Australian real estate agents are facing a challenging market as the economic uncertainty of 2026 changes the way buyers make decisions. For years, strong competition and expectations of continued price growth encouraged buyers to act quickly, but now they are questioning not only what a property is worth, but whether purchasing it makes financial sense.
Will Gosse, CEO of BresicWhitney, highlights a marked shift in buyer behavior within Sydney’s high-end real estate sector, where potential purchasers are now far more hesitant than they were just a year ago. ‘The most noticeable difference in buyer behavior,’ he notes, ‘is the increased caution and hesitation that simply wasn’t there twelve months back.’
Buyers are questioning the market, not just the property
BresicWhitney primarily serves Sydney’s top-tier market segment, an area where Will observes the downturn’s impact began as early as late February or March. Unlike past slowdowns, which were brief, today’s economic pressures have created lasting uncertainty, particularly among buyers questioning how long these conditions will endure.
Will contrasts this downturn with previous ones, which resolved quickly. Now, he says, the factors shaping the market—like rising rates and policy shifts—won’t disappear in six or nine months. This matters because buyers can no longer assume delaying a purchase will leave them worse off, given the prolonged financial strain.
Buyer Hesitation Grows
The CEO attributes buyer hesitation to rising interest rates, four hikes this year alone, and broader concerns like government policy and global instability. With costs climbing and no clear end in sight, purchasers are scrutinizing long-term ownership expenses more carefully than ever.
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Even when property values drop, higher borrowing costs have kept affordability gains minimal. ‘Buyers may see good value,’ Will explains, ‘but they’re still forced to weigh whether the purchase aligns with their household finances.’ This dilemma often can’t be resolved through marketing or negotiation alone.
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. 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.
Upsizing Opportunities Emerge
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.
Across BresicWhitney’s markets, Will 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, with buyers taking longer to become comfortable with their decisions even when they are genuinely interested in a property.
“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,” 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. As a result, agents need to be prepared to have more detailed conversations with buyers and vendors, understanding their individual circumstances and motivations.
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Falling prices are also changing where buyers look, 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.
Shifts in Suburban Demand
“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.
“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. Instead, 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.
With approximately 30 per cent of BresicWhitney’s auction sales over recent months selling at or above reserve, despite vendors generally approaching the process with reasonable expectations, it’s clear that the traditional auction deadline is not always producing the same level of competition or commitment seen in stronger markets.
Buyers are assessing ownership costs more carefully due to interest rate increases and broader concerns. Buyers weigh purchase decisions against household finances.
