Opportunity remains for entry level buyers - John McGrath

We’re now just nine weeks out from Christmas and home owners and renters are looking forward to some holiday breathing space after a difficult year for budgets around the country.

Yet amidst the current property downturn, hopes for a stabilisation next year remain and more confident buyers and sellers are returning to the market.

At the same time, this year’s festive gifts, parties and holidays may still need to take second place to mortgages, rents and other necessities such as food, utilities and fuel. There is also the possibility of more rate hikes before Christmas.

So, along with so much talk about cost-of-living pressures and prices, is there Christmas optimism in store for the lowest end of the market, including first-home buyers?

Firstly, across most of 2026, the affordable sector has remained resilient to the value declines experienced in the premium sector especially Perth, Adelaide and Brisbane.

In fact, this trend only changed in August when Cotality’s Home Value Index found that the lower-end price bracket had begun to fall.

As research director Tim Lawless explained, while premium markets still recorded weaker conditions, lower-priced housing was becoming less insulated as affordability pressures and softer demand weighed more evenly across the market.

This isn’t good news for real estate’s lowest sector. But it’s important to focus on the long-term staying power of this segment which has held up remarkably well in this correction.

Also, the current correction actually began about a year ago so based on historical data, this would indicate we’ll see a stabilisation in 2027 and perhaps even a movement back upwards.

For those who still don’t have the savings or deposit to purchase a property now, even utilising the many first home buyer government assistance programs on offer, you still have options.

For a start, you may have to cut back on your Christmas spending this year. If it helps however, you’ll be one of many people to do so including home owners and investors.

Plus, these savings along with other budgeting could mean that in 2027, you can enjoy the festive season in your own home.

If you’re planning to purchase a home before Christmas, you might also consider relocating to a regional town as the latest Cotality national figures show values in these areas are proving resilient to those of capital cities.

As Mr Lawless points out, while this doesn't make regional markets immune to higher interest rates, regional sales activity and values have held up better than their city counterparts. It also gives buyers more housing options to choose from.

Alternatively, you could consider rentvesting in either regional or suburban areas although the Budget’s policy changes to negative gearing and capital gains tax means this idea will be less appealing to some.

This is not forgetting what I’ve said many times: the real estate market always rises and falls over time. There is also no perfect time to purchase or sell either a premium or affordable property.

As we head towards Christmas and the New Year, it’s worth remembering that even a little extra discipline with spending over the festive season could help turn the goal of home ownership into a reality in the year ahead.