More Listings, More Distress, More Leverage: Where Property Buyers Should Look in 2026
Australia’s property market is becoming more favourable for well-prepared buyers.
Property listings are rising, distressed sales are increasing and homes are taking longer to sell. Investor borrowing has also weakened, potentially reducing competition for renovation projects, mortgagee sales, deceased estates and other value-add opportunities.
More properties are coming onto the market
SQM Research reported that Australian residential listings increased by 12.4% during July 2026 to 278,984 properties—22.8% higher than a year earlier.
Melbourne recorded a particularly large annual increase, while Brisbane, Adelaide and Canberra also experienced strong monthly growth.
More listings give buyers greater choice and reduce the pressure to make rushed decisions. Properties that remain unsold for longer may also present opportunities to negotiate on price or settlement terms.
Distressed listings are rising
Australia recorded 4,330 distressed property listings in July, marking the third consecutive monthly increase.
The largest monthly increases occurred in South Australia, Queensland and Western Australia. South Australia’s distressed listings rose by 11.8% during July and were 31.4% higher than a year earlier.
A distressed property is not automatically a bargain. However, mortgagees, receivers and other motivated vendors may value a reliable offer, short settlement period and strong finance position.
Buyers should still arrange legal advice, building and pest inspections and careful contract reviews.
Selling conditions are weakening
Cotality reported that Australian dwelling values fell by 0.7% in July—the largest monthly decline since December 2022.
The median time required to sell a property increased to 35 days, while average vendor discounting widened to 3.8%. Auction clearance rates also fell from approximately 66% in February to the low-40% range by the end of July.
These conditions may give buyers more time to investigate renovation costs, planning controls, rental returns and comparable sales before making an offer.
Properties that pass in at auction or remain unsold after a lengthy campaign may deserve another look, particularly if the vendor becomes more realistic about price.
Less investor competition
The Australian Bureau of Statistics reported that the value of new investor housing loans declined by 10.2% during the June quarter. The number of investor loans fell by 8.6%.
This may reduce competition, but buyers still need to arrange finance early—especially when pursuing mortgagee, estate or time-sensitive sales.
Finance can be more difficult for unfinished, damaged or uninhabitable properties. Buyers should confirm their lender’s requirements before exchanging contracts.
Where should buyers look?
Several markets may be worth monitoring:
South Australia: The strongest monthly increase in distressed listings.
Queensland: Rising distressed stock and softer Brisbane values.
Victoria: Significantly more properties available, particularly in Melbourne.
ACT: A substantial annual increase in distressed listings from a smaller base.
New South Wales: Longer campaigns may create opportunities among renovators and poorly presented homes.
Local market conditions, insurance costs, planning restrictions and rental demand must still be assessed carefully.
Look for manufactured equity
In a softer market, buyers should focus on properties where value can be created rather than relying entirely on general price growth.
Potential strategies include:
Completing a targeted renovation
Improving an inefficient layout
Adding a bedroom or bathroom
Creating a legitimate second rental income
Building an approved secondary dwelling
Subdividing suitable land
Activating an existing development approval
All expenses—including stamp duty, finance, professional fees, approvals, construction, insurance and selling costs—should be included in the feasibility assessment.
The opportunity is in the negotiation
Rising listings and longer selling periods do not mean every property will be a bargain. They do, however, give disciplined buyers more choice, more time for due diligence and potentially greater negotiating power.
The strongest opportunities are likely to be properties overlooked because of poor presentation, repair requirements, an unfinished project or underutilised land.
The goal is not simply to buy cheaply. It is to purchase at a price that leaves enough room for improvement costs, holding expenses and unexpected problems.
That is where prepared value-add buyers may find their advantage in Australia’s changing 2026 property market.
Property information and market conditions can change. Buyers should obtain independent legal, financial, planning and building advice before purchasing.
Sources: SQM Research — July 2026 Total Property Listings, Cotality — August 2026 Housing Chart Pack, ABS — Lending Indicators
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Published by:
Nick Karayanis B.Eng. UNSW (Civil)
Licensed Contractor NSW (Building)
Disclaimer:
The content of this blog is for informational and educational purposes only and should not be considered professional financial, legal, or real estate advice. Every real estate transaction and renovation project is unique, and you should consult with qualified professionals, such as real estate agents, contractors, and legal advisors, to address your specific needs and circumstances. The information provided here is based on personal experiences and research and may not reflect current market conditions or regulations in your area. Readers assume all responsibility for decisions made based on the content of this blog.
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