If you have been reading the property pages lately, you would be forgiven for thinking the sky is falling. Sydney’s auction clearance rate dropped to 47.2 per cent in the week ending 14 June, on Cotality’s numbers — the weakest the city has managed since the lockdown of April 2020, and on Domain’s reckoning the lowest in five years against the 60 per cent or so that marks a market in balance. More than half the homes taken to auction across the country that weekend did not sell. Values are easing too: Cotality has Sydney down 0.9 per cent for May and now 2.1 per cent below its November peak, at a median of $1,295,387, with houses leading the fall. The Reserve Bank, having raised rates three times this year, held at 4.35 per cent on 16 June and went out of its way to say it would raise again if it had to. Relief, if it comes, is now a 2027 story.
So yes, the market has turned. But I have watched enough of these cycles — this is my thirty-sixth year selling in the east — to know that the averages almost never describe what is happening on our particular streets, and reading them too literally is how people make expensive mistakes in both directions.
A record $12.8 trillion in housing value — and why it misleads
Let me give you one figure that cuts the other way. On the Bureau of Statistics’ measure, the value of every home in the country reached a record $12.8 trillion in the March quarter. To see what that means, line up the same quarter across recent years: $8.3 trillion in 2021, $10.1 trillion in 2022, then a fall to $9.8 trillion in 2023 as the last rate cycle bit, back to $10.7 trillion in 2024, $11.4 trillion in 2025, and now $12.8 trillion. That is a national property pile worth roughly half as much again as it was five years ago — but note the dip in 2023, because it is the proof that this number can and does go backwards. The catch with the latest figure is that the same release admitted growth had “moderated”, and the numbers stop at the end of March, so they miss everything that has happened since. The record is being carried by Perth and Brisbane. Sydney is no longer doing any of the lifting. It is the clearest illustration I can give you that “the market” is a fiction — there are only markets, plural, and ours behaves differently from the one in the headlines.
Why the top of the Eastern Suburbs market is holding
Here is how ours is behaving. At the genuine top, prices are holding. They tend to. Cotality’s Best of the Best last year ranked the nine dearest house markets in the country, and every one of them is in the eastern suburbs — Point Piper above $17 million, then Bellevue Hill, Vaucluse, Darling Point, Double Bay, Rose Bay, and on down the harbour and the coast. You cannot make more Vaucluse waterfront or more Paddington terraces, and a soft national index does nothing to change that scarcity.
Sydney’s auction clearance rate, and where the softness really shows
What has changed is everything between the listing and the contract. The softness shows up first in volume, not price. Cotality estimates sales across Sydney ran 17 per cent below this time last year — the sharpest drop of any capital — while the total number of homes advertised sat 9.3 per cent higher. Fewer buyers, more choice, and homes taking longer: 33 days on the market now, against 27 across the other capitals. Through 2021 and into 2022, momentum did the work for you; you could bring an indifferent campaign to a rising market and the market would carry it. It will not carry you now. Domain’s Dr Nicola Powell put the current results down to a plain misalignment between what buyers will pay and what sellers expect — and that gap is precisely where money is made or lost. Today the distance between a price set with judgement and one set on hope is no longer a few quiet weeks on the portal. It is the difference between a sale and a withdrawal.
What the May budget’s negative gearing changes mean
There is a wrinkle in the May budget worth understanding, because most people have it backwards. From July 2027 the government has proposed limiting negative gearing to new builds; on an established home bought after the budget, rental losses can only be set against property income, not your salary. The 50 per cent capital gains discount is to be swapped for an inflation-based one with a minimum 30 per cent rate. None of it is law yet, and if you have a position to protect you should take your own tax advice rather than mine. But the part that matters for our market is the grandfathering: if you already held an investment property on budget night, your arrangements are protected. Which means an owner with a negatively geared place in Bondi or Randwick now has a fresh reason to hold rather than sell — and over time that makes good established stock in our suburbs scarcer, not more plentiful.
The build-to-rent oversupply coming to Bondi Junction
Now let me tell you what actually worries me, because it is not this winter’s clearance rate. It is what comes after it.
Right now our rental market is tight. Vacancy is sitting near 1.5 per cent on SQM Research’s count, rents are at or close to record highs, and a decent apartment still draws a queue. That is today. It is not, I suspect, the back half of this decade. New South Wales now leads the country in build-to-rent — more than 15,000 institutional rental apartments completed, under construction or in the pipeline on Property Council and Knight Frank figures — and the state changed the Housing rules in April to make those towers easier to build in exactly the commercial and mixed-use pockets that describe a place like Bondi Junction. Apartment approvals across the city are running close to 50 per cent above a year ago. Little of it has landed yet, because a tower takes two or three years to build, but it is coming, and it is coming as professionally run, amenity-rich rental product leased at scale.
