Buying in a falling market: the opportunity, and the risks

Home values have been falling across most of Australia for seven months, and South East Queensland hasn't been spared. For buyers, that changes two things at once: sellers are more open to offers than they've been in years, and getting finance has become harder. This article covers both sides.

It isn't a recommendation to buy or to wait. That depends on your own situation. It's a guide to what a softer market changes, so you can go in with your eyes open.

Where the market is right now

Cotality's Home Value Index for October 2026 showed national values down for a seventh straight month and 6.7% below their March peak. Regional Queensland, which includes the Sunshine Coast, was 4.0% below its May peak, and Brisbane house values fell 6.2% in the three months to the end of October.

Over the same period the Reserve Bank has lifted the cash rate five times, to 4.85% in November 2026, its highest level since 2008.

Why sellers are more open to offers

When prices are rising, sellers hold the cards. That has shifted. In its November 2026 report, Cotality put the median time on market at 39 days, the longest since August 2020, and the typical discount from the asking price at 4.7%, the largest since May 2019. Its October chart pack showed regional Queensland with the widest discounts of any regional market, at about 4.3%, and around 31% more homes listed for sale than a year earlier.

More homes for sale and fewer buyers means buyers have more choice and sellers have less leverage. Some need to sell - they've bought elsewhere, their circumstances have changed, or repayments have become harder after five rate rises - and the longer a home sits, the more anxious a seller tends to get. That's where the room to negotiate comes from.

Offering under the asking price

You can offer any amount you like. The seller can accept it, reject it or come back with a counter-offer. A few things make an offer under the asking price more likely to work:

• Base it on recent sales, not the asking price. What similar homes nearby have actually sold for in the past few months is the best guide to value, and it's what the lender's valuer will look at too.
• Look at how long the home has been listed. A property that's been on the market for two months is a different conversation from one listed last week.
• Be ready to move. A buyer with a current pre-approval and a clear settlement date is easier to say yes to, and that can matter as much as the price.
• Keep your conditions. Don't give up your finance clause or your building and pest inspection to make a low offer more attractive. In a falling market those protections matter more, not less.

A discount isn't guaranteed. Well-priced homes in sought-after spots still sell quickly, and plenty of sellers would sooner wait than accept a low offer.

One thing to be clear about: Brody is a mortgage broker, not a buyer's agent or a valuer. What to offer is your decision. The selling agent works for the seller, so if you'd like someone negotiating for you, that's the job of a buyer's agent, and your solicitor should look over the contract before you sign.

The other side: what a falling market does to your finance

The same conditions that make sellers flexible make lenders careful. This is where buyers get caught.

Your borrowing power is lower. Lenders test whether you could afford the loan at a rate higher than the one you'd actually pay, so every rate rise cuts the amount you can borrow. Cotality's research director estimated in November 2026 that borrowing capacity had fallen by about 12%, more than the fall in home values. A lower price doesn't automatically mean a home is easier to afford. The borrowing power calculator gives a rough guide.

An older pre-approval may no longer hold. If yours was issued before the September or November rate rises, the amount may have changed. Have it re-checked before you make an offer.

The valuation can come in under the price you agreed. The lender lends against its own valuation, based on current sales. If prices have slipped since comparable homes sold, the valuation can land below your contract price, and you'd need to cover the gap from your own money, renegotiate, or withdraw if your contract allows it. A finance clause with enough time in it is your protection.

Prices could keep falling after you buy. If they do, your equity shrinks. With a small deposit, you could end up owing more than the home is worth, which matters if you need to sell or refinance in the next few years. A bigger deposit and a longer time horizon both reduce that risk.

Repayments could rise again. Nobody knows what the Reserve Bank will do next. It's worth working out whether you could still manage if rates went higher, and keeping a cash buffer after settlement.

One upside for first home buyers

Lower prices bring more homes under the 5% Deposit Scheme price caps: $1,000,000 for Brisbane, the Gold Coast and the Sunshine Coast, and $700,000 for the rest of Queensland. Both the purchase price and the lender's valuation need to be at or under the cap. See every QLD grant and scheme explained. Keep in mind that a 5% deposit leaves very little buffer if prices fall further.

Nobody can pick the bottom

We don't know where prices or interest rates will go next, and neither does anyone else. Cotality has said it expects regional Queensland to weaken further in the coming months, but forecasts are often wrong in both directions.

What you can control is whether the purchase works for you: repayments you can manage with room to spare, a home you plan to keep for long enough to ride out a dip, and a price you're comfortable with whatever the market does next.

A sensible order to do things in

1. Get your borrowing power re-assessed at today's rates.
2. Set your own limit, below the lender's maximum, with a buffer for further rate rises.
3. Research recent sales for the homes you're looking at.
4. Make your offer subject to finance and a building and pest inspection.
5. Ask about an upfront valuation on anything unusual.
6. Keep some cash in reserve after settlement.

Common questions