As we entered 2026, the narrative was set: the major banks and property forecasters were tipping modest growth of 5% to 8%. Even as late as December, many were still calling for rate cuts—a prediction that economists like Warren Hogan found difficult to reconcile with uncontained inflation. But we didn’t have to wait long for reality to bite. With the first rate increase landing in February and the geopolitical shock of the Iran conflict in March, the property market entered what we consider the most dynamic and volatile period since the pandemic.
The March "freeze"
In thirty years of operating in this local market, we have navigated the dot-com crash, the GFC, the APRA serviceability crunch, and COVID-19. Yet, the shift we witnessed this March was the fastest market change we have seen in three decades. The RBA lifted the cash rate to 4.1% in March just as listing levels hit a five-year high. The reaction was immediate. According to SQM Research, the final auction clearance rate in Sydney plummeted to as low as 33%, a level of uncertainty not seen since April 2020 when the unknowns of the pandemic were front and centre.
A tale of two markets
Despite the macro-economic chaos, the quarter wasn't without its triumphs. Our team secured the highest-priced sale ever achieved for a home in Hunters Hill, alongside the two strongest waterfront sales on the Balmain Peninsula for 2026. February saw a run of stellar auctions that set a positive tone; however, the persistent media headlines of March froze many into inaction.
We have seen buyers become incredibly cautious, with risk appetite diminishing into a "wait and see" approach. It is fascinating to watch how quickly the "herd mentality" takes hold. While a few savvy individuals follow the Warren Buffett mantra - to be greedy while others are fearful - for most, fear simply overrides common sense.
