Is It a Good Time to Buy Investment Property in 2026?
Property values have fallen for six months straight, headlines are talking about a crash, and the Reserve Bank has just raised interest rates again. If you’ve been asking whether it’s a good time to buy investment property in 2026, you’re not alone. It’s the question Julian Khursigara, founder of Search Party Property and a 2025 REB Awards finalist for Buyers Agent of the Year, hears most often right now.
His answer surprises people. The timing matters less than whether you can comfortably hold the right property on today’s rules. This article walks through what the market is actually doing, what changed for investors this year, and a simple test to decide whether you should buy, wait or rethink your plan.
What is the Australian property market doing in 2026?
National home values are falling, but not evenly. Cotality’s Home Value Index fell 1.1% in September 2026, the sixth consecutive monthly decline, leaving values 5.2% below the March peak.
The key numbers as at the September 2026 index:
| Measure | Figure |
|---|---|
| National monthly change (September) | -1.1% |
| National decline from March 2026 peak | -5.2% |
| Capital city suburbs recording a fall (three months to September) | 97% |
| Sydney decline from February peak | -8.6% |
| Only capital still rising | Darwin (+0.4%) |
| Median days to sell, capital cities | 39 days (23 a year earlier) |
| Home sales, three months to September | -19.1% year on year |
| Combined regional values, annual change | +5.6% |
Source: Cotality Home Value Index, September 2026 (released 1 October 2026).
Two details matter for investors. First, homes are taking longer to sell, which gives buyers more negotiating room. Second, Cotality has reported that the more expensive end of most capital city markets has been weaker than lower-priced housing through this downturn, although that gap has narrowed as the falls have spread.
Is a property market crash coming in Australia?
Nobody can reliably predict a crash, and this article won’t try. What the data shows so far is a broad correction, not a collapse, with the steepest falls at the top end.
Julian’s view, shared on the Geared for Growth podcast, is that the fear doesn’t match where most investors actually buy:
“The bottom of the market doesn’t move very much at all.”
In his experience, someone selling a $5 million home has much further to fall than someone buying a $650,000 home in a demand-driven suburb. Investors waiting for a 30% discount on a sub-$1 million property may be waiting a long time.
| What the headline says | What investors should check |
|---|---|
| “Property market crash” | Which price bracket and which city is actually falling |
| “Values down X% nationally” | How your target suburb compares to the national figure |
| “Buyers are disappearing” | Days on market and vendor discounting in your target area |
| “Investors are out” | Whether owner-occupier demand still supports the area |
What changed for property investors in 2026?
Three things reshaped the investor landscape this year: tax law, super rules and interest rates.
Negative gearing and CGT. The reforms are now law. For established homes bought after 7:30pm on 12 May 2026, net rental losses can no longer be offset against salary from the 2027–28 income year. Those losses are quarantined, not abolished: they can still be used against other residential rental income or carried forward. Properties held before Budget night are grandfathered, and eligible new builds are exempt. See our guide to new build vs established investment property after the 2026 negative gearing changes for what this means in practice.
SMSF borrowing. New limited recourse borrowing arrangements for residential property are banned from 10 August 2026. Existing arrangements are grandfathered.
Interest rates. On 29 September the Reserve Bank raised the cash rate by 0.25 percentage points to 4.60%, with trimmed mean inflation holding at 3.6%. The Board said it could lift rates further if needed.
None of these changes means property stops working as an asset. They do mean the old default of “buy an established house and let negative gearing carry the gap” no longer works for new purchases.
Should you wait for prices to fall further?
Waiting has a cost too, and most people underestimate it. Julian describes the property market as a domino effect: people eventually have to move for work, schools, family or downsizing. As those moves happen, the dominoes fall and activity returns.
“We all have to eventually make a move.”
He expects that activity to show up first among owner-occupiers, not investors. Owner-occupiers typically make up the majority of transactions, which is why areas that appeal to them tend to hold up better in a downturn.
Waiting can make sense. It rarely makes sense as a strategy on its own. The better question is whether you can buy the right property and hold it through whatever the next two to three years bring.
