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You Don’t Need the Bottom. You Need a Good Enough Price.
Trying to buy at the bottom of the property market? Discover why "low enough" beats perfect timing for long-term property investors.
At the beginning of this year I wrote that the Australian property market looked like it was approaching the top of the current cycle in the State of Play 2026. That top has now passed and the correction is well underway. Cotality‘s latest figures show national home values falling for a fifth consecutive month, with 93% of capital city suburbs recording a decline through winter. Sydney is now 7.1% below its February peak, sales volumes are 15.5% lower than a year ago and advertised stock across the capitals is 24% higher. Buyers have considerably more negotiating power than they did near the top of the cycle, but confidence has weakened at roughly the same time.
I don’t find the correction particularly surprising. Property markets move through cycles, affordability eventually becomes restrictive, demand slows and prices reset. The more interesting question now is what an investor should actually do while that process is still happening, because everyone would obviously prefer to buy at the exact bottom. If we knew a property selling for $800,000 today would be available for $750,000 six months from now, we would simply wait. Markets unfortunately don’t give us the rest of the chart in advance.
That thought came to me recently while I was working on something that had absolutely nothing to do with property.
Hard Enough
I’ve been building a longitudinal model to track my kids’ Sanda performances over time. Sanda is essentially a Chinese combat sport combining striking and wrestling and judo style throws, and the model looks at things such as strike velocity, retraction speed, changes in angle, positional hierarchy and who initiates contact. I wasn’t trying to work out who could throw the hardest punch. I was trying to understand what actually produces a successful exchange.
One thing becomes obvious fairly quickly when you watch beginners fight. They tend to throw everything as hard as possible, loading up every punch or kick as though it needs to end the fight. In doing that they often give away speed, timing, balance, position and the ability to recover if the shot misses. More experienced fighters tend to become much more economical because they understand that maximum power is only useful if the strike actually arrives in the right place at the right time.
A strike has to be hard enough to achieve its purpose, while preserving everything else that matters around it. A slightly lighter shot that lands cleanly, leaves you balanced and keeps you in control of the exchange is usually more useful than a perfect knockout shot that misses.
The same problem appears when investors try to pick the exact bottom of a market.
The Completed Chart Flatters Hindsight
Historical property charts make market timing look much easier than it actually was. Looking at the Sydney data below today, the turning points around previous corrections are easy to identify. Auction clearance rates weaken, price growth moves negative, conditions deteriorate and eventually the market changes direction.
The completed chart flatters hindsight because an investor standing in late 2018 could see falling prices and deteriorating auction conditions, but they couldn’t see 2019. Someone making the same decision in 2020 didn’t know exactly how quickly conditions would change, and neither did an investor looking at another downturn in 2022. We can see the whole sequence now, so those turning points appear as neat points on a line. At the time they were simply periods of uncertainty inside markets that were still falling.
That’s roughly where we are again. We know prices have fallen, we know the correction has spread across almost the entire capital-city market and we know prices can continue falling from here. What we don’t know is whether the eventual low is six months away, eighteen months away or whether individual markets begin finding their bottoms at quite different times.
Buying now therefore carries the risk that prices fall further, while waiting carries the risk that the market turns before the price you were hoping for ever appears. Neither strategy removes the uncertainty. It just leaves you exposed to a different part of it.
This matters because the current market has already moved far enough to create materially better buying conditions in some areas. Cotality is reporting longer selling times, larger vendor discounts, persistently weak auction clearance rates and elevated advertised supply, all of which point to buyers having more bargaining power. At the same time those buyers are reluctant to transact because they are worried the market has further to fall.
That behaviour is fairly predictable. People say they want to buy when property is cheap, but what they usually want is cheap property accompanied by convincing evidence that prices are about to rise. Once that evidence becomes obvious, confidence begins returning, buyers start competing with each other again and part of the discount disappears.
There is a point where waiting for a better price remains sensible and another where the attempt to optimise the last few percent starts increasing the risk that you don’t transact at all. Perfection is the enemy of execution. Trying to buy at the absolute bottom sounds disciplined because mathematically it is the best possible entry, but the strategy depends on recognising a turning point that is normally visible only after the market has moved through it.
A Good Price Still Has to Be Attached to a Good Asset
This doesn’t turn falling prices into an investment strategy. A property can be cheaper because it was overpriced to begin with, because the local fundamentals have deteriorated or because the broader market is repricing risk. The purchase price still sits alongside yield, supply, affordability, location, depth of demand and the long-term economic position of the market.
That is where the combat model became useful to me conceptually. Strike power is one variable inside a much larger system. Increasing it can improve the result up to a point, but if the extra power costs too much speed, balance or position, the overall exchange gets worse. Entry price works in much the same way. Paying less is obviously preferable, but trying to optimise price to the exclusion of everything else can eventually make the overall investment decision worse.
There is also a practical reason entry price matters so much in property: it stays embedded in the investment for as long as you own it.
If two investors buy identical properties and one pays 5% less, they begin with different economics. The lower-cost buyer needs less capital or less debt and receives a higher rental yield relative to the price they paid. If both properties eventually sell for the same amount, the lower entry also produces the stronger total return from that same exit value. The market itself may subsequently grow at exactly the same rate for both properties, but the investor’s realised return is being measured from a different starting point.
Over a fifteen or twenty-year holding period, that starting point matters.
Suppose someone buys a good asset during the current correction and watches it fall another 4% over the following six months. They may well have mistimed the exact bottom, but a timing miss inside a sound decision is not the same thing as a poor investment. If the property was acquired at a meaningful discount to the peak, produces an attractive yield, sits in a market with strong long-term fundamentals and ultimately performs over the intended holding period, the fact that somebody else could theoretically have bought it a few percent cheaper may eventually become little more than a footnote.
There is an enormous range between buying at the peak and perfectly identifying the trough. Good investing can happen somewhere in between.
Where We Are Now
I still think the broader Australian property market has further to work through. Cotality’s latest data shows the weakness spreading rather than narrowing, with higher-priced property generally still performing worse but lower-priced housing becoming less insulated as softer demand moves through the market. Sydney continues to lead the falls, while Melbourne, Brisbane, Adelaide and Perth have all recorded declines as well.
I wouldn’t be surprised if the broader bottoming process takes another year or two to fully play out, although I also don’t expect every city, suburb or price segment to turn at the same time. Australia’s property market has never behaved as one perfectly synchronised market, so some areas will probably still be falling while others have already begun recovering.
That makes waiting for a clean national signal difficult. By the time there is enough evidence to say confidently that the Australian market has bottomed, some individual markets may already have been moving for months.
This is why I keep coming back to the idea that started the whole article. Experienced fighters stop trying to make every strike as powerful as physically possible because they learn that the outcome is determined by the whole exchange. Power matters, but so do timing, accuracy, balance, position and what happens immediately afterwards.
Investing works the same way. Entry price matters enormously, but it sits alongside the quality of the asset, yield, supply, affordability, location, long-term demand and how long you intend to own it. The market may give you a better price six months from now, perhaps a much better one, or it may begin moving before the price you had in mind ever appears. We won’t know until we can see the rest of the chart.
What we can judge today is whether the asset is good, whether the price has already moved far enough to create value and whether the long-term return compensates for the uncertainty that remains. In combat sports the strike doesn’t have to be perfect; it has to be hard enough while preserving everything else that makes the exchange work.
For an investor, the equivalent is a good enough price on a good enough asset that the long-term mathematics already make sense, even if somebody else eventually manages to buy a little cheaper.
Ready to make sense of where the market stands right now? Book a discovery call with Blue Wealth Property today.
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