Happy New Year!
2026 looks as though it is going to be an interesting one. Having been lucky enough to attended a play over the Christmas period, I couldn’t help leaning into playwriting our latest view.
The Eastern Suburbs property market is entering a new and more complex act. Recent NSW legislative changes have increased compliance, transparency and risk management obligations for landlords. Buyers at the upper end of the market are navigating elevated interest rates, stricter serviceability and a recalibration of price expectations (seller please note). Tenants, particularly in premium coastal and village-based precincts, are benefiting from stronger protections amid persistent rental scarcity. Overlaying this is a distinctive Eastern Suburbs dynamic: tightly held family homes, limited redevelopment opportunities, ongoing population inflows and intergenerational wealth transfer. The result is a market defined less by volatility and more by role clarity where timing, positioning and intent matter more than momentum. As Shakespeare observed, all the world’s a stage and in today’s Eastern Suburbs market, each participant must understand not only their role, but the act now unfolding…. So, what’s the outlook?
A Four-Act Property Play for Sydney in 2026
“The seeds of time,
And say which grain will grow and which will not.”
— Macbeth
Property forecasting always carries a touch of soothsaying. Markets, like people, are shaped by forces seen and unseen, policy decisions yet to be made, conflicts yet to resolve, confidence that can shift in a moment. What follows is not a promise of certainty, but a considered reading of the signs: an interpretation of today’s conditions and how they are likely to play out across Sydney and especially the Eastern Suburbs throughout 2026.
With that in mind, let us raise the curtain.
Act I — Setting the Stage (January–March)
Macro forces and market mood
“When sorrows come, they come not single spies,
But in battalions.”
— Hamlet
The opening act of 2026 is defined by global tension and economic caution. Ongoing geopolitical instability, lingering inflation pressures and the potential of higher interest rates influencing confidence.
In Australia, the Reserve Bank has stepped back from aggressive tightening, but borrowing costs remain well above pre-COVID norms. This hasn’t crushed demand, it has reshaped it. Buyers are more analytical and very considered. Sellers are more exposed if they misread the room.
In Sydney, strong employment, sustained migration and chronic housing undersupply provide a solid foundation. The Eastern Suburbs, in particular, remain insulated by scarcity but buyers are no longer paying any price.
What this means
- Buyers are cautious, not absent
- Sellers must price with evidence, not hope
- Good property still sells; average property lingers
Early-year tip:
Buyers should secure finance early and model repayments conservatively.
Sellers should anchor expectations to late-2025 evidence, not memories of peak-cycle pricing.
Act II — Rising Action (April–June)
Demand meets scarcity
“The wheel is come full circle.”
— King Lear
As autumn unfolds, structural supply constraints reassert themselves. Listings remain thin, construction pipelines weak, and population growth continues to outpace housing delivery.
This imbalance will continue to support measured price growth, particularly in Sydney. However, the composition of demand has shifted. Apartments, townhouses and well-located smaller homes are anticipated to outperform as buyers adapt to affordability ceilings.
In the Eastern Suburbs, lifestyle assets, beach access, transport and village proximity retain their premium. Downsizers and over-55 buyers quietly add depth to competition.
Mid-year tip:
Buyers should look laterally e.g. Another suburb? Another type of dwelling? Rather than emotionally.
Landlords should review rents, but prioritise stability of cash flow over churn.
Act III — Conflict and Constraint (July–September)
Affordability takes centre stage
“Thus the whirligig of time brings in his revenges.”
— Twelfth Night
By winter, the limits of affordability assert themselves. Borrowing capacity, not desire, becomes the primary constraint. Wage growth struggles to keep pace with housing costs, fragmenting the market.
In the Eastern Suburbs, premium homes still attract interest, but only when condition, layout and pricing align. Compromised stock lingers, and negotiation becomes more deliberate.
Rental markets remain under strain, supporting yields but increasing the importance of disciplined cash-flow management.
Winter tip:
For buyers, this is where patience creates opportunity.
For sellers, presentation and positioning are critical.
Act IV — Resolution (October–December)
Positioning for the next cycle
“Our doubts are traitors,
And make us lose the good we oft might win,
By fearing to attempt.”
— Measure for Measure
As 2026 draws to a close, the narrative sharpens. Prices finish higher than they began, but the market is calmer, more rational and increasingly strategic.
The Eastern Suburbs reaffirm their role as a capital-preservation market—less volatile, tightly held and consistently desirable. Investors favour yield stability and scarcity. Owner-occupiers prioritise quality and longevity.
Year-end tip:
Timing matters less than asset selection. When the right property appears, hesitation is often more costly than action.
Final Curtain — Reading the Signs
“There is a tide in the affairs of men
Which, taken at the flood, leads on to fortune.”
— Julius Caesar
Sydney’s 2026 residential market is not a market of blind faith, but it does reward those willing to read the signs carefully. Sydney dwelling values are expected to keep rising in 2026 but at a more moderate pace than that of 2025 (Growth forecast at 5 to 7%).
For buyers, sellers and landlords alike, success lies not in predicting the future perfectly—but in positioning wisely for the most likely one. Opportunities will present themselves over the year, the challenge will be to be prepared and ready to act.