Prior to European settlement, the area was inhabited by indigenous Aboriginal Australian, Gadigal and Wangal people. Stories from early settlers in the area tell of how the local indigenous people used to hunt kangaroo by driving them through the bushy peninsula, down the hill to Peacock Point at the east end, where they were killed.[citation needed]

The area now known as Balmain was part of a 550-acre (2.2 km2) grant to colonial surgeon Dr William Balmain (1762–1803) made in 1800 by Governor John Hunter. A year later, Balmain transferred his entire holding to settle a debt to John Borthwick Gilchrist before returning to Scotland. The legality of the land transfer from Balmain to Gilchrist for only 5 shillings was challenged by Balmain's descendants and further development of the area was blocked. The area subsequently became known as Gilchrist's place, though court documents refer to the area as the Balmain Estate.

During the many years of legal challenges, the land was leased for farming and cattle purposes. In 1814 the adjacent homestead of Birchgrove was sold to Roland Warpole Loane, a merchant and settler descended from a family of English landlords. One hundred acres on the adjoining Balmain estate were leased to Loane  (Wikipedia)