Should You Sell First or Buy First in a Falling Melbourne Market?
For upsizers, downsizers and homeowners trying to coordinate two property transactions, the Melbourne market headline is only half the story. The more important number is the gap between the property being sold and the one being bought.
If you are buying and selling in the same market, a falling market is not automatically working against you. For upsizers it usually works in your favour, because the discount on the more expensive property you are buying is larger in dollar terms than the loss on the cheaper one you are selling. The exception is a move from Melbourne to regional Victoria, where you would currently be selling into a falling market and buying into a rising one.
The question of whether to sell first or buy first has less to do with where the market is heading and more to do with the gap between the two properties involved.
The headline number is not your number
Melbourne’s median house value fell to around $970,000 in July 2026, down $5,000 over the month and 3.6% over the year, according to PropTrack’s Home Price Index. It was the fifth consecutive monthly decline, and 93% of Melbourne suburbs recorded a fall.
Most people read a figure like that and apply it to their own situation. It rarely fits.
Melbourne units fell just 0.2% in July, holding a median of $617,000, partly because first home buyer activity has propped up the lower price brackets. Houses fell 0.5% in the same month. Regional Victoria moved differently again, with house values up 4.8% over the year despite a marginal July dip.
Three different results, one city, one month. A downturn is an average of thousands of individual outcomes, and your trade sits somewhere inside that spread rather than on top of it.
That matters because delaying a move on the strength of a national headline can cost you more than the downturn does.
If you are upsizing in Melbourne
Upsizers are usually better off buying and selling in a falling market. This is arithmetic rather than optimism, and it is worth working through.
Say you sell for $970,000 and buy for $1.5 million.
A 3.6% fall reduces your sale price by roughly $35,000. The same 3.6% fall reduces the purchase price by roughly $54,000. You lose $35,000 on one side and save $54,000 on the other, leaving you around $19,000 ahead.
The reason is straightforward. The percentage applies to a larger number on the buying side, so it produces a larger dollar movement. A useful shorthand is that your benefit is roughly the size of the fall multiplied by the gap between the two properties. On a $530,000 gap, a 3.6% fall is worth about $19,000 to you. On a $900,000 gap it would be worth about $32,000. The wider the step you are taking, the more a soft market helps you take it.
This is also why waiting for a recovery tends to work against upsizers. When values rise, the more expensive property rises by a larger dollar amount than the one you are selling, and the gap you need to fund gets wider rather than narrower.
If you are downsizing from Melbourne to regional Victoria
This is the one group facing genuine time pressure, and it is the opposite of what most people assume.
Melbourne house values are down 3.6% over the year. Regional Victorian house values are up 4.8%, and regional units are up 6.3%, reaching medians of roughly $634,000 and $451,000 respectively.
If you are selling in Melbourne to buy in Ballarat, Bendigo, Geelong or along the coast, you are currently selling into a weaker market and buying into a stronger one. Every month that passes, the two move slightly further apart.
PropTrack senior economist Anne Flaherty has suggested this is structural rather than temporary. She notes that Melbourne’s supply of new homes “has been very much keeping up with population growth”, which she describes as “in stark contrast to capitals around the rest of the country”, while much of regional Victoria remains undersupplied and continues to attract population growth. If that holds, the gap is unlikely to close quickly.
Anyone planning a tree change once Melbourne recovers may have the sequence backwards. A Melbourne recovery would lift your sale price, but regional prices have been climbing throughout, and there is no particular reason to expect them to pause and wait.
That does not mean rushing. It means the delay has a cost, and that cost should be part of the decision rather than absent from it.
If a regional move is on your horizon, it is worth talking through the timing with a Melbourne buyer’s advocate before you commit either way.
If you are downsizing within Melbourne
This group sits closest to neutral.
Selling a house and buying a unit or townhouse in the same city means both sides of the trade are moving in the same direction. In July, houses fell 0.5% while units fell 0.2%, so the asset being sold declined slightly faster than the asset being bought. Over a single month that is a small difference. Sustained over a year it becomes meaningful.
The variation by suburb, building quality and price bracket is far wider than that 0.3 percentage point gap, though. A well-located, well-built two bedroom apartment in a tightly held pocket behaves nothing like new stock in an oversupplied one. This is a decision that has to be made on comparable sales in two specific markets, not on citywide medians. Our Bayside, Inner East and South East teams work across exactly these comparisons.
