House prices are falling.
Sydney values dropped 1.4% in September alone. Melbourne fell 0.7%. Nationally, it was the sixth fall in a row, according to Cotality’s Home Value Index.
If you’re renovating right now, it shouldn’t be business as usual.
When house prices are falling, renovators need two things: buffers to survive the dip, and a plan to catch the rise when it comes. I call it the buffer and boost strategy.
Here’s how it works – and the Bondi flip that taught me the boost part the hard way.
What Falling House Prices Mean for Renovators
Ignore the national headline
Those headlines about “X% wiped off the market Australia-wide”?
Rubbish. Or at least, not much use to you.
Some areas are rising while others are plummeting. A two-bedroom unit and a four-bedroom house behave differently. So do inner-city and regional markets.
The only market that matters is the one your property sells in.
Buyers are fickle, and selling takes longer
In a falling market, buyers take their time. They negotiate harder. Some walk away at the last minute.
That means longer holding costs – interest, rates, strata, insurance – for every week your property sits unsold.
If your numbers only work with a quick sale at a top price, they don’t work.
The Buffer and Boost Strategy
Buffer 1: buy well, and know your local market
Your profit is made when you buy.
Buying well under value is the buffer that holds you in a falling market. It gives you room if prices drop while you renovate.
So do the homework. What’s selling in your area? What are buyers actually paying? Not what agents hope for. What sold.
Buffer 2: make sure you can hold
This is a rule I’ll never stop banging on about.
If you want to flip, you must be willing to hold.
Never bank on selling on your own timeline. Work out how long you could carry the property if it didn’t sell – and how you’d cover the costs.
I own my styling furniture so I can switch a property to Airbnb in a snap. That’s my holding plan. There’s more on it in why owning styling furniture is your insurance policy.
The boost: be ready for the rise
After a downturn bottoms out, prices often rise quickly. We saw it in 2019 and again in 2023.
If you can hold through the dip, you’re in place for the rise.
Our Bondi Flip: The Boost We Missed
In 2019 we renovated a two-bedroom apartment in Bondi.
Ready to sell – and clearly about to lose money. Lots of it.
So we put it on Airbnb and held for about six or seven months. When the market turned, we sold and made our $100,000 profit.
The buffer worked.
The kicker?
The buyer held it for 18 months. Did nothing to it. Didn’t even style it.
And made more than we did – I think a couple of hundred thousand.
She caught the boost. We didn’t.
That one still stings.
Greedy When Others Are Fearful?
Easy for Warren Buffett to say
“Be fearful when others are greedy, and greedy when others are fearful.”
Warren Buffett said it.
It’s easy to say when you’re Warren Buffett. Not so easy when it feels like your future is on the line.
But hear me out.
What opportunities does this market hold for you?
When prices are falling, it’s worth asking:
- Is there a good property you couldn’t afford when buyers queued around the block, with room to negotiate now?
- Is there potential other buyers miss – a floor-plan change, an extra bedroom or bathroom, a tired home that would respond to a thoughtful update?
- Could you earn extra income from a space you already own?
For me, applying the Buffett rule takes curiosity and serious homework.
A cheap property is not always a good deal
Here’s the trap.
A cheap property with expensive problems is like buying yourself a second job.
An unpaid one.
You don’t need to predict the market perfectly. You do need a safety net. Know your numbers, include your holding costs, and have a plan B before you sign.
Renovating When House Prices Are Falling
Falling prices don’t mean stop. They mean slow down and check your buffers.
Buy well. Make sure you can hold. Be ready for the boost.
If you’re weighing up whether to renovate, sell, hold or stay put in this market, Your Home’s Retirement Plan walks you through the options side by side.
Not financial advice. Speak with a qualified broker or financial adviser about your circumstances.
House Prices Falling: Your Questions Answered
Are house prices falling in Australia?
Yes. Cotality’s Home Value Index fell for the sixth month in a row in September 2026, with Sydney and Melbourne both down. Results vary a lot by area and property type.
Is it a good time to renovate when prices are falling?
It can be, if you buy well and can hold. Falling markets can mean better buying, but selling may take longer, so build holding costs into your numbers.
What is the buffer and boost strategy?
Buffers protect you in a dip: buy well under value and be able to hold. The boost is the rise that often follows a downturn, which you catch by holding long enough.
How do I protect a flip in a falling market?
Have a holding plan before you buy – renting it out, short stays or living in it – and make sure your numbers still work if it takes months longer to sell.
