The Sydney Property Market – March 2025

The Sydney property market saw steady growth through most of 2024, outperforming initial forecasts. However, as the year progressed, momentum began to slow. Clearance rates weakened, and monthly growth figures shifted into negative territory, indicating a softening market. By late 2024, buyers had greater opportunities to secure properties at more favourable prices—something not seen in quite some time.

In contrast, 2025 started with strong activity, driven by a surge of early listings in January and February. While listing volumes have since moderated, auction clearance rates have remained relatively high, generally sitting in the high 60% to low 70% range.

That said, market conditions are far from uniform.

Performance across Sydney varies significantly based on location and property quality. Well-presented homes in sought-after suburbs continue to attract strong competition, often selling above price guides—though this can, in part, be attributed to the ongoing practice of agent underquoting. Meanwhile, properties with less desirable features, such as busy road frontages, awkward floorplans, or compromised locations, are facing a more cautious buyer pool and weaker competition.

While most open homes continue to draw good attendance, buyers are becoming more discerning. This is increasingly reflected on auction day, where we are ofter seeing fewer serious bidders actively competing.

Despite this, Sydney’s property market remains underpinned by strong fundamentals. Demand continues to outstrip supply, and with high levels of immigration adding further pressure, we do not anticipate any significant price softening in the short to medium term.

Sydney property market statistics

Growth figures

According to the CoreLogic RP Data Home Value Index as of 28 February 2025, Sydney dwelling values (houses and units combined) have recorded an increase of 0.3% for the month of February and an annual increase of 1.1%.

Sydney dwelling values are now -1.6% below the record high which was in September 2024.

When looking at houses, growth rates have come in at 1.3% annually and o.3% for the month of February. This is compared to units, recording 0.7% annually and 0.2% for the month of February.

The strongest growth for dwellings across Australian capital cities remains Perth, with an annual growth rate of 14.3% . Melbourne is the weakest market, experiencing an annual decline of -3.2%. However Melbourne (alongside Hobart, another poor performing city over 2024), has recorded the highest growth rate across capital cities for the month of February at 0.4%.

It’s important to recognise that these figures represent average values across Sydney as a whole and do not accurately capture the conditions or trends in specific suburbs or local areas. Real estate markets vary significantly from one area to another, with some experiencing higher demand, faster growth, or unique market dynamics. Therefore, these averages should be used as a general guide rather than a precise reflection of every suburb’s property market.

Auction clearance rates

With the exception of the opening auction weekend of 2025, the year has began on a strong note, with clearance rates in the late 60s to early 70s percent range. News of the first interest rate reduction since

Similarly to the market growth rate figures, it’s important to understand that the clearance rate represents an average across all suburbs and does not uniformly reflect the strength or weakness of the market.

Interest rates

Since May 4, 2022, the Reserve Bank of Australia (RBA) has implemented a staggering thirteen interest rate hikes, raising the rate from a historic low of 0.1% to 4.35%, the highest level in twelve years. These increases were aimed at curbing inflationary pressures.

The recent RBA meeting in February 2025 has delivered slight relief for mortgage holders with a welcome reduction in rates of 0.25% – from 4.35% to 4.1%.

The RBA remains vigilant, committed to bringing inflation back to target within a reasonable timeframe. The latest Statement on Monetary Policy released in February 2025 states:

“The Reserve Bank Board decided to lower the cash rate target by 25 basis points, acknowledging disinflation progress, but the Board is cautious about the outlook.

Monetary policy has been restrictive and will remain so after this reduction in the cash rate. However, the outlook remains uncertain. In removing a little of the policy restrictiveness, the Board acknowledges that progress has been made but is cautious about the outlook”.

Rental vacancy rates

According to SQM Research, Sydney’s rental vacancy rate has come in at 1.5% for the month of February 2025. This represents a slight increase from 1.4% in January 2025, and a larger increase when compared to 12 months ago at 1.1%.

We do believe though that a significant increase in supply is necessary before tenants can expect any substantial relief.

Sydney property market observations

2025 started off with a higher than normal supply of houses and units in our areas of operation. As the year has progressed we have noticed the number of properties for auction or for sale falling, however the number of off-market listings appears to be higher than normal.
Quality properties in popular locations are still attracting good interest from buyers, however compromised properties (eg on main roads, with poor floor plans etc), are finding it more difficult to find competition than at the peak of the market in late 2025.
Buyer confidence is reasonable, and now slightly buoyed the first interest rate reduction in February 2025.
The Sydney market has seen a resurgence of overseas buyers, coinciding with a notable increase in overseas students and immigration following the prolonged border closures during the pandemic
In response to housing pressures, the Federal Government has announced two key measures: a temporary reduction in immigration figures in the short term and increased taxes on overseas buyers who leave their properties vacant.
First-time homebuyers are re-entering the market, particularly at the lower end, with a strong focus on apartments. This trend is being driven by the recent and significant rental price increases, making the prospect of purchasing a home more financially appealing.
Investor activity is mixed; some investors are selling due to rising mortgage repayments, while others are capitalising on the tight rental market, drawn by the prospect of increasing returns.
The appeal of the classic “renovator’s delight” has waned, as rising construction costs and a reduced appetite for large-scale renovations have made these properties less interesting for buyers. In contrast, the knockdown-and-rebuild approach remains a preferred strategy in many Sydney suburbs, allowing buyers to create modern, custom-built homes without the complexities and uncertainties of a major renovation.
The NSW Government has unveiled extensive rezoning plans for Sydney, particularly near transport hubs, to facilitate the creation of a substantial number of new dwellings, primarily apartments, aimed at alleviating housing pressures across the region. These changes will have a profound impact on many suburbs, particularly large areas of the north shore as older style housing on large blocks of land makes way for low and medium density housing.

Where to from here?

In recent years, the Sydney property market has become increasingly hard to predict, shaped by a complex mix of global and domestic influences. Events such as COVID-19 lockdowns, inflationary pressures, and rising interest rates have all played significant roles. Additionally, international political uncertainties—ranging from the ongoing conflict in Ukraine and the Middle East have added further layers of difficulty. These factors make it challenging to forecast future market trends with certainty.

However, despite these uncertainties, the fundamental drivers of the Sydney property market remain intact—most notably, the persistent imbalance between supply and demand. We believe these factors will continue to support a relatively stable market into 2025, with opportunities still available for buyers.

That said, in the current market, buyers must be more strategic than ever. Ensuring you do not overpay requires thorough due diligence, a strong understanding of fair market value, and a careful approach to negotiations. It is also crucial to stay informed about the NSW Government’s recent planning legislation and how changes to zoning could impact the area in which you intend to buy. New zoning regulations may affect future development, neighbourhood density, and medium to long-term property values, making it essential to factor these considerations into any purchasing decision.

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