Sydney Home Prices Fall as Investor Demand Drops, Allowing First Buyers to Purchase at Discount

Lena and Linly purchased a two-bedroom flat in Ashfield in Sydney’s inner west for $922,000 on Saturday after it passed in below a $950,000 reserve. The 31-year-olds negotiated the final price following six weeks of property searches and succeeded on their first auction bid. The flat sold at a $28,000 discount.

No investors placed bids against the couple. ” The couple relied on Linly’s parents’ financial assistance, the federal 5% deposit scheme, and New South Wales’ stamp duty discount to complete the purchase. Linly added that negative gearing continues to constrain buyers.

“Even with all the investors being scared off, we’re still being squeezed,” he said. “Negative gearing has squeezed us into a place that’s pretty punishing. ” Investors accounted for 57,000 new home loans, or two in every five, in the first three months of 2026.

Mortgage applications from investors at brokerage Loan Market fell 23% in May, while first-home buyer applications dropped 12% over the same period. Most homes listed for auction in the last week of May failed to sell, according to Cotality data. Preliminary auction clearance rates declined further in the first week of June.

In Melbourne’s inner north, two young couples bid on a two-bedroom cream brick unit in Brunswick East on Saturday. The higher offer reached $720,000, below the vendor’s reserve. Ray White agent Matthew Schroeder confirmed the higher-bidding couple purchased the property after extended negotiations.

Vinda, 37, purchased a house in Northcote earlier this year with parental support. She said most of her friends seeking their first home will also receive family assistance. 72 million on Saturday to a couple from a neighbouring suburb.