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“Is it a good time to buy in Sydney” is the question we are asked more than any other right now, and anybody who answers it with a confident yes or no is selling something.
Prices are correcting and the cash rate sits at 4.60 per cent after four rises in 2026.
What follows is not advice and cannot be, because the answer turns on your deposit, your job security and how long you intend to hold. What it does is set out both sides honestly and show you which facts actually decide it.
Two forces are pulling in opposite directions, which is why “is it a good time to buy in Sydney” has no single answer.
Borrowing costs have risen through 2026, which reduces what any given income can borrow. Prices have softened at the same time, which reduces what you need to borrow.
The Reserve Bank’s October 2026 Financial Stability Review puts the share of borrowers who owe more than their property is worth at under one per cent. In the same review it states that downside risks to housing prices remain, and that those risks are currently elevated.
Both of those are worth holding together. Few households are underwater today, and the central bank is not forecasting that prices have finished falling.
For a buyer, a correction is not automatically good or bad news. It changes which risks you carry, and that is the useful way to think about it.
You negotiate from a stronger position. For anyone asking “is it a good time to buy in Sydney”, fewer competing bidders, longer days on market and more willingness to meet on price are all features of a softer market rather than a rising one.
Rates are cyclical and a purchase price is permanent. A rate can be refinanced later, while the price you paid is fixed on the day you exchange. Buying well at a higher rate can beat buying poorly at a lower one.
Rent is still being paid in the meantime. Waiting has a cost that rarely appears in the comparison, and over two years in Sydney it is substantial.
First home buyers also face less competition from investors, many of whom are reassessing after the tax changes announced in May 2026. See what changed for investors.
Nobody can tell you where the bottom is. Anyone answering “is it a good time to buy in Sydney” with certainty is guessing, and a correction that continues means buying today costs more than buying later. That risk is real and should not be dismissed.
Higher rates also mean your borrowing capacity is lower than it was, so the property you can reach today may be a compromise you would not make in easier conditions.
And if your employment is uncertain, a correction is the worst time to be forced to sell. Negative equity is rare across the market but far less rare among people who bought recently with a small deposit.
For anyone asking “is it a good time to buy in Sydney”, that is the risk deserving the most weight, because it is the one that turns a paper loss into a realised one.
Beyond sentiment, a falling market changes three practical things in a loan application, and together they decide whether “is it a good time to buy in Sydney” is even the right question for you.
| What changes | Why it matters to you |
|---|---|
| Valuations land under the contract price more often | The lender lends against its assessed value, not your contract price, and the shortfall comes out of your deposit |
| Usable equity shrinks | If you are drawing on an existing property, the figure available is calculated from a lower value |
| Lender appetite tightens by postcode | Some lenders restrict high-ratio lending in areas they consider soft, which narrows your panel |
All three are checkable before you bid rather than discovered after. That is the single most useful thing a broker does in a market like this. See why applications get declined.
The question splits in two, and the two halves have different answers. Asking “is it a good time to buy in Sydney” without saying which one you mean produces advice that fits neither.
A home you intend to live in for a decade is largely insulated from the entry point. You are not selling into the correction, the rent you stop paying has real value, and a loan written today can be refinanced later.
An investment purchase is a different calculation. It depends on yield, on your ability to carry a shortfall if the property sits vacant, and on tax changes that have not commenced yet.
Those changes start on 1 July 2027. Negative gearing is then restricted to new builds, and the capital gains discount is replaced for gains accruing after that date.
The timing matters more than the headline. Properties held at the 7.30pm announcement on 12 May 2026 are exempt from the negative gearing restriction. An established dwelling bought today is not, so an investor buying now should price that in rather than assume it is grandfathered.
That is tax rather than credit, and your accountant should confirm how it applies to you before you commit.
Investors also face tighter assessment. Rental income is shaded, the buffer still applies, and some lenders restrict high-ratio investment lending in areas they consider soft.
So “is it a good time to buy in Sydney” is really two questions. For a long-held home the timing matters less than people think. For an investment it matters a great deal, and the numbers have to be run properly rather than assumed.
Stop asking “is it a good time to buy in Sydney” and test your own position instead. Three questions settle it more reliably than any forecast.
Could you hold the property if rates rose again from here? Could you hold it if your household lost one income for six months? And are you buying for long enough that a further fall would have time to recover?
If all three answers are yes, the timing question matters far less than it feels like it does. A no on any of them deserves more attention than any price forecast.We will tell you when the numbers do not support a purchase. See our residential lending page or call +61 447 959 546.
Nobody knows, and anyone claiming certainty is guessing. Forecasters disagree with each other and have a poor record at turning points.
What can be said is that the Reserve Bank puts borrowers in negative equity at under one per cent, while stating in the same review that downside risks to prices are currently elevated.
Those are facts about today rather than predictions, and the second is the reason to build your decision around what you can hold rather than around a forecast.
It depends on whether you are buying a home or an investment, and on how long you will hold it.
For a long term home purchase, the holding period usually matters more than the entry point, and rent paid while waiting is a real cost that rarely gets counted. For a short hold, a falling market carries genuine risk that is worth respecting.
Not inherently. Buyers in softer markets typically face less competition and negotiate better terms, which is the opposite of what happens in a boom.
The mistake is buying with no buffer, because a correction only hurts people who are forced to sell during it. If you can hold through, the entry point matters much less than it feels like it does at the time.
Not directly, since capacity is driven by income and commitments rather than by prices. It affects you through valuations instead.
A lender lends against its own assessed value, and in a softening market valuations come in under contract price more often, which means the difference has to come from your deposit at short notice.
Possibly, though it carries its own risk. When borrowing costs fall, borrowing capacity rises for every buyer at once, which historically supports prices.
Waiting for a lower rate can mean competing with more buyers for the same property at a higher price. A rate can be refinanced later. A purchase price cannot.
In a softening market a deposit does more work than simply meeting a lender’s minimum. A larger one gives you a buffer against a valuation shortfall, keeps you further from negative equity if prices fall again, and opens the sharper pricing tiers.
Where that is not realistic, a scheme place or a family guarantee can achieve a similar protection without the saving period.
The Reserve Bank’s own assessment of housing and household balance sheets is published in the Reserve Bank’s Financial Stability Review. It is worth reading in preference to market commentary.
Paritosh Wadhwani | Director and Principal Broker, APW Finance
Member of the Finance Brokers Association of Australia (FBAA). Arranging residential, commercial and specialist lending for Sydney clients across a panel of more than 50 lenders.
APW Finance Pty Ltd, 304/20a Lexington Drive, Bella Vista NSW 2153. Email: info@apwfinance.com. Phone: +61 447 959 546.
ACN 620 646 479 | ABN 79 620 646 479
This guide is general information only. It does not take into account your objectives, financial situation or needs, and it is not financial or credit advice. Lending criteria, interest rates, duty thresholds and government schemes change, and every application is subject to lender approval.
Consider whether this information suits your circumstances and seek independent advice before acting. Figures quoted are current at the date below and should be confirmed before you rely on them. Last reviewed: October 2026.
APW Finance Pty Ltd delivers expert lending solutions with personalised service, empowering clients across residential, commercial, and business sectors.