And you do not need to look to the western suburbs to find it — it is arriving at the end of our own bus routes. On the Oxford Street Mall, in the heart of Bondi Junction, the developer Apt. Residential has a proposal before the state for three towers of build-to-rent apartments, recommended by the NSW Housing Delivery Authority in 2025 to be declared State Significant Development. Waverley Council’s own draft master plan for the precinct, on exhibition as I write, would add in the order of 1,250 new homes around that mall alone, reorient the main entrance of the station onto a new public square, and remake the strip as a dense residential and dining quarter. And it is not only Oxford Street. A short walk away on Grafton Street, towers such as Origami at number 55 are due to complete within months, with more approved behind them. Within a year or two this one small pocket will absorb well over a thousand new apartments.
Here is the part most landlords have not thought through. When a developer cannot sell its apartments off the plan — and in a market as soft as this one, plenty cannot — it does not simply walk away. It leases them out instead, because an empty new building still has to service its debt. So the slowdown in sales does not relieve the rental market; it floods it. And the wave is not confined to the Junction. The same thing is rolling through Edgecliff, Randwick and Maroubra, and just over our western boundary in the vast renewal zones of Green Square, Zetland and Waterloo. Every one of those buildings hands a tenant the option to move into something brand new.
What the new rental supply means for landlords
Now think about what that does to you as an investor. A tenant moves easily — far more easily than an owner — and they are about to be handed every reason to. The yields on our stock are already thin, often 1.5 to 2 per cent on a house, with little room to absorb a bidding war for tenants. Vacancy is tight today, but a brand-new building with a pool, a gym and a concierge is a powerful argument, and at the right rent your tenant will take it. Do not assume the budget’s grandfathering protects you here: it shelters your tax position, not your tenant. And do not assume the answer is simply to buy new and keep the negative gearing the budget now reserves for new builds — because the day you come to sell that apartment, the person buying it is buying established stock, the tax break does not travel with it, and your buyer inherits exactly the disadvantage the budget has handed every other established-property purchaser. Buy new today and you have done little more than carry your problem forward to the day you sell.
What it all amounts to is a change in the question. In a market about to absorb this much new stock, a landlord stops asking what the property is worth as a rental and starts asking how long it will sit empty before a tenant can be found at all. That is no longer a yield calculation — it is a distress calculation, and the property most exposed to it is the very one so many of my clients own: an older home or a tired apartment, currently let to a good tenant at a fair rent. When the new building opens down the road, that tenant has somewhere better to go, and your older property — the one that wants work, or lacks the gym and the pool and the parking — is the one left sitting vacant in a market you had always assumed would find you a renter. Faced with that, a good number of investors will decide to sell.
A lesson from the early 1990s
I have seen where that road can lead when the selling meets misfortune. I was working out of Double Bay through the early 1990s. People who had bought at the top of the late-eighties boom waited the better part of a decade to see their money again — prices did not crash so much as drift, quietly, year after year. The real harm in a thin market is rarely done by the ordinary sale. It is done by the forced one — the mortgagee or receiver sale, the divorce, the business gone wrong, the deceased estate that has to be sold by a date rather than at a price. A handful of those, landing in a quiet stretch, become the comparable sales the rest of us are then measured against. That is how a soft market quietly becomes a falling one.
How to sell in a softening Eastern Suburbs market
So, what do I tell people? If you have to sell, sell to the market in front of you, not the one you remember from four years ago. Price it where the buyers actually are, present it properly, and accept that the campaign will ask more of you than it once did. A 47 per cent clearance rate is not a reason to panic — it is a reason to be deliberate. Good homes, judged and brought to market with care, are still selling perfectly well in the east. They are simply no longer selling by accident.
And if you do not have to sell, you have a fair case to wait — provided you go in with your eyes open: that the wait is measured in years rather than months, that rates may rise before they fall, and that the wave of new rental supply still to come is more likely to test prices than to lift them.
Either way, this is not a market to run on autopilot or hand to a script. It has handed the advantage back to buyers, and in doing so it has put the premium back on the things that have always mattered most here — an honest price, restraint, discretion, and the judgement of whoever is actually in the room. That suits me. After thirty-five years, it is the only way I have ever wanted to work.
Which brings me to the one thing I would be wary of in a market like this. The volume agent’s template — list it, run the four-week countdown, send it to auction, move on to the next — is built for a rising market that forgives a rushed campaign. In a market shifting week to week, that template does not work in your favour. Selling well now asks for longer days, not shorter ones: time to find the right buyer rather than the first one, a price held with judgement rather than surrendered to a deadline, and an agent who is genuinely running your sale rather than supervising thirty others.
That is the only way I work — one home at a time, personally, from the first conversation to the last signature. If you are weighing a sale, I would be glad to sit down with you, by appointment and over a coffee, and give you a considered view of where your home really sits in this market. No countdown, no theatre — just judgement, which is the one thing this market is now prepared to pay for.
Alan Weiss
Weiss Real Estate · 0412 176 074 · alan@weissrealestate.com.au
Disclaimer: This article reflects my general observations on the Eastern Suburbs market as at June 2026. It is not financial, tax, legal or investment advice, and it does not take account of your personal circumstances. Budget measures referenced are proposals and not yet law. Please obtain your own professional advice before making any property decision.
