Sydney’s multi-billion-dollar property market has ground into a high stakes stand-off, as fears of another rate hike later this month have deepened uncertainty for both buyers and sellers amid the typical spring selling frenzy, with only the cheapest suburbs recording higher levels of demand.
The market, currently in a downturn following three interest rate rises, while changes to negative gearing, CGT and SMSF purchasing have added to uncertainty.
Property experts are spotlighting interest rates as the dominant factor shaping buyer confidence and determining how much activity the market will see this spring.
HighSpec Properties Buyer’s Agents Director Amanda Gould said many properties are attracting only one or two buyers, unless they are priced below $1m.
“We’re starting to see a few more buyers at home opens, but they’re still very hesitant,” she said.
“We only have one to two buyers per property unless it’s under a $1m. Good properties are still selling, – around that $800,000 – $950,000.”
An auction in Sydney in at the start of the spring selling season in 2025. Picture: Julian Andrews.
This comes as realestate.com.au data shows affordable suburbs are seeing the highest demand with Sydney’s west recording some of the strongest annual growth in buyer enquiries.
For houses, Silverwater, Glen Alpine, Harris Park, Chippendale and Bowen Mountain recorded annual growth in key enquiries above 50 per cent.
For units, Kincumber, Wyoming, Concord West and Bonnyrigg recorded this growth above 60 per cent.
Senior Economic Analyst at REA Group Megan Lieu said affordability was the driving factor for the data, with six out of 10 of the suburbs for the houses sitting below the Sydney median house value of $1.5m.
“With the affordability of homes within NSW being at the lowest that they have on ever being on record, I think a lot of demand is a bit higher for the affordable areas currently,” she said.
Ms Lieu said this also reflected buyers being drawn to suburbs with larger plots of land for houses, while turning to units in suburbs where houses were beyond their budgets.
“The gap between houses and units are quite big in those areas,” she said.
“For example, in Concord West houses are $2.7m and units have a median of $750,000.”
Auctioneer Clarence White of Menck White Auctions said auction volumes are significantly lower compared to previous years.
32 Wattle Street, Bowen Mountain sold for $970,000 in July
Auctioneer Clarence White at an auction in Sydney in 2023. Picture: Julian Andrews.
“There’s a lot of vendors not coming to the market because they’re reluctant to wade into a difficult situation,” he said.
“We’re seeing a higher incidence of properties either being postponed or withdrawn from auction.
“We’re definitely having to work hard and we’re having to negotiate a lot to get deals across the line.”
Mr White said he has little expectation of a significant short-term shift back towards a seller’s market, with interest rates remaining the number one factor for any potential change.
“There’s other factors that are at play, but I think interest rates are the big limiting factor,” he said.
“You might see confidence improve significantly if we started to get some rate cuts. But realistically, that’s next year and how far into next year is impossible to predict.
“I’d say we’re probably seeing the market that we have right now for at least this year and possibly extending into next year.”
Ms Gould said if a further interest rate rise did it occur, it would suppress the market even more.
MORE: Suburbs set to recover from real estate crash first
Airlie Mcconnell and Jonathan Rush are selling their home at 11 Shirley Road, Roseville. Picture: Jeremy Piper
“It really all depends on interest rates,” she said. “I think the government’s hit us so many blows with negative gearing, changes to CGT, and not being able to buy properties in SMSF, that it’s actually halted the market.
“If we have interest rate rises, I think it will kill the market even further. If interest rates stay steady and drop next year, like they have been predicted to do, I think we’ll see more activity.”
For vendors, the subdued market means adjusting price expectations to secure a sale.
Airlie McConnell and Jonathan Rush are currently selling their home at 11 Shirley Road via agent Ray White Upper North Shore’s Jessica Cao
Having lived in the family home since she was 16, Ms McConnell said it was the right time for her family to make the sale, but pointed to the current trying market conditions.
“Any sale of any house is stressful, but I guess but particularly at the moment because there are so few buyers,” she said.
“We’ve had to drop the price considerably.
“Now that we’ve dropped it to a price that obviously buyers think is a good price for our property, we are actually seeing more people coming through the door, which is great.”
Airlie Mcconnell and Jonathan Rush had to considerably lower the price of their Roseville home for sale in the current market. Picture: Jeremy Piper
Ms Cao said there hasn’t been the usual increase in stock levels for the start of spring.
“Usually spring is the peak selling season, and we usually have more listings on the market for buyers to choose from. But this year, it seems that’s the missing part and we are running a stock level very similar to winter,” she said.
Ms Cao said vendors were also needing to price their property for the current market.
“In any market, if a seller wants to sell, they need to work with the agent and understand where the markets are and where they should be pitching,” she said.
“In this market is, especially so.
“Everyone’s getting used to the new market conditions and if you can understand where your competition is and you can price your property correctly, then there are buyers around.”
Suburbs with the largest annual growth in key enquiries (demand)
Rank Suburb Property Type Annual % change in key enquiries per listing
1 Silverwater House 68%
2 Glen Alpine House 64%
3 Harris Park House 58%
4 Chippendale House 54%
5 Bowen Mountain House 51%
1 Kincumber Unit 130%
2 Wyoming Unit 91%
3 Concord West Unit 73%
4 Bonnyrigg Unit 68%
5 Cabramatta Unit 63%