The tourists' hopes of regaining the famous urn were washed away by a rain-affected third Test draw at Old Trafford that concluded Monday and gave Ashes-holders England an unassailable 2-0 lead with two to play.
But after losing the first two Tests, Australia's performance at Manchester was much better with their batting finally firing, in contrast to England's.
After the second Test at Lord's, Border, known as "Captain Grumpy", slammed Australia's top three as "embarrassing" while telling Shane Watson to sort himself out, but he has had a change of heart.
"What a difference two weeks can make. In the space of 14 days, my perception and gut-feel about this Australian side has changed," said Border, who captained the side 93 times as it rebuilt in the mid-1980s, laying the foundations for a long period of dominance.
"England has retained the Ashes and well done to them, but the performance of this largely inexperienced Australian team has filled me with confidence."
Border, who played 156 Tests scoring 11,174 runs, said it looked like Australia had "drawn their own line in the sand" at Old Trafford, in much the same way Australia did during the 1986-87 series.
Border's Australians lost that series 2-1 but won the World Cup in 1987 before starting 16 years of Ashes domination in 1989.
"They showed real fight and England are worried," he said in a comment piece on the Cricket Australia website.
"The Poms were playing catch-up cricket from day one, going slow with over rates and doing everything they could to negate our chances of winning. At the end of the day rain saved England - it's as simple as that.
"The way this side is going over the next few months, look out. Australia has the momentum.
"Old Trafford proved England is vulnerable," he added. "Australia has broken the spell (Jimmy) Anderson and (Graeme) Swann had over them, playing Cook's two go-to men with more assurance.
"The confidence in the group has grown and the boys can sense they're back in the contest. England has some good cricketers, but what this kind of performance does is put doubts in their minds.
"Cook, (Jonathan) Trott and (Kevin) Pietersen don't look as insurmountable as they once did. I reckon we've turned a corner."
The fourth Ashes Test starts in Chester-le-Street, the headquarters of northeast county Durham, on Friday.