Investors are trying to work out whether it still makes sense to buy
In Sydney's inner west, a generational transfer of equity quietly unfolded on a Saturday afternoon — a mother stepping out of ownership so her son could step in, their transaction a small but telling marker of how the city's property market is reordering itself. With investors retreating in the wake of federal budget changes to negative gearing, the space they once occupied is being filled by first-home buyers pushed outward from more coveted suburbs, navigating a market still uncertain of its own direction.
- Investors have gone silent across Sydney's inner west, spooked by negative gearing reforms that have made the yield calculations difficult to justify.
- First-home buyers are rushing into the vacuum, turning to suburbs like Ashfield as Marrickville and Newtown drift beyond their reach.
- A Dural acreage property sold $100,000 below reserve after one of two expected bidders withdrew at the last moment, exposing the fragility beneath the surface of auction results.
- The gap between price guides and final hammer prices is widening, reflecting a market that cannot yet agree on what anything is worth.
- Agents are urging patience — the true impact of the federal budget on property sentiment won't be legible for months, and until then, caution is the dominant mood.
The auction at 39/98 Chandos Street in Ashfield lasted only minutes. Two bidders, three bids, and a young man walked away with a two-bedroom apartment for $970,000 — exactly the reserve price, well above the $900,000 guide. His mother, who had recently sold her Haberfield home and is now moving into retirement living, provided the financial backing. It is a story Sydney knows well: one generation's accumulated equity becoming the next generation's entry point.
But the brevity of the auction also reflects something broader. Investors have largely withdrawn from the inner west, unsettled by federal budget changes to negative gearing that have made the numbers harder to justify. Sales agent Domenic Bucciarelli described them as sitting on the sidelines, waiting to see whether the incentives will return. Into that absence, first-home buyers are moving — drawn to Ashfield precisely because Marrickville, Newtown, and Dulwich Hill have grown too expensive.
Elsewhere that week, a four-bedroom house on two hectares in Dural sold for $2.45 million, a hundred thousand dollars short of its reserve, after one of two anticipated bidders withdrew at the last minute. The vendor, who had built the home four decades ago, negotiated directly with the sole remaining buyer. A single bid. A young family with children will move in.
Agent Gavin Weekley cautioned against reading too much into the budget's effect just yet. In the hills district, where acreage and family homes dominate, investors were never really part of the story — the slower pace since the year's start is more about interest rates than policy shifts. The question for those buyers has always been simpler and more human: can a family carry this mortgage, and does the place feel like somewhere worth living?
The auction lasted minutes. Two bidders, three bids, and it was done. A young man with his mother's backing walked away with the keys to a two-bedroom apartment in Ashfield on a Saturday afternoon, paying $970,000 for the place at 39/98 Chandos Street. The opening bid came in at $960,000. Someone countered at $965,000. Another five thousand dollars and the hammer fell.
The mother had recently sold her own house in nearby Haberfield and used some of the proceeds to help her son into the market. She's moving into retirement living now, stepping back from ownership. It's a familiar story in Sydney's property world—the generational hand-up, the parent's equity becoming the child's down payment. But the timing of this particular sale tells a larger story about what's happening in the market right now.
Investors have largely disappeared from the inner west. Domenic Bucciarelli, a sales agent at LJ Hooker, described it plainly: they've gone quiet. They're sitting on the sidelines, trying to figure out whether it still makes sense to buy. The federal budget changed the math. Negative gearing reforms have made the numbers harder to justify. The yields aren't there anymore. So they're waiting, watching, uncertain whether the incentives will ever return.
Meanwhile, first-home buyers are moving in. Ashfield is becoming the fallback option for people priced out of the neighborhoods everyone actually wants—Marrickville, Newtown, Dulwich Hill. Those suburbs have become too expensive. So buyers are looking one suburb over, finding apartments like this one, finding a way in. The reserve price was set at $970,000, matching exactly what the winning bid turned out to be. The guide had been lower, at $900,000, a gap that speaks to the uncertainty in pricing right now.
Across Sydney that week, 849 properties were scheduled for auction. In Dural, a four-bedroom house on two hectares sold for $2.45 million—$100,000 below its reserve. One of the two expected bidders dropped out at the last minute, leaving the remaining buyer to negotiate directly with the vendor, a man who had built the house four decades earlier and was now ready to downsize. A single bid was made. The auction ended. The new owners are a young family with children.
Gavin Weekley, an agent at Guardian Realty, offered a measured assessment: it's too soon to know how much the budget announcements will ultimately reshape the market. In the hills region where he works, things have been slower since the start of the year, but that's mainly about interest rates. When you're dealing with acreage and family homes, investors aren't really part of the equation anyway. The story there is different—it's about affordability, about whether families can carry a mortgage, about whether the numbers work for people who actually want to live somewhere rather than collect it as an asset.
Citas Notables
The investors are really trying to work out whether there is that incentive for them to buy. In many cases, the yield is not there, and with the changes to negative gearing, they are being kept at bay.— Domenic Bucciarelli, LJ Hooker sales agent
La Conversación del Hearth Otra perspectiva de la historia
Why did the investors suddenly step back? Was it just the budget announcement, or had they already been struggling?
The budget was the trigger, but the underlying problem was yield. In a market where interest rates are high and prices are high, the rental income doesn't cover the costs anymore. Negative gearing changes made it worse—they took away a tax advantage investors had relied on. So investors started asking themselves: why am I doing this? And they didn't have a good answer.
So first-home buyers like this young man are filling the gap the investors left?
Exactly. He had an advantage most first-home buyers don't have—his mother's equity from selling her own place. But yes, without investors competing, there's more room for owner-occupiers to actually get into the market. Ashfield becomes viable when you're not bidding against someone who's buying purely for cash flow.
The mother is moving into retirement living. Is that a common pattern right now?
It's becoming more common. Older homeowners are realizing their equity is substantial, and they can use it to help their kids while also simplifying their own lives. She gets out of the maintenance burden and into a managed community. Her son gets into the market. It works for both of them.
What about those suburbs everyone actually wants—Marrickville, Newtown? Are they just out of reach now?
For most first-home buyers, yes. The prices have climbed so high that you need either a very large deposit or family help. Ashfield is close enough—same general area, same vibe, same access to the foodie culture—but cheaper. It's the compromise that makes entry possible.
The Dural house sold below reserve. Is that a sign the market is softening?
It's a sign that in some segments, sellers' expectations haven't caught up with reality. That vendor had built the house 40 years ago and probably had a number in mind. The market said no. But it's also a smaller sample—one property, one moment. You can't read too much into it yet.