By Julian & Renee (Australia) – with writing support from Alberto Aldana (Colombia)
The war in Iran escalated in late February 2026 and is causing disturbances in the global economy. Sydney is now beginning to feel the ramifications of the conflict. Tensions in the region have hindered oil shipping through the Strait of Hormuz, pushing oil prices higher on global markets. Sydney has witnessed a steep rise in fuel prices, placing heavy pressure on the cost of living as well as the property market. It is worth examining what this volatility means for property buyers, sellers, and agents as we enter this financial phase.
The war has most notably caused fuel prices to increase in recent weeks. In early March 2026, Brent crude oil prices rose quickly from about $70 per barrel to over $110. These developments followed disruptions to oil production in the Middle East, which have reduced supply by about 6.7 million barrels per day. As a result, fuel prices across Sydney are rising sharply. In just a few days, the price of diesel at the bowser in Sydney increased from 169.7 cents per litre to 221.2 cents per litre. Experts now say petrol could soon reach $2.40 per litre. The fuel price increase not only raises fuel costs but also increases transport costs for goods, contributing to overall price rises across the economy.
The rising cost of living in Sydney is now placing pressure on supply chains. Due to higher fuel prices, it costs more to transport food and goods to supermarkets, which will likely lead to higher retail prices. Meanwhile, economists now believe inflation in Australia could peak at around 5% in Q2 2026 due to energy price shocks. Rising costs may also affect the Reserve Bank of Australia’s approach to interest rates, potentially leading to further rate increases. The RBA aims to bring inflation back to the 2–3% target range, but this is becoming increasingly difficult because inflation remains “sticky.”
For property buyers in Sydney, this is where the impact becomes more direct. The RBA’s tightening of interest rate policy has already reduced borrowing power. As interest rates rise by 0.25%, buyers’ borrowing capacity may fall by roughly $11,000–$15,000. Many buyers may no longer be able to afford the homes they previously considered. Higher mortgage rates may also affect property transactions as lenders become more cautious. The finance could become a greater obstacle for buyers as the risk of loan pre-approvals being reduced increases. As a result, the market may slow despite Sydney’s ongoing housing shortage, which typically supports strong demand.
In times of uncertainty, professional guidance becomes even more important. At Flash Conveyancing, we help clients navigate property transactions, including understanding the legal and financial requirements involved. Whether you are buying, selling, or require assistance with conveyancing, Julian and Renee at Flash Conveyancing aim to make the process smooth and stress-free. Their experience working with local councils such as Blacktown, Hawkesbury, Blue Mountains, and Parramatta allows them to tailor each settlement to the client’s situation.
Our team has a proven track record of working seamlessly with the Blacktown, Hawkesbury, Blue Mountains, The Hills Shire, Hornsby, and Parramatta councils.
North-West Growth Corridor: Marsden Park, Box Hill, Schofields, Tallawong, Riverstone, Gables, Melonba, Grantham Farm, and Angus.
The Hills District & Surrounds: Castle Hill, Kellyville, North Kellyville, Bella Vista, Baulkham Hills, Beaumont Hills, Norwest, Rouse Hill, Winston Hills, and Westmead.
Blacktown City & Established West: Blacktown, Seven Hills, Glendenning, Glenwood, Stanhope Gardens, The Ponds, Quakers Hill, Kings Langley, Parklea, Acacia Gardens, Arndell Park, Rooty Hill, and Doonside.
Hawkesbury & Lifestyle Estates: Dural, Middle Dural, Kenthurst, Glenhaven, Galston, Glenorie, Annangrove, Nelson, Cattai, Maraylya, Vineyard, and Windsor.
Parramatta & Emerging Hubs: Parramatta, Northmead, North Rocks, North Parramatta, Wentworthville, and St Marys.