Is It Finally a Buyer’s Market? Five Signals Say Yes, and Australians Overseas Hold the Strongest Hand (2026)

Is It Finally a Buyer’s Market? Five Signals Say Yes, and Australians Overseas Hold the Strongest Hand (2026)

The five signals, in one place

Any one of these could be noise. Together they are a direction:

• Demand, measured by a bank: Westpac reported mortgage applications down 20 per cent since the May budget, and forecast investor housing credit growth to roughly halve, 9.1 per cent this year to 4.5 in 2027, as reported by Reuters on 10 August. The market’s biggest bidders are stepping back, in a bank’s own numbers. Three days later the biggest lender of all made it two: CBA, writer of roughly a quarter of the nation’s home loans, reported applications down 15 per cent since the May budget, investor applications down 28 per cent, and owner-occupiers down 9 per cent at its full-year results. Its chief executive added that volumes have stabilised in recent weeks, a reminder that windows like this one do not stay open on a schedule.
• Auctions: clearance rates have sat below 50 per cent since late May. Most auctions now end in a negotiation, not a hammer, and our auction guide covers how to use that room.
• Prices: the national index fell 0.7 per cent in July, the sharpest month since December 2022, and the falls are concentrated where competition used to be fiercest: upper-quartile values are down 3.2 per cent in three months.
• Choice: capital city listings are running 5.7 per cent above the five-year average. More stock, fewer bidders, longer decisions.
• Policy: the negative gearing split has thinned established-market investor demand deliberately, and the full history of what falls like this did next is in our downturn analysis.

And a sixth arrived this afternoon: the RBA held at 4.35 per cent, exactly as all 37 economists Reuters surveyed expected. No rate relief is riding to the rescue, which cuts both ways: repayments are not falling on their own, and nor is a rate-cut frenzy about to reignite bidding competition. The window stays open, and it stays a preparation game. Our decision-day coverage has the detail.

What a buyer’s market actually changes

Strip the phrase down to what it buys you, because it is not “everything is cheap”. Quality stock, priced honestly, still sells. What has changed is the terms of trade:

• Negotiation is back. Passed-in auctions, price guides that move, vendors who counter instead of collecting offers.
• Conditions are back. Subject to finance and inspection clauses that were laughed out of the room in 2021 are being accepted again, which shifts risk off your deposit.
• Time is back. Second inspections, building reports read properly, decisions made in daylight.
• The fear premium is gone. Nobody is paying an extra $50,000 because thirty people attended the open.

Who it favours onshore

Three onshore groups are holding better cards than a year ago:

• Upgraders, most of all. The end you sell is holding while the end you buy is falling: the arithmetic is worked through, dollar by dollar, in our changeover piece.
• Yield-focused investors. Record rents, softer prices, and 20 per cent fewer competing applications. The quarantine rules make the maths stricter, and our investment guide and deductions map keep it honest.
• Prepared first home buyers. The affordable tier is holding firmest, so the discount is smaller, but the competition is thinner and the conditions protection is real. The full scheme map is in our first home buyer guide.

The expat window, and the other offshore queues

Now the part of the story most coverage skips: a meaningful share of the money watching this market sits offshore, and the rules sort it into three very different queues, with Australians abroad at the front.

Start with the strongest hand at the table: Australians living overseas. Citizens and permanent residents abroad are not foreign persons: no FIRB approval, no purchase ban, no surcharge regime aimed at them, full access to established homes while every actual foreign buyer is locked out of them until 2029. Now line that up against the five signals: the premium suburbs expats come back for are precisely the segment falling fastest, 3.2 per cent in three months, auctions there are passing in, and the bidders who used to outgun a Singapore salary have thinned by a fifth on Westpac’s own count. An expat with pre-approval can negotiate a Melbourne pass-in from a Dubai desk on equal terms with anyone in the room.

And the lending, long the hard part, has quietly moved the expat’s way. As at August 2026, one major-bank-backed lender accepts foreign overtime, allowances, commission and bonuses in servicing, runs a thirteen-currency preferred list at 80 per cent of net income, assesses Gulf salaries at their actual local tax rates, zero for UAE and Saudi earners, and lends to 80 per cent LVR for expat investors on preferred currencies. Stack that against the recovering dollar eroding the value of waiting, worked through in our buy-back window piece, and the case for acting this cycle rather than admiring it is arithmetic, not salesmanship. The full mechanics, shading, currency tiers and documents, live in our expat lending guide.

