The housing market is changing. For prepared buyers, that could create an opportunity. After several years of intense competition, the Australian housing market is showing clearer signs of weakness.
Auction clearance rates have fallen sharply. Cotality reported a combined-capital clearance rate of just 49.5% for the week ending 30 August, compared with 69.3% at the same time last year.
Almost one in three auctions passed in, while auction volumes were also more than 30% below the same week in 2025.
The broader market is softening too. National dwelling values fell for the fifth consecutive month in August, with values down 0.9% over the month.
And there is another source of uncertainty: interest rates.
The Reserve Bank of Australia held the cash rate at 4.35% in August, but indicated that another increase remains possible if inflation does not moderate sufficiently.
For buyers, that creates an unusual combination: less competition, more uncertainty and potentially greater negotiating power.
A Softer Market Changes the Buying Game
When the market is rising rapidly, buyers often have to compete on speed.
Multiple offers, crowded inspections and competitive auctions can push buyers into making decisions quickly—or paying more than they originally intended.
A softer market works differently.
When fewer buyers compete for each property, preparation becomes more valuable. Buyers who understand their borrowing capacity, know their limits and have finance ready can negotiate from a much stronger position.
The goal isn't simply to buy a cheaper property.
It is to buy well.
Pass-Ins Can Create Negotiating Opportunities
A property passing in at auction doesn't necessarily mean the vendor won't sell.
It can create an opportunity for a buyer to negotiate directly with the vendor, without competing against a room full of bidders.
Cotality's latest figures show just how common this is becoming, with 448 properties passing in across the combined capitals in the week ending 30 August.
That can change the conversation.
Instead of asking, "How much do I need to pay to beat the other buyers?", you can ask:
"What price and conditions make this transaction work for both sides?"
That difference can be significant.
What Might Negotiating Power Look Like?
A changing market can give buyers opportunities that were difficult to secure when competition was intense.
For example, a buyer may be able to:
- Negotiate a lower purchase price
- Negotiate a longer settlement period
- Include appropriate finance conditions
- Undertake building and pest inspections
- Negotiate inclusions or other terms
- Take more time to complete due diligence
- Walk away from a property that doesn't represent good value.
None of these outcomes is guaranteed. But when competition falls, vendors may become more open to negotiation.
The Advantage Goes to Buyers Who Are Ready
A softer market doesn't remove the need for good financial planning.
In fact, it makes preparation even more important.
Before you start negotiating, you should understand:
- How much you can comfortably borrow?
- What your repayments would look like if rates rise?
- How much cash you need for the purchase and associated costs?
- Whether your existing property needs to be sold first?
- What type of property suits your longer-term plans?
- Where you are prepared to compromise—and where you're not?
A pre-approval can also give you greater confidence when you find the right property.
But remember: borrowing capacity is not the same as affordability. Your finance strategy should reflect what you are comfortable repaying, not simply the maximum a lender may offer.
Don't Try to Time the Bottom
One of the biggest mistakes buyers can make in a changing market is waiting for the "perfect" moment.
Nobody knows exactly where the market will bottom.
Prices could fall further. Interest rates could rise again. Buyer competition could increase. Or conditions could stabilise sooner than expected.
Instead of trying to predict the market, focus on the conditions you can control.
If you find the right property at a price you can afford, with finance structured appropriately and adequate due diligence completed, you may not need to wait for the market to become perfectly predictable.
Buy Strategically, Not Emotionally
A changing market rewards discipline.
You don't need to chase every property. You don't need to compete at every auction. And you don't need to stretch your budget simply because another buyer is prepared to pay more.
You can take your time, assess the property properly and negotiate from a position of preparation.
That is the real advantage of a softer market.
How Dream Catchers Lending Can Help
At Dream Catchers Lending, we help buyers understand their financial position before they enter the market.
We can help you:
- Assess your borrowing and affordability scenarios
- Structure your finance appropriately
- Prepare for auctions and negotiations
- Understand the impact of changing interest rates
- Navigate buying and selling at the same time
- Develop a finance strategy that supports your longer-term goals
This can be particularly valuable if you're upgrading, restructuring your finances or navigating a major life transition.
The Market May Be Changing... Your Strategy Should Too
The housing market doesn't need to be booming for buyers to find opportunities.
In fact, a market with less competition can reward buyers who are prepared, patient and financially disciplined.
The opportunity isn't necessarily in waiting for prices to fall further. It may be in being ready to act when the right property—and the right negotiation—comes along.
If you're pre-approved or thinking about buying, now is a good time to review your finance strategy and make sure it still reflects the market you're actually buying in.
Dream Catchers Lending can help you prepare, negotiate and buy with confidence.
Dream Catchers Lending is an MFAA-accredited member and a Certified Divorce Specialist. Feel free to book an obligation-free virtual appointment or leave us your details and we'll be in touch.