Sydney's east positioned for growth amid renewed market confidence
Lower inflation and stronger buyer confidence have been setting the stage for a surge in property activity in Sydney’s eastern suburbs in the coming months.
Co-founder of The Agency, Ben Collier, said that after a prolonged period of flatness, sentiment in Sydney’s eastern suburbs property has picked up following the Reserve Bank of Australia’s recent cash rate cuts and easing inflation.
“We’re noticing a real shift in how buyers are viewing value, and what they’re prepared to pay. And, most importantly, a growing number of indicators are supporting what we see,” Collier explained.
While sellers in the Sydney eastern suburbs market have been reluctant to list their properties at the start of 2025, Collier said the boosted market sentiment has increased market activity.
“We expect that sellers will become more confident and more properties will begin to hit the market. But we’ll also see more buyers,” Collier said.
“These should make for more dynamic conditions over the rest of the year,” he added.
While Sydney’s eastern suburbs have long been a blue chip area, the market has shifted with the median house value surging to $3.465 million, compared to the national median house price of $872,000.
Due to the area’s high property prices, Collier said buyer confidence had remained low over the last property cycle, with buyers required to save up $693,000 to fulfil the 20 per cent deposit on a median valued house in Sydney’s eastern suburbs.
Despite the challenges, Collier said that the RBA’s recent interest rate cuts have helped to bolster buyer confidence, with Australia’s big four banks – CBA, Westpac, NAB and ANZ – anticipating further reductions.
Collier said that by March 2026, interest rates could be as low as 2.6 per cent, further increasing the property market momentum.
“But lower interest rates aren’t the only reason we’re seeing buyers grow more confident. The economy seems to be holding up better in the face of uncertainty than many anticipated,” he said.
Collier said that Australia’s national unemployment rate has remained stable between 3.9 per cent and 4.1 per cent for 17 months, supporting a strong economy, while easing living costs and lower petrol prices have helped stabilise inflation.
“This has helped the headline inflation rate to stabilise at 2.4 per cent over 2025, its lowest rate in three years, giving people greater budget certainty,” he said.
Collier said that improved affordability metrics and the conclusion of the 2025 federal election have boosted buyer confidence in Sydney’s eastern suburbs, with expectations of higher auction clearance rates and overall market activity.
“[Auction clearance rates] really is the most reliable guide to how Sydney property is performing overall, but it has been sluggish for some time,” Collier said.
“In fact, it has been sitting in the 60s for the entire year and has not breached 70 per cent (generally the sign of a sellers’ market) since May 2023,” he added.
Collier said that with the buyer sentiment changing positively, more properties are expected to enter the eastern suburbs market, ultimately creating a more dynamic market.
Additionally, he said that Sydney’s eastern suburbs have been attracting buyers looking for ultra-prestige assets, with the heightened levels of activity indicating that momentum is broadly returning to all levels of the area’s property market.
“Often we find that competition in this segment can find its way through the rest of the market, even though each segment tends to have different drivers,” Collier said.
“For instance, exchange rates and general economic conditions are more important than interest rates in the market for homes over $10 or $15 million,” he added.
Following the favourable market outlook, Collier said he expects the rising market sentiment to increase seller confidence and buyer activity, leading to a more dynamic market in the easter suburbs later this year.
“What we think we’re witnessing is a market where the green shoots of growth are finally starting to sprout after what has been a flat (but not disastrous) 12 months,” he concluded.