The property market is falling. This is when smart investors should be looking to buy

Australians have spent years complaining about how expensive property has become. Now that prices are falling, many people are nervous about buying.

I understand the hesitation. Interest rates are higher, household budgets are stretched, and the economic outlook remains uncertain. But having worked through numerous property cycles, I believe the current downturn could offer some of the better buying opportunities we've seen in years.

The numbers are confronting. According to Cotality, Australian home values fell 1.1 per cent in September, the sixth consecutive monthly decline. National values are now 5.2 per cent below their March peak.

Sydney has fallen 8.6 per cent from its peak, Melbourne is down 7.2 per cent from its recent cyclical high and Brisbane recorded a 1.5 per cent decline in September alone. NAB has also downgraded its housing forecasts, predicting an 8 per cent decline across the combined capital cities during 2026.

Prices could fall further. For investors with a long-term strategy, I believe this is an important time to be looking closely at the market.

Buyers have more opportunities

Think back to the property boom. Buyers were competing at crowded auctions, paying above expectations and making decisions under enormous pressure. There was a genuine fear that if you didn't buy today, the same property would cost significantly more tomorrow.

The conditions today are quite different. Cotality's latest figures show capital city homes are taking a median 39 days to sell, compared with 23 days a year ago. Total advertised stock across the combined capitals has increased 23.1 per cent over the same period.

Buyers have more properties to consider, more opportunities to negotiate, and greater scope to conduct proper due diligence. For an investor with their finances in order, these are attractive conditions.

Negotiating a better purchase price can have a meaningful impact on long-term investment returns, particularly when you're holding an asset for 10 or 20 years.

Australia has many different property markets

One of the biggest mistakes investors make is treating Australian property as a single market. National figures provide a broad picture, but the performance of individual cities, suburbs and properties can vary enormously.

Even during this downturn, the differences are significant. Cotality reports that Sydney dwelling values are down 7 per cent over the past year, while Melbourne has fallen 6.2 per cent.

Perth is still 10.1 per cent higher than a year ago and Darwin has recorded annual growth of 11.9 per cent. Regional Australia has also demonstrated resilience, with dwelling values increasing 5.6 per cent annually.

There are differences within cities, too. The prestige end of Sydney and Melbourne has seen particularly sharp declines, with upper-quartile house values falling more than 10 per cent from their peaks in both cities. More affordable properties and units have generally held up better.

This is why property selection matters so much. At Reventon, we look closely at population growth, employment, infrastructure investment, housing supply, rental demand and affordability.

A property in an area experiencing strong employment and population growth can have very different prospects from one in a suburb facing oversupply or weak demand. Understanding those fundamentals is essential to making informed investment decisions.

Nobody can predict the bottom

I regularly hear people say they're waiting for property prices to hit the bottom before buying. My question is always the same: how will you know?

The bottom of a property cycle generally becomes clear once the market has started recovering. By then, buyer confidence may have returned, competition may have increased and some of the negotiating opportunities available today may have disappeared.

Successful property investment requires research, discipline, a sensible purchase price and the patience to hold an asset through changing market conditions.

Someone buying a quality investment property with a 15 or 20-year horizon should consider how much weight to place on the possibility of prices falling another few per cent in the coming months.

Waiting indefinitely for perfect conditions can carry a cost of its own.

The housing shortage is still a major issue

The latest construction figures also deserve attention. The Australian Bureau of Statistics reported that dwelling approvals fell 6.1 per cent in August to 16,953. Approvals for private sector dwellings excluding houses fell 21.2 per cent during the month.

Australia continues to face enormous challenges delivering enough new housing. Population growth, household formation and demand for well-located homes will continue to influence the market.

The country's ability to deliver sufficient housing remains a major consideration for investors assessing long-term demand.

Be prepared to act

Investors still need to be careful. Interest rates could remain elevated, some locations may experience further price declines and highly leveraged investors could find themselves under financial pressure.

That's why I always emphasise buying quality property, understanding cash flow, maintaining financial buffers and avoiding excessive debt. You need to know what you can comfortably afford and have a strategy that accounts for changing market conditions.

I've seen excellent property opportunities emerge during periods of low confidence, when buyers sat on the sidelines. Investors who had done their research, understood the fundamentals, and were financially prepared were in a position to take advantage.

Property will always move through cycles. My advice to anyone considering a long-term investment is to start doing the work now. Understand the markets, get your finances organised and identify properties that meet your investment criteria.

If the right opportunity comes along at the right price, have the confidence to consider it.

You may look back on this period in a decade and wish you'd acted while so many others were waiting.

Chris Christofi is the CEO of Australian property investment group Reventon.

Disclaimer. This is general information. It is not investment advice. Prior to making any investment decision, seek the services of a licensed financial professional.