The three situations side by side
| Selling | Buying | Effect of a falling market | Main risk | Strongest approach | |
| Upsizing in Melbourne | Lower value property | Higher value property | Favourable. The dollar saving on the purchase exceeds the dollar loss on the sale | Selling before you have secured a replacement, in a market with limited stock | Line up the purchase first, or negotiate a longer settlement, so the two transactions can be sequenced |
| Melbourne to regional Victoria | Falling market | Rising market | Unfavourable, and widening | Delay. The affordability gap has grown each month | Assess the trade now rather than waiting for a Melbourne recovery that would not close the gap |
| Downsizing within Melbourne | House | Unit or smaller house | Close to neutral, with a slight drag | Assuming citywide figures describe your specific trade | Compare comparable sales in both target markets before committing to timing |
The risk of selling first is real
The most common fear is straightforward and reasonable. You sell, and then you cannot find anything worth buying.
That risk is higher than usual at the moment, because the same conditions making vendors nervous are keeping stock off the market. Fewer owners are listing, and several homes have been withdrawn from auction in recent weeks rather than sold at a price the vendor was unwilling to accept.
Selling first gives you certainty about your budget and puts you in a strong position to negotiate, since you are not relying on a sale that has not happened. What it does not give you is certainty about where you will live.
The practical countermeasures are to negotiate a longer settlement on the sale, to build a rental contingency into your plan, and to be actively searching well before your campaign starts. That includes pre-market and privately offered properties, which is where finding the right property becomes a structured process rather than a weekend habit.
The risk of buying first is also real
Buying first solves the housing problem and creates a financial one.
If your purchase settles before your sale, you may need bridging finance. Bridging is typically priced above standard variable rates, and with the cash rate at 4.35% the holding cost is not trivial. You may also carry two sets of rates, insurance and owners corporation fees for a period.
There is a behavioural risk as well. Owning two properties and needing to sell one creates pressure, and pressure tends to produce weaker outcomes on price.
Buying first suits people with genuine financial capacity to hold both for a period. It suits people relying on their sale proceeds to settle much less well.
Bridging structures and costs vary considerably between lenders. Speak to a mortgage broker or financial adviser about your circumstances before committing to either sequence. This article is general information, not personal financial advice.
Nicole Jacobs on the Melbourne market
Speaking to realestate.com.au in August 2026 about the outlook for the spring selling season, Cohen Handler Victoria Managing Director Nicole Jacobs said that while there would probably be a little more stock on the market in spring, a huge rush of listings was unlikely.
“I think everyone’s going to be waiting for indicators of interest rate rises or not,” she said. “We also have a state election which sometimes leads to hesitancy, such as waiting to make decisions until that’s all over and done.”
She expects owners who need to sell, for reasons such as relocating for work or a growing family, to account for the majority of spring listings, and has seen several homes withdrawn from auction in recent weeks.
On upgrading specifically, she said now was a good time for homeowners wanting to move up, even if they took a hit when selling.
“But the property they’re upgrading to is also going to take a hit, and that margin that allows them to upgrade is going to be narrower than a margin in a growing market.” Nicole Jacobs, Managing Director, Cohen Handler Victoria
That narrowing margin is the whole argument. The step between where you are and where you want to be is shorter now than it was, and shorter than it is likely to be again.
The strongest play in a downturn
Sell an asset that has held its value relatively well, and buy one that has fallen further.
That sounds obvious written down, and almost nobody does it, because they are watching the citywide median instead of their own two markets.
A falling market is not uniform. In this one, units in the lower brackets have been supported by first home buyer demand while larger houses have absorbed more of the decline. Some suburbs have barely moved. Others have given back years of growth. The suburbs that hold up in a downturn tend to be the ones with high owner-occupier ratios and low turnover, where few owners are forced to sell.
To work out whether your trade stacks up, compare across both your current suburb and your target suburb:
- Recent comparable sales, not asking prices
- Property type and price bracket, since these move at different speeds
- Median days on market and how it has changed
- Vendor discounting, meaning the gap between initial asking price and sale price
- Auction clearance rates, read over a four week rolling period rather than a single weekend
- Available stock, and how much of it is genuinely competitive
- Pre-market and privately offered supply that never reaches a portal
That comparison is the actual decision. Trying to forecast the Melbourne market as a whole is a different and much less useful exercise.
If you would like that analysis run properly on your two markets, it is part of how our Melbourne buyer’s advocates approach every brief.
Where a buyer’s advocate changes the outcome
Trying to buy and sell simultaneously is challenging, managing two different kinds of projects essentially. A Melbourne buyer’s advocate can keep the search running while you prepare or complete your sale, which is the single most effective way to reduce the risk of selling first. You are not starting from nothing on the day your property settles. If you are still weighing up whether representation is worth it, our guide to what a buyer’s advocate does sets out the scope of the role.
