A year ago everyone had rates falling through 2026. They’ve risen three times instead. I want to set out what’s actually changed in the Eastern Suburbs — and why the suburb median won’t tell you.
I have been selling property in these suburbs for more than thirty years, and if the last six months have reminded me of anything, it’s how little weight to put on a confident forecast.
Twelve months ago the consensus was settled. Rates were coming down, prices were firming, and the only real argument was about timing. Instead the Reserve Bank raised the cash rate in February, raised it again in March, and went a third time in May — taking it from 3.60 to 4.35 per cent and reversing every cut it had made the year before. The banks passed the last rise on inside a week. Unemployment ticked up to 4.5 per cent in April. The Board will probably hold when it meets in mid-June, but holding is not the same as turning, and buyers understand that perfectly well.
So much for the forecasts. The question I get asked — usually in a café, usually by someone weighing up whether to sell — is what all of this means for a house in Bellevue Hill, or Vaucluse, or Rose Bay. Let me try to answer it straight.
Start with the buyer’s wallet, because that’s where it bites first. Every quarter-point rise takes roughly $12,000 off what an average earner can borrow. Three of them in a row, and a single-income buyer has lost something like $36,000 in borrowing power since January; a couple, closer to $72,000. On a loan around $860,000 — the New South Wales average, and the closest local proxy we have — those same three rises add roughly $420 a month. Wealthy buyers feel this less than most — but they aren’t immune to it, and more to the point, they read it as a signal. When money costs more, people slow down.
52%
Sydney auction clearance, recent weeks — against 66% a year ago
−17%
Sales volumes across Sydney, year on year
You can see the slowdown plainly at auction. Fewer homes are selling, and Cotality has Sydney values off 0.6 per cent in April, just under where they peaked in November. None of that is a collapse. It’s a market that has quietly handed the whip back to the buyer.
The national papers like to frame all this as a tale of two cities — money draining west into the affordable corridors while the prestige end softens. As a broad sketch of Sydney, fair enough. As a read on the Eastern Suburbs, it’s too blunt to be much use.
Yes, the Domain figures show some of our best postcodes easing: Bellevue Hill’s median down around 5.5 per cent over the year to roughly $9.45 million, Rose Bay off about 6 per cent, Mosman and one or two others lower as well. On paper that looks like a clear verdict. It isn’t one.
Here’s what people forget about these suburbs. A median up here is built on a handful of sales. Homes change hands once in a generation, not once every five years, and which three or four happen to sell in a given quarter moves the number around far more than any real shift in what your house is worth. I’ve watched a median fall in a quarter where the genuinely good properties all sold above expectation — simply because of what came to market and what didn’t. Up here, the median is a headline, not a valuation.
The numbers worth watching are the ones that separate the top of the market from the bottom, rather than blending the two into a citywide figure. Through the March quarter, Cotality has Sydney’s upper-quartile values down 1.8 per cent while the lower quartile rose 1.8 per cent — the sharpest split of any capital city. And I’m seeing the same thing on the ground: more top-end campaigns need a price reset and a longer run before they find their buyer. And yet the genuine trophies are still going — several homes traded above $40 million this year across Point Piper, Rose Bay and Vaucluse, most of it quietly, much of it never reported.
I don’t read those two facts as a contradiction. Scarcity still puts a floor under the best assets — they aren’t making any more harbourfront, and the families who own it don’t move. What’s changed is the buyer’s discipline. The serious ones are still out there and still well funded, but they’re weighing everything now — land, aspect, parking, privacy, what it will cost to put right — and they’ll walk without a backward glance from a price built on the postcode rather than the evidence. Frankly, good. They should.
If you’re thinking about selling, the most useful thing I can point to is the gap that’s opened up between a finished home and a project. A renovated, ready-to-live-in house is drawing real competition right now, because a careful buyer is paying for certainty — no build cost to swallow, no development application to gamble on, no holding costs while plans crawl through council. The same buyer looks at an unrenovated home far harder than they would have a year ago, and marks it down for every one of those unknowns. The premium for being finished is about as wide as I’ve seen it.
That doesn’t mean you should renovate before you sell. More often than not the sums say don’t. It means presentation and price now do more of the work than they did when everything was rising and the tide carried the lot. In a market this selective, the difference between a strong result and a campaign that goes stale is rarely the house itself. It’s how the house is priced and how it’s brought to market.
So what do I tell the person across the café table? Don’t panic — and don’t sit on your hands waiting for a green light that may never come. Money costs more, the buyer has time, and every campaign is being read for confidence. The answer to that isn’t a bigger advertising budget or more noise; the portals and the auction rules are the same for all of us. The answer is judgement: a price the evidence supports, a property properly prepared, a campaign run with patience and, when it matters, with discretion.
Anyone can buy advertising. Sound counsel is harder to come by — and in a year when the forecasts fell over and the easy growth went with them, it’s the thing that separates one result from the next.
