For years, Australian real estate agents have operated in a market where strong competition and expectations of continued price growth encouraged buyers to make decisions quickly, but the economic uncertainty of 2026 is challenging many of those long-held assumptions.
Buyers are increasingly questioning not only what a property is worth, but whether purchasing it makes financial sense in an environment of rising borrowing costs, economic uncertainty and falling values in some markets.
According to BresicWhitney CEO Will Gosse, the shift has been particularly evident in Sydney’s upper-end property market, where buyers have become noticeably more cautious and the traditional triggers that once encouraged them to act are proving less effective.
“I think the biggest change, if we were to say between today and twelve months ago in buyer behaviour, is a level of cautiousness and a level of reservation that wasn’t as obvious twelve months ago,” Will says.
The implications extend well beyond longer campaigns or more difficult negotiations, with buyers reassessing their motivations, expectations and willingness to commit in ways that require a different approach to everything from pricing conversations to auction campaigns and ongoing buyer relationships.
Buyers are questioning the market, not just the property
BresicWhitney operates largely within the top quartile of Sydney’s property market, a segment Will says began feeling the effects of the current downturn as early as late February or early March.
While previous downturns were relatively short-lived, he believes the combination of economic pressures influencing the market today has created a more entrenched sense of uncertainty, particularly among buyers who are questioning how long the current conditions might persist.
“I think probably the difference between this cycle and the last couple of downtrends is the last two downtrends were quite short in nature,” he says.
“Whereas it feels like the various factors that are influencing the market today are not going to change in six or nine months’ time.”
That distinction matters because buyers are no longer necessarily confident that delaying a purchase will leave them worse off, particularly when the factors affecting their borrowing capacity and household finances show little sign of disappearing.
Will points to the cumulative impact of interest rate increases, government policy and geopolitical uncertainty, which he believes are weighing heavily on buyer confidence.
“People are nervous,” he says.
With interest rates having risen four times this year, and the possibility of further increases weighing on sentiment, buyers are assessing the ongoing cost of ownership more carefully, often finding that even where property values have declined, higher borrowing costs have prevented any meaningful improvement in affordability.
“So even if a buyer does recognise value, there’s a very real decision-making process for them about their household finances.”
This creates a challenge that cannot always be overcome through better marketing, stronger negotiation or a more compelling sales pitch, because a buyer may genuinely want a property, recognise that it represents good value and still decide that the financial risk of proceeding is too great.
The buyers still moving are doing so for a reason
While some buyer groups have retreated, others are finding opportunities in the changing conditions, particularly those whose circumstances make a move both desirable and financially achievable.
Will says investor activity has been fairly quiet in BresicWhitney’s markets, while first-home buyer participation has also been subdued, but one group has remained relatively active.
“We are seeing a reasonable amount of upsizing activity, and you would expect that particularly when people are moving out of, say, a small apartment into their first house,” he says.
“Times like this, it makes sense just on the numbers if you are fortunate enough to be in a position to do that.”
The reason is straightforward: although the property they are selling may have declined in value, the more expensive property they intend to purchase may have fallen further in dollar terms, potentially narrowing the financial gap between the two.
Will illustrates the opportunity using a hypothetical example of a $1 million apartment declining by 10 per cent to $900,000, while a $2 million house falls by $200,000.
Although the apartment owner would have experienced a $100,000 reduction in value, the house they are hoping to purchase would have fallen by $200,000, reducing the price difference between the two properties from $1 million to $900,000 before transaction costs.
“Your ability, I suppose, to cycle out of an asset that has lost less value in dollar terms than the asset you’re buying into, there is an opportunity to do that at the moment,” he says.
It is an important distinction for agents who may be tempted to treat all buyers as equally hesitant, when those with a genuine lifestyle or financial reason to transact can still be motivated, particularly where changing market conditions allow them to achieve something that was previously out of reach.
The same applies to vendors, with Will observing that sellers currently entering the market are generally realistic about conditions and are often motivated by circumstances such as changing family needs, financial decisions, a death in the family or separations.
“The sellers that we’re listing now are very realistic about the conditions that they’re entering into, and they’re generally selling for a reason,” he says.
Across BresicWhitney’s markets, he estimates there is approximately one-third less property for sale compared with a year earlier, suggesting that the pool of active buyers and sellers is increasingly made up of people with a clear reason to move rather than those simply testing the market.
The auction day is no longer necessarily the decision day
One of the clearest signs of changing buyer psychology is emerging in auction results, where the traditional deadline is not always producing the same level of competition or commitment seen in stronger markets.
Although auctions remain the dominant sales method across BresicWhitney’s markets, Will says only about 30 per cent of the agency’s auction sales over recent months have sold at or above reserve, despite vendors generally approaching the process with reasonable expectations.
He believes the result reflects a broader change in buyer behaviour, with purchasers taking longer to become comfortable with their decisions even when they are genuinely interested in a property and recognise its value.
“Sometimes we’ll see a sale happen one, two, three weeks after the auction and reach a result that wasn’t there on the auction day,” he says.
Will says this delay often reflects buyers taking additional time to become comfortable with the price and consider the possibility of another interest rate rise before making a decision.
