The Best Buying Windows Rarely Feel Like Buying Windows

Warren Buffett once said investors should be “fearful when others are greedy and greedy when others are fearful.”

He was talking about the share market, but the principle is worth thinking about in property too.

Australia’s cash rate is now at its highest level in around 15 years. Borrowing costs are high, borrowing capacity has fallen, and buyer sentiment has weakened significantly compared with last year.

For investors who are financially ready to buy, however, periods like this can create opportunities.

Looking back through recent property cycles, some great buying windows appeared when market sentiment was low. At the time, they rarely felt like opportunities, and whether they became one depended on the markets we look at.

2018-19: When the biggest markets were heading backwards

By 2017, the property boom in Sydney was coming to an end. Lending conditions were tightening, and property prices started declining. Melbourne followed.

With Australia’s two largest housing markets weakening, the broader property landscape became much less positive (see chart below).

But that wasn’t the experience everywhere (see chart below).

• Tasmania was moving through a very different cycle. Hobart recorded strong growth through this period, supported by affordability, a strengthening economy, population growth and limited housing supply.

• Parts of regional Victoria were also starting to strengthen. Ballarat, for example, moved into a strong growth period in late 2018 while Melbourne was continuing to weaken.

For an investor following national headlines, 2018 and 2019 may not have looked particularly exciting, but for an investor looking market by market, the picture was very different.

Australia has hundreds of property markets moving through their own cycles. Weakness in the largest cities can pull down national averages without telling us much about conditions elsewhere.

2020: The shock nobody could predict

In early 2020, uncertainty was everywhere. Australia entered recession, unemployment jumped and nobody knew how long lockdowns would last or what they would ultimately mean for housing.

Property prices initially fell, but the downturn was relatively short. By the second half of 2020, conditions were already changing: Price decline largely stopped, with sales time on market shortening (see chart below).

What followed was an extraordinary period of national property growth through 2021 and into 2022.

Some of the forces behind that boom would have been extremely difficult to predict at the beginning of the pandemic.

Household savings increased sharply as people had fewer opportunities to spend. Government support helped household finances. Interest rates fell to record lows. Working from home changed what many households wanted from their properties, increasing demand for additional space.

At the same time, Australia’s housing supply remained constrained.

COVID and uncertainty dominated headlines in early 2020, but they weren’t the only forces affecting the property market. Other drivers were moving in a much more favourable direction.

That is an important lesson when sentiment is weak.

Property markets are influenced by interest rates, employment, household finances, population, affordability, supply, rental conditions, government policy and many other factors. Their influence also changes over time.

The factor receiving the most attention today won’t necessarily determine what happens next.

2022-23: Same interest rates, very different outcomes

The next major test came quickly.

The RBA started raising interest rates in May 2022. Rates rose rapidly, borrowing capacity declined and property prices weakened across many parts of Australia.

Once again, house market performance varied considerably between markets.

• Brisbane, Perth, and Adelaide, together with their respective regional markets, entered another period of very strong growth in 2023 after the initial slowdown.

• Sydney recovered from its initial slowdown but didn’t experience the same scale of boom, while Melbourne remained considerably weaker (see chart below).

All these cities faced the same RBA cash rate, but their local conditions differed greatly.

The 3 smaller capitals benefited from different combinations of strong population growth, active job markets, relative affordability, and tight housing supply. They also entered this period at considerably lower price points than Sydney and Melbourne.

Those fundamentals gave them greater capacity to continue booming despite rapidly rising and high interest rates.

Investors who focused only on rates could have reached the same conclusion about every Australian market. The subsequent performance shows why looking deeper matters.

What does this mean in 2026?

Today, investors are facing another period of uncertainty.

The cash rate is at its highest level in around 15 years. Borrowing costs are high, borrowing capacity has tightened and buyer confidence has fallen significantly from last year.

For financially ready investors, this can create an opportunity.

Lower confidence means:

• Fewer buyers competing for properties,

• Properties can take longer to sell,

• Vendors may become more open to negotiation, and

• Buyers can have more room to secure the right property at the right price.

We have seen similar periods before. The cause of uncertainty changes, and so do the markets that perform well afterwards. What remains consistent is that opportunities can emerge while confidence is still low, well before the broader outlook starts to feel comfortable again.

Eventually, conditions will change. Interest rates will move, sentiment will shift, and buyers will return. By then, today’s level of competition and negotiating power may have changed too.

A buying window doesn’t mean buying everywhere

A buying window still requires careful market selection.

The historical examples in this article show just how differently Australian property markets can perform under the same broader conditions. During periods of uncertainty, some markets have gone on to deliver strong growth while others have remained flat or declined.

That makes the fundamentals particularly important today.

Housing supply, population growth, employment, affordability, rental conditions and the local economy all help shape the outlook for an individual market. Where these conditions remain healthy despite weaker sentiment, investors may find opportunities that are harder to secure when confidence and competition return.

In other words, for investors ready to make their next move, a buying window can be a period when strong market fundamentals meet lower competition, creating an opportunity to buy before confidence fully returns.

Some investors may prefer to wait until prices have clearly bottomed and market conditions start improving. Waiting for clearer signs of a market bottom can feel safer, but turning points are much easier to identify in hindsight. For a long-term investor, a good buying opportunity doesn’t depend on capturing every percentage point of a downturn. Securing the right property, in the right market, at a good price can matter far more over the years ahead.

The best buying windows often become obvious only after they have passed.

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