The Market Has Changed. Has Your Strategy?

For years, Melbourne homeowners became accustomed to one thing: property prices going up. We watched neighbouring homes sell for record prices, saw buyers competing at packed auctions and became comfortable with the idea that our biggest asset would continue to grow in value. But property markets don't move in one direction forever. And as we move towards the end of 2026, the Melbourne property market is entering a very different chapter.

Auction clearance rates have weakened. Buyers are becoming more selective. Interest rates have placed additional pressure on borrowing capacity. And some homeowners are discovering that the price they had in mind six or twelve months ago may no longer reflect the market they're selling into. For buyers, that's creating opportunities. For sellers, it's creating challenges. And for the real estate industry, it's a reminder that the advice people receive matters more than ever. The market has changed. The question is whether we've changed the way we approach it.

The balance of power is shifting

During a rising market, buyers often feel enormous pressure to act. There's a fear that if they don't purchase today, they'll be paying more tomorrow. That urgency can create strong competition, shorter negotiations and auction results that exceed expectations. But when the market begins to soften, the relationship between buyers and sellers changes.

Buyers start taking their time. They're comparing more properties, conducting more research and becoming less willing to overlook defects, poor layouts or unrealistic asking prices. A property that might have attracted several competing buyers in a stronger market may now require considerably more patience and negotiation. And that's not necessarily a bad thing.

A more considered market can give buyers greater confidence to make decisions based on value rather than fear. But it also means homeowners need to approach selling differently. The price your neighbour achieved twelve months ago is not necessarily the price your property will achieve today. That's a difficult reality to accept when a home represents years of hard work, financial sacrifice and emotional attachment. Yet the market ultimately determines what buyers are prepared and able to pay.

In my view, the greatest mistake a seller can make in this environment is to choose an agent based solely on whoever promises the highest price. A great agent doesn't simply tell you what you want to hear. They tell you what you need to know.

Victoria's new auction laws: are we solving the right problem?

Just as Melbourne's property market is navigating a challenging period, the Victorian Government has introduced significant changes to how residential properties are advertised and sold. From October, agents conducting auctions and fixed-date sales must publicly disclose the seller's reserve price at least seven days before the scheduled sale. The reserve is the minimum price a homeowner is prepared to accept. Previously, this figure was generally kept private until auction day.

The changes also introduce a new Property Price Statement, additional comparable-sales information and requirements around publishing final sale prices. The intention is understandable. Underquoting has been one of the most frustrating aspects of the Victorian property market for years. Buyers can spend weeks inspecting properties, paying for building reports and arranging finance, only to discover that the seller's expectations are significantly higher than the advertised range. That shouldn't happen.

Buyers deserve accurate information, and agents should be held accountable for misleading price advertising. But while I support greater transparency, I have genuine concerns about whether these new rules will achieve their intended outcome.

The reserve price contradiction

Consider a homeowner selling at auction with a published reserve of $1.2 million. Under the new rules, that price must be publicly advertised at least seven days before the auction. If the homeowner decides before auction day that they want to change the reserve, the seven-day disclosure period starts again. That can mean postponing the auction. However, once the auction is underway, the seller can still respond to bidding and changing circumstances. And this creates an important question.

If a seller's position can change during the auction, how much certainty does the advertised reserve really provide? A published reserve gives buyers useful information about the seller's stated minimum price before auction. But it isn't a guarantee that every aspect of the negotiation will remain unchanged. A buyer could arrive believing they understand the seller's expectations, only to encounter a different negotiating position once bidding begins.

I don't believe that's the clarity buyers were necessarily expecting from these reforms. And if the rules require such strict disclosure before auction day, there should be clear, consistent guidance about how changes during the auction are communicated and managed. Otherwise, we risk creating the appearance of certainty without delivering complete certainty.

Could the new rules actually reduce transparency?

My other concern is what happens when sellers begin reconsidering whether auction is the best method of sale. An auction is one of the few occasions in real estate where buyers can watch competing offers unfold in public. They can see who is bidding, how much they're offering and whether they're willing to continue. It's a transparent form of competition.

But if publicly revealing the reserve makes some homeowners uncomfortable, or the new requirements create delays and complications, they may increasingly turn towards private sales. And private sales are very different. Negotiations generally happen behind closed doors. A buyer may be told that another party has submitted an offer, but they don't necessarily know its value or conditions. They have to rely on the information being communicated to them.

The new legislation also creates additional considerations for private-sale campaigns. Where a seller sets a deadline by which buyers must submit offers, that process may be treated as a fixed-date sale, triggering the reserve disclosure requirements. This could make it harder for agents to use clear offer deadlines in circumstances where a property is attracting multiple interested buyers. And that presents a potential unintended consequence.

Rules designed to improve transparency could encourage some sellers to move away from public auctions and towards less visible negotiations. It's too early to know whether that will happen on a significant scale. But it's a risk that deserves serious attention. Transparency should help buyers make informed decisions, not simply change where uncertainty occurs.