Queue two: temporary residents onshore. Several visa subclasses can be considered as sole borrowers at up to 70 per cent LVR for owner-occupied purchases, rising to the standard 80 when co-borrowing with a citizen or permanent resident. As foreign persons, though, the established-home ban applies: the practical lane is a new dwelling, or co-purchasing with a citizen or PR partner. The visa-by-visa detail is in our foreign income and non-resident guide.

Queue three: foreign non-resident investors. Established homes are off the table until 30 June 2029. What remains open, with foreign investment approval and its fees, is new dwellings and vacant land, and here is the alignment nobody is writing about: the new-build lane foreign capital is legally confined to is the same lane where negative gearing survives from July 2027 and full depreciation still applies. The rules and the tax system are pointing offshore money and tax-motivated local money at the same door: new stock. Add falling prices and motivated developers, and the foreign investor who understands the lane has more counterparties than headlines suggest. Commercial property runs on a separate, more open approval regime again, covered in our commercial lending guide.

The honest caveat for queue three: the lending pool for non-residents is smaller, LVRs are lower, state surcharge duties apply, and FIRB rules are legal territory where you need your own advice. That is the map as at publication; what does not change is that preparation and lender selection decide who actually transacts, wherever the funding sits.

The buyer’s market playbook

Every advantage above belongs only to buyers who can transact. The playbook, in order:

• Pre-approval first. In a sub-50 per cent clearance market, the buyer who can sign is the buyer vendors negotiate with. Our pre-approval explainer covers what it does and does not promise.
• Ceiling from arithmetic, not adrenaline. Falling markets punish overpaying twice: once at purchase, once at valuation.
• Sequence deliberately. Selling and buying? The order is a strategy decision, worked through in the changeover piece and the auction guide.
• Use the conditions. Subject-to-finance is deposit insurance vendors will now accept. Take it.
• Let patience work. Listings above average means the one that got away has a sibling next month.

Frequently asked questions

Is it a buyer’s market in Australia right now?

The indicators say the balance has shifted to buyers: mortgage applications down at both of the country’s two biggest lenders since the May budget, investor credit growth forecast to halve, auction clearances under 50 per cent since May, prices falling fastest at the premium end, and above-average listings. It shows up as negotiation, conditions and time rather than universal bargains.

Will prices keep falling?

Nobody knows, and this piece makes no forecast. The last eight national downturns ranged from months to a few years and each eventually recovered, which argues for buying on arithmetic you can hold through a cycle rather than timing the exact bottom. Our downturn history covers all eight.

Can foreigners buy property in Australia in 2026?

Foreign non-residents cannot buy established homes under the ban running to 30 June 2029, but can buy new dwellings and vacant land with foreign investment approval and applicable fees. Commercial property runs on a separate regime. FIRB rules are legal matters, so specific circumstances need proper advice.

Can Australian expats buy during the foreign-buyer ban?

Yes, fully. Australian citizens and permanent residents are not foreign persons wherever they live: no FIRB approval, no ban, full access to established homes. Lending is the practical hurdle, since foreign income gets shaded, and lender selection decides the budget.

Can temporary visa holders buy a home right now?

Lenders will consider several visa subclasses, at up to 70 per cent LVR as sole borrowers for owner-occupied purchases and higher when co-borrowing with a citizen or permanent resident. As foreign persons, however, temporary residents are covered by the established-home ban, so the practical lanes are new dwellings or buying jointly with a citizen or PR partner.

Why would a foreign investor buy a new build rather than wait?

Because the rules confine foreign buyers to new stock anyway, and new stock is where negative gearing survives from July 2027 and full depreciation applies. Falling prices and motivated developers add negotiating room. The trade-offs, smaller lender pool, lower LVRs and surcharge duties, are real, which makes preparation and lender selection decisive.

Do falling prices actually help first home buyers?

Less than headlines suggest, and more than nothing. The affordable tier is holding firmest, so the discount is modest, but competition has thinned, conditions are accepted again, and time pressure has eased. The buyer-side gains are real even where the price falls are small.

What is the single best move in a buyer’s market?

Current pre-approval. Every advantage this market offers, pass-in negotiations, conditions, price talks, flows to the buyer who can transact decisively. Preparation costs nothing and is the difference between watching the market and using it.

The honest summary

Markets turn quietly and get named loudly. The naming is happening now: a major bank has counted the missing applications, the auction rooms have been saying it since May, and the price data agrees. None of it makes property cheap, and none of it guarantees the bottom is in. What it means is simpler: for the first time in years, the buyer who is prepared, local, expat or offshore, holds the stronger hand at the table. The preparation is the whole game, and it costs nothing to start.