Whether now is a good time to buy is the question investors ask most often, and the national market cannot answer it. In late 2026 the more useful question is whether a particular purchase suits your funding position, your capacity to hold it and the tax settings that now apply to what you buy.
The figures above describe a market that has changed quickly. What follows is a way to decide what those changes mean for one purchase, which is the only decision an investor actually makes.
Market conditions in late 2026
National dwelling values fell 1.1% in September, the sixth consecutive monthly decline, leaving values unchanged over twelve months and 5.2% below their March record. Sydney fell 1.4% in the month and Brisbane 1.5%, while Darwin was the only capital to rise. Over the year Perth is still up 10.1% and regional markets 5.6%, against a 1.8% fall across the combined capitals (Cotality, the 1st of October 2026).
The rental market has moved the other way. SQM Research measured a national vacancy rate of 1.4% in September, and advertised rents were 7.6% higher than a year earlier. With values easing and rents still rising, Cotality's national gross rental yield reached 3.85%, the highest since August 2019.
Activity has slowed more than prices. Sales over the three months to September were 19.1% lower than a year earlier, total listings were 23.1% higher and the typical capital city home took 39 days to sell, up from 23. For a prepared buyer, that combination means more choice, more time for due diligence and more room to negotiate. For a buyer who is not prepared, it changes nothing. The monthly market update sets out the city detail in where values are falling and where opportunity sits.
Test borrowing capacity at today's rate and the lender buffer
The Reserve Bank has lifted the cash rate four times this year, most recently to 4.60% at the end of September, a combined increase of one percentage point. Lenders must still assess new loans at least three percentage points above the loan rate, and since February APRA has limited each lender to 20% of new lending at six times income or more, applied separately to investor loans. Loans to buy or build a new dwelling are exempt from that limit.
The practical consequence is that the amount a lender will approve today may be well below what the same household could borrow eighteen months ago. That figure, confirmed with a mortgage broker before any property is considered, is the first boundary of the decision. It is not the target. A purchase sized to the maximum approval leaves no margin if rates move again.
Holding capacity matters more than the month you buy
Holding capacity, more than entry timing, decides whether an investor keeps a sound property through a soft patch or sells at the wrong time. Before committing, model three conditions together: a further rate increase of half a percentage point, twelve weeks without rent, and an unplanned maintenance cost. If the budget still holds without strain, the purchase can be carried through the cycle. If it does not, the timing question is irrelevant.
The Property Investment Professionals of Australia 2026 Annual Investor Sentiment Survey found that 62.3% of investors are negatively geared on a cash flow basis, up from 56% a year earlier, and that holding and compliance costs were the most common reason investors gave for selling.
Write down the monthly amount you could commit to the property for five years without changing how you live. Compare it with the modelled holding cost after tax at a higher rate. The gap between the two numbers is the most useful figure in the whole decision.
Tax settings now shape what you buy
The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received royal assent on the 26th of June 2026. From the 1st of July 2027, losses on residential property bought after 7:30pm AEST on the 12th of May 2026 can no longer be deducted against salary and other income. They are carried forward and used against residential property income and gains. Property held before Budget night keeps the existing treatment until it is sold, and new residential dwellings are exempt. From the same date the 50% capital gains tax discount is replaced by indexation of the cost base, with a minimum tax rate on capital gains (King & Wood Mallesons).
The detail that matters most to buyers is still being settled. A second tranche of legislation, released for consultation in August, proposes that a property counts as new if it adds to housing supply and is acquired within 24 months of its certificate of occupancy. Until that is law, any purchase that relies on the new-build exemption should be confirmed with an accountant before contracts are signed. The tax position belongs to your accountant; the investment decision should simply take it into account.
New and established property carry different risks
The new rules favour new supply, and it would be easy to conclude that new is now the better investment. The tax treatment is only one input. A new dwelling brings builder risk, completion valuations, body corporate structures and, in growth corridors, competition from identical stock. An established property in a tightly held location may carry a weaker tax position and a stronger long-term demand profile. The comparison in buying new or established sets out how to weigh them, and the common new-build pitfalls are worth reading before any off-the-plan contract.
Time in the market has served investors better than timing it
Attempts to pick the bottom of a cycle rarely succeed, because the evidence that the bottom has passed arrives months after it has. A 2020 Property Investment Professionals of Australia market report by then Chair Peter Koulizos examined fifteen years of capital city data and reached a conclusion advisors across our network see in practice: well-selected property held through the cycle has generally rewarded patience more reliably than entry timing. Past performance does not guarantee future results, but the principle explains why a sound purchase made in a soft market is rarely the mistake investors fear.
A softer market rewards preparation
Fewer investors are competing. The same PIPA survey found that 27.8% of investors plan to buy another investment property, down from 41% in 2025. When competition thins, the advantage moves to buyers who have done their preparation in advance: finance approved, structure settled, strategy written down and a clear brief for the type of property they will consider. Those buyers can act within days when the right property appears and can walk away when it does not. Investors who begin preparing only after sentiment turns usually find themselves competing again. The guide to preparing while the market is uncertain covers the groundwork in more detail.
Three steps before you act
- Funding. Confirm borrowing capacity and pre-approval with a mortgage broker, and set your own limit below it.
- Structure and tax. Ask your accountant how the 2027 rules apply to your circumstances and to the ownership structure you are considering.
- Strategy. Work through a written strategy with an Accredited Advisor who acts for you, not for a developer, vendor or agent, so that the property is chosen to fit the plan rather than the other way round.
Investors who already hold property can start with a portfolio review, which tests each existing asset against the new settings before anything new is added. Those starting out may find the ASPIRE property investment guide a useful first read.
Test the decision against your own position
An ASPIRE Accredited Advisor can work through your funding position, holding capacity and the 2027 tax settings with you, and help you decide whether to proceed, prepare or wait.
General information only, current at the 28th of October 2026. It does not take account of your objectives, financial situation or needs. Property investment involves risk, and past performance is not a reliable indicator of future performance. Market data: Cotality Home Value Index (September 2026) and the Reserve Bank of Australia. Tax settings are summarised from the legislation and published commentary; confirm how they apply to you with your accountant, your finance with a mortgage broker and any contract with a solicitor or conveyancer.