Access matters more than usual in current conditions. Many Melbourne vendors are reluctant to launch a public campaign, and would rather sell quietly than risk a property sitting on the market and accumulating days. Cohen Handler maintains visibility across listed, pre-market and discreet opportunities through relationships with selling agents, private vendors and local networks. Those properties do not always appear on the major portals.
It is worth being honest about the trade-off on the other side of that. Selling off-market removes competitive tension, which usually costs a vendor money. It suits a vendor with time and a firm number. It suits a vendor with a deadline poorly. As a buyer, that dynamic is what creates the opportunity.
Alongside access, the work that changes the number on the contract is expert property negotiation and property due-diligence, particularly in a market where a price guide tells you less than it used to. If your purchase is likely to go to auction, auction bidding can be engaged on its own.
So which should you do?
Sell first if you are upsizing, if you would struggle to service two properties, or if certainty about your budget matters more to you than certainty about your next home. Protect yourself with a longer settlement and an active search before you list.
Buy first if you have the financial capacity to hold both for a period, if you are buying something genuinely scarce that will not reappear, or if you are moving to a market rising faster than the one you are leaving, which currently includes much of regional Victoria.
Do both at once where you can. It is harder to coordinate and it is usually the best outcome, which is precisely why representation on the buying side earns its keep.
The market average will not make this decision for you. The gap between your two properties will.
To talk through your own numbers, get in touch with the Cohen Handler Melbourne team. Starting with a property buyer’s brief is usually the fastest way to work out which sequence suits you.
Frequently asked questions
It depends on your financial position and what you are buying. Selling first gives you budget certainty and negotiating strength, but leaves you exposed if you cannot find a replacement, which is a real risk while listings are limited. Buying first gives you certainty about your next home but may require bridging finance and the capacity to hold two properties. Upsizers with limited borrowing capacity generally sell first with a long settlement. Buyers chasing scarce property with financial headroom generally buy first.
Usually yes. The property you are buying costs more than the one you are selling, so a percentage fall produces a larger dollar saving on the purchase than the loss on the sale. On a $530,000 gap, a 3.6% fall is worth roughly $19,000 in your favour. The wider the step up, the greater the benefit.
If you are selling and buying in the same market, waiting rarely helps and often hurts. A recovery lifts your sale price and the price of whatever you buy next, and the more expensive property rises by more in dollar terms. Waiting makes most sense if you are selling and not buying again, or moving to a market that is falling faster than Melbourne.
The main one is being unable to find a suitable replacement, which is heightened while many owners are holding off listing and homes are being withdrawn from auction. Secondary risks include renting for longer than planned, moving twice, and feeling pressured into a compromise purchase. A longer settlement and an active search, including pre-market stock, materially reduce all three.
Carrying two properties. That can mean bridging finance above standard variable rates with the cash rate at 4.35%, duplicated rates, insurance and owners corporation fees, and pressure to accept a lower price on your sale to relieve the position. It suits buyers with genuine capacity to hold both.
A bridging loan covers the gap between buying your new property and selling your existing one. The lender usually calculates peak debt across both properties, and you pay interest on that balance until the sale settles, at which point the proceeds reduce the loan to the end debt. Terms are typically six to twelve months. Structures and rates vary between lenders, so speak to a mortgage broker about your circumstances.
It is, but the gap has been narrowing against Melbourne sellers. Melbourne house values fell 3.6% over the year to July 2026 while regional Victorian houses rose 4.8% and regional units rose 6.3%. PropTrack attributes part of this to regional Victoria remaining undersupplied while Melbourne’s new housing supply keeps pace with population growth. Waiting for a Melbourne recovery is unlikely to improve the trade.
Yes, and it is one of the clearer arguments for engaging one in current conditions. Many Melbourne vendors would rather sell quietly than run a public campaign that may not perform, so a meaningful share of stock never reaches the major portals. Access comes through relationships with selling agents, private vendors and local networks built over years.
No, and this is the most important thing to understand about your own trade. In July 2026, 93% of Melbourne suburbs recorded a fall, but houses fell 0.5% while units fell only 0.2%, with lower price brackets supported by first home buyer activity. Suburbs with high owner-occupier ratios and low turnover typically hold up better, because fewer owners are forced to sell. Comparable sales in your specific suburb and price bracket will tell you far more than the citywide median.