The Hold Test: how to decide whether to buy now
The Hold Test is how Search Party Property approaches the timing question with clients. It replaces “is the market right?” with “is this purchase right for me?”
| Step | Question | What passes |
|---|---|---|
| 1. Set the goal | What is this property meant to do for you in the next 10 years? | A clear, written goal (growth, income, a specific portfolio size) |
| 2. Compare side by side | How do a new build and an established property compare on cash flow and growth? | A like-for-like cash flow comparison, not a sales brochure |
| 3. Stress-test the hold | Can you carry the repayments without relying on negative gearing, and with a higher rate? | A buffer you’d be comfortable living with |
If a purchase passes all three steps, falling headlines matter much less. If it fails step 3, the answer isn’t necessarily “wait”. It may be a different property type, price point or location.
Who should wait before buying?
Honest answer: some people should. Consider holding off if:
- A further rate rise of 0.25% to 0.50% would stretch your budget uncomfortably.
- You’d need negative gearing on an established property to make the numbers work.
- You don’t yet have a clear goal for what the property needs to achieve.
- Your finance pre-approval hasn’t been checked against current lending rules.
Julian’s first step with clients isn’t a suburb list. It’s checking access to finance. As he put it on Geared for Growth: “Do you have access to finance? Let’s go and check that out first.”
What Search Party Property is seeing on the ground
Most investors aren’t walking away from property. They’re taking a breath. Julian describes clients reviewing their rates, checking available equity from properties bought in earlier years, and mapping out their portfolio plans while conditions are slower.
The opportunities SPP is pursuing sit in specific pockets rather than whole cities. That includes selected areas of Melbourne, regional Victoria and infrastructure-led parts of Brisbane.
So, is it a good time to buy investment property in 2026?
It can be, for the right buyer with the right plan. Conditions currently favour buyers: more stock, longer selling times and less competition from other investors. The risk isn’t buying in a soft market. The risk is buying the wrong property, or one you can’t comfortably hold.
Start with your property investment strategy, then the property. If you’d like the Hold Test run on your own numbers, book a Property Investment Roadmap Session.
Frequently asked questions
Is it a good time to buy investment property in 2026?
It depends more on your finances than on the market. Values are falling and selling times are longer, which can favour buyers. The deciding factor is whether you can hold the property comfortably under the new tax rules and at higher interest rates.
Will the Australian property market crash in 2026?
No one can predict that reliably. National values were 5.2% below their March 2026 peak as at September, with the largest falls at the top end of the market. A correction is under way, but its depth will vary by city, suburb and price point.
Are property prices falling everywhere in Australia?
Almost. In September 2026, every capital city recorded a fall except Darwin, and 97% of capital city suburbs declined over the three months to September. Combined regional values were still 5.6% higher than a year earlier.
Does the negative gearing change mean I shouldn’t buy an established property?
Not necessarily. For established homes bought after 12 May 2026, rental losses are quarantined from 1 July 2027, not abolished. Whether an established property still suits you depends on whether you can carry it without that tax offset. Speak to your accountant about your situation.
Should I wait for interest rates to fall before buying?
Rates rose to 4.60% in September and the Reserve Bank has said it could lift them further. A safer approach is to test whether you could hold the property at a higher rate than today’s, rather than timing the rate cycle.
What is the Hold Test?
It’s Search Party Property’s three-step check: set a clear goal, compare new and established options side by side, and stress-test whether you can hold the property without relying on negative gearing.
Is it better to buy now or wait until next year?
Julian expects activity to pick up as people’s life changes force moves. Waiting for a particular season or year matters less than having finance, a strategy and a shortlist ready when the right property appears.
Disclaimer: This article is general information only and does not constitute financial, tax or legal advice. It does not take into account your objectives, financial situation or needs. Past performance is not an indicator of future performance. Consider seeking independent professional advice before making investment decisions.
Sources: Cotality Home Value Index, September 2026 (released 1 October 2026); Reserve Bank of Australia, monetary policy decision, 29 September 2026; ATO, “Reforming negative gearing and capital gains tax”; Acumentis, “Passed: What the New CGT and Negative Gearing Laws Mean for Property Owners” (SMSF LRBA); Geared for Growth podcast, MCG Quantity Surveyors, recorded 17 September 2026.
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Disclaimer: This article provides general information only and does not constitute financial, tax, or investment advice. Past performance is not an indicator of future performance. Property investment outcomes vary based on individual circumstances and market conditions. Always seek professional advice from a qualified financial adviser, tax agent, or buyers agent before making investment decisions. Policy detail reflects the negative gearing and CGT reforms announced in the Federal Budget on 12 May 2026 and passed by Parliament in June 2026. Always confirm how they apply to you with a qualified adviser.