For several years after the pandemic, Sydney real estate felt easy.
Interest rates were pushed to emergency lows, borrowing became cheaper, and buyer confidence surged. The Reserve Bank cut the cash rate to 0.25% in March 2020 and then to 0.10% in November 2020. Mortgage rates fell with it, and the market responded exactly as you would expect. Prices rose, competition intensified, and strong results became common.
Auction clearance rates tell the story. Before COVID, Sydney had already recovered strongly, with clearance rates above 70% in late 2019. The market briefly stalled in the early shock of the pandemic, then rebounded sharply. By February 2021, Sydney’s auction clearance rate had climbed to 81.7%, and in March 2021 it held above 80% for eight straight Saturdays.
That was not a normal market.
It was a market where momentum made almost everything look like it was working.
And that is where the illusion began.
When the market is moving quickly and almost every property is attracting enquiry, many agents appear far more effective than they really are. A lead agent can carry a large number of listings, shorten open-home times, hand buyer interaction to assistants, and rely on CRM systems and the major property portals to keep campaigns moving. In that kind of market, volume is easily mistaken for skill. The public starts to assume that the agent with the most listings must be the strongest operator, when in truth the market itself is doing much of the heavy lifting.
That is the first risk sellers need to understand.
The large franchise groups have built their businesses around market share. More offices, more agents, more listings, more sales. In a fast market, that model looks powerful. But in today’s market, volume does not automatically deliver a better result. Buyers are not choosing a property because of an agency name. They are searching online based on price, location and property type, then deciding which homes are worth inspecting.
In a boom, that distinction is easy to miss. In a more selective market, it matters.
The second major shift came from seller behaviour.
During the boom, a new mindset took hold: buy before you sell.
People became afraid of missing out. In a rapidly rising market, that fear felt rational. Buyers stretched to secure the next property first, believing their existing home would sell quickly and at a strong number. In many cases, it did.
But what worked in a rising market becomes dangerous in a softer one.
Today, the Reserve Bank’s cash rate is 4.10%, not 0.10%. Sydney’s preliminary auction clearance rate for the week ending 21 March 2026 was 58%, compared with 68% at the same time a year earlier. Finance is tighter, buyers are more selective, and timing matters far more.
That is why I believe sellers today should think in the opposite direction wherever possible: sell before you buy.
Even if that means negotiating a longer settlement, it is often the safer strategy. Bridging finance is expensive, and the unknown in a softer market can be costly. If you buy first based on an inflated opinion of what your current property might achieve, you are taking on timing risk, finance risk and market risk all at once.
For downsizers, that risk is even more pronounced.
A downsizer may commit today to an off-the-plan luxury apartment in Sydney’s east for $7 million, believing their existing home will comfortably fund the move when settlement arrives in two years. But the real commitment is already much higher than the contract price. In NSW, stamp duty on a $7 million purchase is about $416,197, taking the entry cost to roughly $7.42 million before legal fees, finance costs and moving expenses.
Now take a practical example.
A family home in Dover Heights may be worth around $8 million in today’s market, and the owner may assume that value will comfortably cover the move. But if the market moves down by 10%, that same home may only sell for $7.2 million. If the apartment market also softens by 10%, the new apartment may be worth only $6.3 million by settlement.
That seller is hit from both sides.
They lose $800,000 on the home they planned to sell, $700,000 on the paper value of the apartment they committed to buy, and they are still carrying more than $416,000 in stamp duty already paid. That is a deterioration of roughly $1.9 million before finance, legal costs and selling expenses are even counted.
That is not a theoretical risk.
It is exactly why buying before you sell can become so dangerous in a rebalancing market.
It becomes even riskier when new supply starts entering the market. The NSW Low and Mid-Rise Housing Policy is expanding development capacity in more suburbs, increasing the likelihood of more competing listings in established areas. If more downsizers in the same suburb decide to sell similar homes around the same time, competition increases and price pressure follows.
This is where the volume-agent model becomes even more exposed.
When the market is rising, a high-volume agent can still look like a star. They can run multiple campaigns, delegate opens, shorten inspections, and still achieve strong results because the market is carrying them. But when the market slows, that same model starts to show its weaknesses. The lead agent may not be at the door. They may not be speaking directly with every serious buyer. They may not be reading body language, hesitation, finance concerns, or the subtle difference between curiosity and genuine intent.
And in this market, that matters.
The secret to selling has never been just putting a property online. Every agent has access to the same major portals. The real work is in reading buyers properly, understanding the competing listings, and giving the vendor honest advice before the campaign starts to drift.
That brings us to quoting.
NSW already requires agents to include a reasonable estimated selling price in the agency agreement, support it with evidence, and ensure advertised pricing does not fall below that estimate. The estimate must be based on comparable sales, market conditions, property features, buyer feedback and relevant valuations. If a range is used, the top cannot exceed 10% above the bottom. Agents are also prohibited from using phrases such as “offers over”, “offers above” or “$X+”.
The NSW Government has now gone further, announcing tougher underquoting laws in March 2026. The proposed reforms would require a published price or price guide on all advertising, a Statement of Information explaining how that figure was calculated, and a ban on advertising below a previously rejected written offer or the highest unsuccessful auction bid. Proposed penalties would rise to $110,000 or three times the commission, whichever is greater.
That is not a minor regulatory change.
It is a sign that government can see the risks in the way some campaigns are being run.
And those risks are real. A $6.5 million residential purchase in NSW attracts substantial transfer duty, taking the buyer’s entry cost to about $6.88 million before legal and holding costs. If that same property later sells for around $6.02 million, the shortfall against purchase plus duty alone is roughly $861,000, before agent’s fees, marketing, styling and legal costs.
In a rising market, sellers may have been able to absorb poor advice.
In this market, they may not.
That is the major shift in Sydney real estate.
It is not just about interest rates, clearance rates or legislation. It is about exposure. The post-pandemic market allowed many agents to appear more capable than they really were because momentum covered mistakes. It encouraged sellers to believe that buying before selling was normal because rising prices reduced the apparent risk. It allowed large-volume operators to build businesses around automation, delegation and market share because the market was moving fast enough to reward scale.
Today, that environment has changed.
Open homes are quieter. Buyers are more analytical. Listings are more competitive in some segments. Finance is tighter. And the margin for error is far smaller.
Sellers need to question the type of agent they appoint. They need to ask whether they are choosing someone who genuinely reads the market, speaks directly with buyers, and gives evidence-based advice, or whether they are choosing a brand name wrapped around a volume system.
Because in this market, sellers are no longer choosing between agents.
They are choosing between strategy and risk.