The observation has important implications for agents accustomed to using the auction deadline as the primary catalyst for buyer action, particularly when a failure to bid or reluctance to meet the reserve does not necessarily indicate a lack of genuine interest.
Instead, buyers may need more time to reconcile the purchase with their broader financial circumstances, making meaningful post-auction conversations and continued engagement increasingly important to achieving a successful outcome.
Falling prices are changing where buyers look
The changing market is also influencing how buyers assess location and value, with some purchasers reconsidering suburbs and property types that may have been beyond their financial reach earlier in the year.
Will says more affordable houses in Sydney’s Inner West have continued to attract relatively strong demand, particularly properties offering two or three bedrooms, a backyard and proximity to the CBD.
“The pocket where we see probably the best level of base demand at the moment is the more affordable house in the Inner West,” he says.
While prices in the high $1 millions or low $2 millions remain substantial, he says comparable housing close to the city can command significantly higher prices in other Sydney markets, helping to sustain interest in the Inner West despite broader uncertainty.
Another trend is emerging in Sydney’s traditionally blue-chip suburbs, where buyers who began searching earlier this year believing certain locations were beyond their budget are now reconsidering those areas as prices adjust.
“We’ve seen some of those buyers now be able to go back into those blue chip suburbs and purchase something that wouldn’t have been possible for them to purchase twelve months ago,” Will says.
The shift suggests that even in a declining market, buyer demand is not necessarily disappearing but, in some cases, being redirected towards locations and property types that now represent better relative value.
Buyers don’t need another sales pitch
Perhaps the most significant change Will believes agents need to make is in how they communicate with buyers, particularly when purchasers have access to much of the same market information as agents and are increasingly aware of the economic pressures influencing property values.
Today’s buyers are arriving at inspections and entering negotiations with an understanding of price movements, interest rate developments and broader economic commentary, meaning they are often looking for an informed and realistic conversation rather than reassurance that conditions are better than they appear.
“Buyers are very exposed to all the data and information that you and I are,” Will says.
He believes the familiar approach of telling buyers that the market is strong and that now is an ideal time to purchase is unlikely to resonate in the current environment.
“So how we respond to that, I think, needs to be honest, needs to be realistic,” he says.
“And our role is really to understand if they are wanting to transact in these conditions, understand the reasons why they’re wanting to do that, and help them at a more personalised level.”
Will believes agents need to move beyond broad market commentary and engage with the circumstances of the individual buyer, understanding what is motivating them to purchase, what concerns may be preventing them from committing and whether their hesitation relates to the property’s price, their borrowing capacity or uncertainty about the wider economy.
“I think the strategy of saying to buyers, the market’s great. You should buy at the moment. It’s a great time for buyers to buy, etcetera, etcetera, is not the right approach,” he says.
Instead, he advocates for a more straightforward and realistic conversation, particularly where an agent knows a buyer is genuinely interested in a particular property.
For agency leaders, this also means ensuring their teams understand the conditions in which they are operating and are equipped to have more nuanced conversations with buyers and vendors.
“A lot of the industry has dealt with very favourable conditions for a very long time,” Will says.
He believes agents need to recognise that the current market is challenging and that the personal circumstances of buyers and sellers must be factored into the advice they provide and the campaigns they develop.
The market may stabilise before confidence returns
For agents hoping a change in interest rates will quickly restore buyer urgency, Will offers a more measured outlook, suggesting that the next recovery may look quite different from the rapid rebounds experienced in previous cycles.
He believes one of the most useful indicators of a market finding its footing will be the point at which further negative news, whether another interest rate increase, a change in government policy or an unexpected global event, stops pushing property prices lower.
“The moment we’re looking out for is when does bad news stop affecting the price of the market or the price of the house,” he says.
“And that to me will be a sign of maybe when the market has found its feet.”
However, without a substantial shift in interest rates or government policy, he does not expect buyers to return to the market in a sudden wave of activity, instead anticipating a more gradual improvement as purchasers become comfortable with prevailing prices and conditions.
“I wouldn’t say there’s necessarily going to be a rush, but probably the moment we’re looking for is when people feel more comfortable to transact and that the discount is sufficient enough that they can justify a purchase,” he says.
Will believes the current market is exposing a broader challenge for an industry that has spent much of the past decade operating in favourable conditions, with agents accustomed to strong competition, rapid transactions and relatively predictable price growth now being required to navigate more complicated buyer and seller circumstances.
That means understanding what can genuinely be influenced during a campaign and recognising what remains outside an agent’s control, particularly when interest rates, government policy and broader economic confidence are shaping buyer decisions in ways that no individual agent can change.
“And the things that we can’t control at the moment, we really need to push to the side and be, I guess, be humble about that,” Will says.
“And what we can control is really offering the best service possible and trying to ensure that we can help people buy a home if that’s what they’d like to do.”
Ultimately, he believes the way agents conduct themselves during difficult market conditions could have consequences well beyond the current cycle, with the relationships established now potentially influencing their businesses for years to come.
“I do feel that if we can provide value to buyers and we can provide value to sellers through a time like this and do so in a way that’s memorable and helpful for each of those individual circumstances, then that will really help define relationships for the next five or ten years.
“Because I do think the agents that do the job right through the hard times and show up in the right way through the hard times will be rewarded for that in the years to come.”