By Alan Weiss – Real Estate Specialist, Sydney’s Eastern Suburbs
As a real estate veteran, I’ve watched Sydney change dramatically over the decades. But right now, we’re in the middle of one of the biggest shifts we’ve seen in years — driven by rising demolitions, zoning changes, and a desperate race to build more homes.
Let me break down what’s really going on in the property market, especially here in Sydney’s east, and what it means for buyers, owners, and developers.
Demolitions Are Up – But So Is the Pressure to Build
According to the Australian Bureau of Statistics, over 20,000 homes were approved for demolition in the past year. Most of these were standalone houses — 18,864 to be exact — while only 1,146 were units.
Melbourne led the country with 6,075 demolitions, followed by Sydney, where 5,351 houses and 340 units were greenlit for removal.
Why so many knockdowns? In most cases, they’re cleared to make way for new, higher-density housing. But it’s a balancing act — every home demolished means one less in our housing stock unless it’s replaced by two, three, or ten.
The Big Picture: Not Enough Homes Are Being Built
Australia approved around 181,000 new homes in the 12 months to March 2025. That sounds like a lot — until you compare it to the federal government’s target: 1.2 million new homes by 2029.
That’s 240,000 per year, every year. We’re falling well short.
Here in NSW, we need to deliver around 75,000 homes annually, but we’re averaging closer to 56,000. And some of those approvals involve demolishing existing homes first — especially in Sydney, where land is scarce and valuable.
What’s Getting Built – And Where?
In Sydney’s eastern suburbs, especially around Bondi, Bronte, and Clovelly, we’re seeing more and more small blocks of flats (usually 4 to 6 units) being snapped up by developers. These blocks, often built in the 60s or 70s, are now sitting on goldmines — especially if they’re within walking distance to the beach.
The reason? Under NSW strata renewal laws, just 75% of unit owners (by unit entitlement) can vote to sell the entire block for redevelopment. It’s part of the Strata Schemes Development Act 2015, designed to encourage urban renewal. Once the 75% threshold is met, the proposal can go to the Land and Environment Court for final approval — even if some owners object.
On Campbell Parade, front-row blocks are selling for $50,000 to $100,000 per square metre. That’s serious money, and it’s fuelling a wave of boutique rebuilds targeting prestige buyers.
Zoning Changes: A Game Changer in Double Bay, Edgecliff & Rose Bay
Meanwhile, suburbs like Double Bay, Edgecliff, and Rose Bay are entering a new phase of development.
The NSW Government’s Low and Mid-Rise Housing Policy allows for:
- Up to 6 storeys within 800 metres of town centres
- Up to 8 storeys within 400 metres of a major train station
In places like Edgecliff, where a 12-storey tower has already been approved at 136-138 New South Head Road, this has unlocked massive new potential.
In Double Bay, these changes are prompting a flurry of development applications, as investors and developers scramble to secure older homes and flats on large parcels of land. We’re now seeing blocks that previously only allowed 2–3 storeys being considered for much taller residential builds.
So Why Isn’t More Being Built Already?
There are three major handbrakes on construction right now:
- High Interest Rates – Holding costs have risen sharply, and buyers are cautious, especially off-the-plan.
- Soaring Construction Costs – Building costs have risen over 30% since 2021. That’s made many projects unviable unless they’re at the high end of the market.
- Tight Lending & Lower Demand – With fewer pre-sales, many developers can’t get the finance they need to start building.
Because of this, we’re seeing fewer new unit developments — and the ones that are getting built tend to target luxury buyers rather than middle-income families.
What Needs to Happen to Kick Off the Next Building Boom?
If we want more homes — not just approvals — we’ll need:
- Lower interest rates to reduce holding costs
- Government incentives for buyers and developers
- Streamlined planning rules, especially at the local level
And most importantly, confidence needs to return. When people feel optimistic about the future, they build, they buy, and they invest.
Final Thoughts from Alan Weiss
The market is changing fast. Demolitions are up. Zoning is opening new doors. But building isn’t keeping pace with population growth or demand.
If you own an older property near transport or the beach — especially a unit in a small block — you may be sitting on an asset far more valuable than you realise.
And if you’re a buyer, understanding what’s being knocked down, what’s going up, and where developers are heading next will help you make smarter long-term decisions.
Want tailored advice about your suburb or building? Get in touch — I’m always happy to share what I’m seeing on the ground.
