Melbourne’s property market seems to have shifted in favour of buyers. Properties are taking longer to sell, vendors are becoming more willing to negotiate and buyers have more time to consider their options.
But how can you make the most of these conditions when buying your next Melbourne home? And how can you negotiate a deal without risking the property you really want?
This article is general information only and does not constitute financial, legal or tax advice. We recommend seeking advice from a qualified accountant and solicitor before making any decisions.
What is happening in Melbourne’s property market?
There are several signs that Melbourne buyers now have the upper hand. The number of properties for sale has increased, with Melbourne’s total listings up 17.3% annually in October 2026, according to SQM Research.
With more properties to choose from, homes are taking longer to sell. Cotality found that the median number of days a dwelling spent on the market in the three months to September was up to 42 – a considerable increase from 28 a year earlier.
Sellers are also becoming more flexible on price. According to Cotality, the median vendor discount in Melbourne over the three months to September was 3.8%, up from 3.0% a year earlier.
Meanwhile, property values have continued to fall. Melbourne dwelling values fell 7.6% over the 12 months to October.
Of course, the picture isn't the same everywhere. Conditions can vary considerably between suburbs, price brackets and property types.
Where do you have room to negotiate?
The asking price is an obvious place to start. But before making an offer, do your homework. Look at what comparable properties have sold for recently, how long the home has been listed and whether the seller has already reduced the price.
To put the current vendor discounts into perspective, 3.8% off a property initially listed at $1.5 million works out to $57,000. At last year's 3.0%, it would have been $45,000. That's a difference of $12,000.
These figures give you an idea of how much more sellers are discounting, although the actual room to negotiate will depend on the specific property.
And don't focus solely on price. You may be able to negotiate terms that suit your circumstances. For instance, if you need to sell your current home, a longer settlement could give you more time to find a buyer. Or if the vendor has already bought elsewhere, offering a shorter settlement might help you secure a deal on the price.
You could also ask about a smaller deposit, particular fixtures or appliances being included in the sale or changes to contract conditions. Your solicitor or conveyancer should review any proposed terms before you commit.
There may be opportunities at auction, too. In the last week of October 2026, Melbourne’s clearance rate fell to 44.3% across 517 auctions, according to Cotality. That was the city’s lowest result since late June and 16.9 percentage points below the same week in 2025.
If a property passes in, you may be able to negotiate with the seller afterwards, although other interested buyers could still be competing for it.
Not every vendor will negotiate
Before you start making low offers, remember that some properties are still attracting plenty of interest. Well-located homes in sought-after school zones and established family suburbs can still attract competition. Some vendors may also be under little financial pressure to sell.
Melbourne’s price falls have also been milder than in other major capitals. Cotality reported that dwelling values fell 0.8% between September and October, which was around half the rate of decline recorded in Sydney, Brisbane and Perth.
Buyers may not have as much negotiating power in every market or price bracket. So be realistic about your offer. An excessively low bid could mean missing out on a desirable property, particularly if other buyers are interested.
Take your cues from the property itself. How long has it been on the market? Has the asking price changed? Does the seller need to move quickly? The answers can help you decide how hard to negotiate.
If you’re upgrading, you’re on both sides of the market
If you’re selling your current home to buy a bigger or better one, the conditions that help you negotiate your next purchase could also affect the price you get when you sell.
However, there may be some good news if you're moving up the property ladder. Cotality’s September quarter data shows that Melbourne dwelling values in the highest-priced 25% of the market fell 4.4%, compared with 3.0% across the middle 50% and 1.3% in the lowest-priced quarter.
In other words, more expensive homes have fallen further in value. That could make upgrading more affordable, particularly if the gap between what you sell for and what you buy for has narrowed.
You'll still need to work out the numbers for your particular properties, though.
You'll also need to decide whether to buy or sell first. Buying before selling can give you more time to find the right home, but you could end up paying two mortgages if your existing property takes longer than expected to sell.
Bridging finance may help, but it’s important to understand the costs and what happens if your home doesn’t sell as quickly as planned.
Having your finance organised can strengthen your position
Imagine a seller receives two similar offers. One buyer has their finance organised, while the other still needs to speak to a lender. Who would you expect the seller to favour?
That's why it's helpful to arrange home loan pre-approval before you start making offers.
Pre-approval gives you an indication of what you may be able to borrow, so you can search within a realistic budget and be ready to act when you find the right property.
But keep in mind that pre-approval is conditional and usually expires after a few months. Your lender will still need to complete its checks, including assessing the property, before giving formal approval.
Rising interest rates are another reason to check your pre-approval is up to date. The Reserve Bank of Australia raised the cash rate to 4.85% on 3 November, the fifth increase this year. This is likely to have impacted your borrowing capacity, which means your pre-approval might need updating.
If you’re upgrading, a mortgage broker can also help you work out how much equity you can use, what happens to your existing mortgage and whether you can afford to buy before you sell.
Be ready when the right property appears
Melbourne's softer selling conditions may give buyers more time to inspect properties, research comparable sales and negotiate a deal. But when the right home comes along, you still need to be ready to move, and getting your finance sorted early means one less thing to juggle alongside work and family.
At AXTON Finance, we work with a panel of more than 30 lenders to help Melbourne buyers understand how much they can borrow, compare home loans and arrange finance before they start negotiating, whether they’re upgrading the family home or buying an investment property.
This article is general information only and does not constitute financial, legal or tax advice. We recommend seeking advice from a qualified accountant and solicitor before making any decisions.
Planning your next property purchase? Speak to the team at AXTON Finance today on 03 9939 7576, email getabetterrate@axtonfinance.com.au or get in touch.