What does this mean for Darebin and Banyule?

The impact of a changing market is never identical across every suburb. A period home in Northcote attracts a different buyer demographic from a two-bedroom apartment in Preston. A family residence in Ivanhoe or Eaglemont operates in a different price bracket from an investment property in Reservoir or Heidelberg West. And a renovated home in Fairfield may experience a very different campaign from an unrenovated property just streets away.

That's why broad Melbourne property statistics never tell the complete story. There isn't one single property market. There are hundreds of smaller markets influenced by local supply, buyer demographics, schools, transport, land size and the characteristics of individual homes. Some properties will continue to attract strong competition. Others will struggle if their price expectations don't align with the market.

For homeowners considering selling, understanding those local differences is essential. And for buyers, they can create opportunities that weren't available during stronger market conditions.

Why this could be a great opportunity to upsize

While much of the conversation around Melbourne's property market has focused on falling prices, I believe there's another side to the story that deserves more attention. For homeowners looking to upsize, a softer market can create an excellent opportunity. It's something people often overlook.

When property prices rise, homeowners naturally celebrate the increasing value of their existing home. But there's a catch. If your home is increasing in value, chances are the larger, more expensive property you're hoping to purchase is also becoming more expensive. And because that property costs more, the dollar difference between what you're selling and what you're buying can continue to increase. A declining market can reverse that equation.

Consider a family living in a home worth $1 million, hoping to upgrade to a property worth $1.6 million. The price difference is $600,000. Now imagine both properties fall in value by 10 per cent. The family's existing home would be worth $900,000, while the larger property would be worth $1.44 million. The difference has narrowed to $540,000. That's a $60,000 reduction in the purchase-price gap.

And while the homeowner has technically lost $100,000 in the value of their existing property, the property they want to buy has become $160,000 cheaper. Of course, the calculation isn't quite that simple in practice. Mortgage balances, interest rates, stamp duty, selling costs and differences between individual properties all affect the final result. But the principle is important. When you're upscaling, the price of the property you're buying can matter more than the price of the property you're selling.

Imagine a young family moving from an apartment in Preston into a house in Reservoir. Or a couple selling their first home in Northcote to purchase a larger family residence in Ivanhoe. For these buyers, what matters isn't simply whether their existing home is worth less than it was a year ago. It's whether the gap between their current property and their next home has become more manageable. And in some cases, that opportunity may be greater than it was during the property boom.

The key is understanding your financial position and buying and selling strategy before committing.

Don't wait for your home to recover without considering the other side

One of the conversations I expect to become increasingly important over the coming months is with homeowners who are reluctant to sell because their property is no longer worth what they believe it was at the peak of the market. That's understandable. Nobody enjoys the thought of selling for less than they could have achieved previously.

But if the larger property you're hoping to purchase has also fallen in value, waiting for your existing home to recover may not necessarily improve your financial position. If both properties rise again, the more expensive property could increase by a greater dollar amount. Suddenly, the gap you're trying to close becomes larger.

This doesn't mean everyone should rush to sell and buy. It means homeowners should look at the complete transaction rather than concentrating exclusively on their sale price. Property decisions should be based on where you're trying to get to, not simply where you've been.

A challenging market is where good advice matters most

I've always believed the real value of an agent becomes clearer when the market is difficult. When properties sell quickly and prices continually rise, it's easy for strong market conditions to disguise average advice. But when buyers become more selective, marketing campaigns take longer and negotiations become more challenging, the fundamentals of real estate matter.

Understanding buyers. Knowing the local market. Presenting properties properly. Providing realistic price expectations. And developing a strategy that suits the individual home.

The introduction of new auction laws only reinforces the importance of those conversations. Sellers need to understand how each method of sale works, what the new rules require and how those rules might affect their campaign. Buyers need accurate information, realistic expectations and confidence in the process. And agents need to do more than simply list a property online and wait for enquiries. They need to provide genuine expertise.

Opportunity hasn't disappeared. It's changed.

There is no denying that Melbourne's property market is facing challenges. Higher borrowing costs, cautious buyers and changing legislation have created an environment that requires more thought and preparation than we've seen in recent years. But that doesn't mean people should stop making property decisions.

Families will continue to grow. People will continue to relocate. Homeowners will continue to downsize. And buyers will continue searching for a place to call home.

For some, this market will present challenges. For others, particularly those looking to upsize, it may create opportunities that simply weren't available when prices were rising. The important thing is understanding the market we're in, rather than making decisions based on the market we remember.

And as Victoria introduces new rules intended to make real estate more transparent, we should be prepared to question whether they genuinely improve outcomes for consumers. Because good property decisions don't come from headlines, hype or predictions. They come from information, experience and sound advice.

The Melbourne property market has changed. Perhaps the greatest opportunity now belongs to those willing to change their strategy with it.