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Australia’s housing downturn may be approaching an important inflexion point, with buyer activity beginning to recover in some of Sydney and Melbourne’s most expensive suburbs - historically the parts of the market that often turn first.
Ray White Chief Economist Nerida Conisbee says premium housing markets, which suffered some of the largest price falls over the past year, are now showing early signs of stabilisation.
The shift matters because premium property has often led previous housing cycles, particularly in Australia’s two largest property markets - Sydney and Melbourne.
The details
Ms Conisbee says Ray White’s open-home data provides one of the clearest early indicators that conditions are changing.
Ray White - Australia’s largest real estate agency network - tracks about 13,000 open homes every week.
National attendance fell sharply during the first half of 2026, from around 4.5 people per open home in January to about two by July.
Since then, the decline has stopped, with average attendance edging back to about 2.2.
“The housing downturn is starting to shift,” Ms Conisbee writes.
“Premium markets, which have experienced some of the largest price falls over the past year, are beginning to stabilise, while demand is weakening across a number of more affordable, investor-heavy markets.”
The improvement is most obvious in Sydney and Melbourne.
Sydney is now averaging around 2.3 attendees per open home, about 0.2 more than immediately before the May Federal Budget.
Melbourne has recovered to roughly its pre-Budget level at 2.2.
Over the past eight weeks, attendance has risen by 0.31 in Sydney and 0.17 in Melbourne.
By contrast, Brisbane, Adelaide and Perth remain well below their pre-Budget levels.
Prestige suburbs lead the improvement
The strongest increases are concentrated in some of the country’s most expensive housing markets.
Since the Budget, attendance in Sydney’s Eastern Suburbs has increased by 0.8 people per open home.
Melbourne Inner South, North Sydney and Hornsby, and Melbourne Inner East have each increased by about 0.6 attendees per open home.
These are also markets that experienced some of the steepest falls during the downturn.
Ms Conisbee argues this is significant because substantial price corrections are beginning to entice owner-occupiers back into areas that previously looked too expensive.
At the same time, some more affordable markets are losing momentum.
Adelaide South is down 2.9 attendees per open home, Perth North West 2.4, Perth North East 1.7 and Cairns 1.4.
“The broad shift is becoming increasingly evident: buyer engagement is strengthening in markets where prices have already adjusted significantly, while it is weakening across a number of areas that had previously been relatively resilient,” she writes.
Prices beginning to follow
The early improvement in buyer traffic is also beginning to appear in actual prices.
Ray White says Sydney’s Eastern Suburbs recorded monthly price growth of 1.1% in August, while North Sydney and Hornsby rose 1%.
Ryde, the Inner West and Northern Beaches were all up by about 0.8%.
Those areas remain well below year-ago levels, generally by between 6% and 8%, so Ms Conisbee cautions that this is still an early shift rather than a full recovery.
Nevertheless, the combination of improving inspection attendance and firmer prices is worth noting.
Premium markets turn first
There is precedent for the pattern.
Domain research into earlier Sydney and Melbourne housing cycles found that the top end of Melbourne’s market had repeatedly led broader recoveries.
The pattern was also visible in Sydney, although less consistently.
During the 2017–19 downturn, premium markets were among the first to weaken, before more expensive property led the subsequent rebound.
Domain concluded that premium areas “tend to lead price cycles”, falling harder during downturns but also recording stronger gains during the upswing.
Higher-priced buyers tend to be more sensitive to financial-market conditions, confidence and changes in borrowing costs.
Premium properties are also more discretionary purchases, meaning affluent buyers can retreat quickly when conditions deteriorate and return quickly when relative value improves.
Recent reporting also points to renewed prestige activity, with agents in Sydney and Melbourne describing stronger enquiry and transaction levels after a weak start to 2026.
The take-out
Australia’s housing market is still clearly in a downturn, but housing cycles rarely turn everywhere at once.
Historically, the first signs of recovery have often appeared in expensive Sydney and Melbourne markets before spreading more broadly.
That makes the recent lift in open-home attendance and prices in premium suburbs worth watching.
As Ms Conisbee puts it, “It remains a fragile recovery.”
But for now, she says, “the direction is becoming more positive.”
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