By Julian & Renee (Australia) – with writing support from Alberto Aldana (Colombia)
The global economy is always vulnerable to shocks, one of the most well-known examples being the oil crisis of 1973. This event reshaped the global economy and highlighted the critical role energy plays within it. In the context of the Sydney property market and broader economic outlook, similar tensions in the Middle East today invite comparisons with past events.
The oil crisis was triggered by the Arab-Israeli conflict in 1973, particularly the Yom Kippur War in October. Western countries, especially the United States, supported Israel during the conflict. In response, OPEC (Organization of the Petroleum Exporting Countries) imposed an oil embargo on several Western nations.
This action caused oil prices to rise sharply, from around $3 per barrel to nearly $12. The sudden increase in fuel costs led to long queues at petrol stations and encouraged a shift toward smaller, more fuel-efficient vehicles. Economically, this period was marked by high inflation and low economic growth, a condition later described as stagflation. Concerns about similar conditions have re-emerged in 2026, as inflationary pressures persist.
Today, global markets are once again facing uncertainty linked to tensions in the Middle East. Developments involving Iran and disruptions to key shipping routes, including the Strait of Hormuz, have contributed to rising oil prices. By 2026, Brent crude prices have been trending upward, raising concerns about potential global economic impacts. As seen in the 1970s, increases in energy prices can contribute to higher inflation, affecting the cost of goods, services, and housing. In Sydney, rising fuel costs are already placing pressure on household budgets, which may influence both property buyers and sellers.
Rising energy costs can influence the real estate market, particularly when combined with higher interest rates. As borrowing costs increase, buyers may face reduced borrowing capacity. For example, a 0.25% increase in interest rates can reduce borrowing capacity by approximately $11,000 to $15,000, depending on the loan. These financial pressures, combined with rising living costs, may affect buyer demand. Sellers may also encounter challenges with pricing, timing, and market conditions as uncertainty increases and demand potentially softens.
Participants in the conveyancing process may face additional risks during periods of economic instability. Rising interest rates and inflation can impact finance approvals, increasing the likelihood of delays or complications with “subject to finance” clauses. Buyers may find that previously pre-approved loan amounts are reduced, while sellers may need to adjust expectations in response to changing market conditions. In this environment, an experienced conveyancer plays an important role in helping both parties navigate the process and manage potential risks.
At Flash Conveyancing, Julian and Renee specialise in property transactions across New South Wales. With extensive experience working with local councils including Blacktown, Hawkesbury, Blue Mountains, The Hills, Hornsby, and Parramatta, we bring a personalised approach to every settlement. We assist clients in preparing for economic conditions that may affect their property transactions, whether buying, selling, or reviewing an investment property. In uncertain times, clear communication and professional guidance are essential, and we work closely with all parties to help ensure transactions proceed as smoothly as possible.
Our team has a proven track record of working seamlessly with the Blacktown, Hawkesbury, Blue Mountains, The Hills Shire, Hornsby, and Parramatta councils.
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