If you’ve spent any time around Australian property news, you’ll have heard the terms “buyers market” and “sellers market” thrown around constantly. But what do they actually mean for the number that matters most — the price you pay or receive?
Let’s break it down using a real example: a property advertised at $700,000.
The Same Listing, Two Very Different Outcomes
Here’s the thing that surprises a lot of first-time buyers and sellers: the advertised price is really just a starting point for negotiation. What the property actually sells for depends heavily on which type of market you’re transacting in.
Scenario 1: Buyers Market — Deal Closes at $665,000 (5% Down)
In a buyers market, there are more properties for sale than there are buyers willing and able to purchase them. Sellers are competing for buyers, not the other way around.
In our example, the $700,000 listing eventually sold for $665,000 — a 5% reduction on the advertised price. Why would a seller accept less than they asked for? Because in a buyers market:
- Properties sit on the market longer, increasing carrying costs (mortgage repayments, rates, insurance)
- Buyers have multiple comparable properties to choose from, so they can walk away from overpriced listings
- Sellers who need to sell (relocation, financial pressure, divorce settlements) become more flexible on price to secure a deal
For buyers, this is the moment to negotiate hard, ask for building inspections, and not be afraid of a long settlement period that suits your timeline rather than the seller’s.
Scenario 2: Sellers Market — Property Valued at $770,000 (14% Up)
Flip the conditions, and the same $700,000 listing tells a completely different story. In a sellers market, demand outstrips supply — there are more buyers competing for fewer available properties.
In this scenario, a bank valuation came back at $770,000, approx. 14% above the original $ 665,000 purchase price. This typically happens when:
- Multiple buyers are bidding against each other, often pushing prices well beyond the advertised guide
- Low stock levels mean buyers feel pressure to act quickly or miss out
- Banks and valuers are responding to genuine sale evidence in the area, where comparable properties are also selling above expectations
For buyers, a sellers market means moving fast, having finance pre-approved, and being realistic that the “advertised price” is often a floor, not a ceiling.
Why This Matters: The $100K Equity Question
Here’s where it gets interesting for investors. In the buyers market scenario, a purchaser who secured the property at $665,000 with only 5% down has effectively bought into the market at a discount.
If that same market shifts — as property markets cyclically do — and conditions move toward a sellers market within 24 months, with capital growth running at around 7% per year, that buyer could be sitting on close to $100,000 in equity purely from the gap between their entry price and the market’s recovery.
This is the core principle behind countercyclical investing: buying when conditions favour buyers, and benefiting when conditions inevitably shift back toward sellers.
The Takeaway
The advertised price of $700,000 was never really “the price.” It was a starting point that could land anywhere from $665,000 to $770,000 — a swing of over $100,000 — depending entirely on market conditions at the time of negotiation.
Understanding whether you’re operating in a buyers market or a sellers market isn’t just useful trivia. It directly shapes your negotiation strategy, your timeline expectations, and ultimately, your long-term equity position.
Disclaimer: This article is general information only and does not constitute financial or investment advice. Property values and market conditions vary by location and over time. Always seek advice from a licensed professional before making property decisions.
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