality of the Australian dream
Source: realestate.com.au
