A falling market isn’t easier for anyone, it’s harder. Agents are working longer hours for fewer sales, vendors are refusing to accept lower valuations, and even committed buyers are second-guessing themselves. The friction in the system is evidence of one thing: buyer negotiating power has returned, and it’s structural, not temporary.
The mechanics are straightforward. Vendors who bought or refinanced near the peak are anchored to those prices. They remember what the neighbour sold for six months ago, and they’re not ready to accept 5 per cent or 10 per cent less. Agents are stuck in the middle, trying to manage expectations downward while keeping the listing, and they’re losing campaigns when vendors pull out.
Why deals are harder to close right now
The gap between asking price and what buyers will pay has widened. Agents are fielding offers that vendors see as insults, and many listings are expiring without a sale. That’s not a sign of a market about to turn, it’s a sign of a negotiation deadlock, and the party with the cash has the advantage.
First home buyers are pulling back. They’re the most sensitive to negative headlines, and when they don’t see competition at inspections, they assume something is wrong with the property. Add a nervous parent in their ear, and the decision to wait becomes easy.
Upgraders are stuck in a timing trap. Sell first, and they risk buying into a recovering market at a higher price. Buy first, and they might not be able to offload their current property for the figure they need. Agents are modelling ultra-conservative selling estimates to avoid leaving clients financially exposed, and that’s slowing the transaction cycle even further.
The catch
Buyers agents are seeing lower enquiry, when prices are falling, FOMO disappears, and so do the clients who thrive on it. The buyers who are still in the market expect sharp discounts, and while 5 per cent to 10 per cent is realistic, those chasing 20 per cent-plus are alienating vendors and missing the window entirely.
The real shift is in who controls the timeline
In a hot market, vendors set the pace. Auctions force decisions, buyers compete, and the agent’s job is to manage the crowd. In a falling market, buyers set the pace. They can wait, they can walk away, and they can make offers that vendors don’t like, and sometimes still get the deal when the vendor runs out of options.
This is the opposite of the usual script. Agents are now spending more time managing vendor emotion than buyer competition. They’re having weekly conversations about falling valuations, and they’re working for weeks or months only to lose the listing when the vendor becomes disillusioned. All that work, no commission, and a competitor’s sign goes up in its place.
The buyers who do close are typically one of two types: the opportunistic low-ballers who are testing how far they can push, and the informed realists who understand the market’s boundaries and are prepared to act when the price is genuinely fair. The former risk missing the best buying conditions we’ve had in years by overplaying their hand. The latter are the ones walking away with the deals.
Who this favours and who it doesn’t
Patient buyers with pre-approval and no deadline have structural leverage right now. Vendor price expectations are stalling transactions across the market, and the longer a listing sits, the more room there is to negotiate. That doesn’t mean every property will accept a 15 per cent discount, but it does mean the power dynamic has flipped.
Vendors who need to sell, because of a divorce, a job move, or because they’ve already committed to another purchase, are the ones who will crack first. Agents know which listings are under pressure, and buyers who ask the right questions can identify them too.
First home buyers who are waiting for a mythical bottom are the ones missing out. The market doesn’t ring a bell at the low point, and by the time sentiment shifts, competition is back and prices are moving. The best buying conditions are the ones where no one else wants to buy, and that’s now.
What could shift the balance back
If rates drop sharply, buyer confidence will return, and so will competition. If clearance rates climb above 65 per cent for three consecutive weeks, it’s a sign that vendor expectations have reset and deals are closing again. If unemployment rises above 4.5 per cent, more forced sales will enter the market, and that will push prices lower in pockets with high mortgage stress.
None of those are certainties. The base case is a long, grinding adjustment where vendors slowly accept lower prices and buyers slowly gain confidence. The downside is a sharper correction if credit conditions tighten further. The upside is a faster recovery if rates fall before the end of the year.
What to do if you’re in the market now
Make offers. Not insults, but real offers based on comparable sales from the last 60 days, adjusted for condition and location. If the vendor says no, move on. If they counter, you’re in a negotiation, and that’s where buyer power shows up.
Don’t wait for a 30 per cent discount unless you’re buying in a regional market that’s already correcting hard. In metro markets, the realistic range for a sharp buy is 7 per cent to 12 per cent below peak, depending on the suburb and the vendor’s urgency.
Watch for listings that have been on the market for more than 30 days. That’s the signal that the asking price and the market price aren’t aligned, and that’s where the negotiating room lives.
If you’re working with a buyers agent, make sure they’re tracking vendor timelines, agent turnover on listings, and comparable sales that haven’t been cherry-picked. The agents who are surviving this market are the ones who can model conservative scenarios and keep their clients calm when the headlines get loud.
Subscribe to the newsletter for weekly updates on clearance rates, negotiation benchmarks, and the next signals that the balance is shifting.
General info, not financial advice.
