Sydney home price growth slows as Trump tariffs, election weigh on sentiment

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Pre-election jitters among property buyers and rising uncertainty about the impact of Trump tariffs on the global economy have been dragging on home prices, with values barely inching up over April.

Sydney’s median dwelling price grew by about 0.1 per cent over the month, adding about $1000 to the average cost of housing, PropTrack’s latest Home Price Index revealed.

It’s a change from earlier in the year when the Reserve Bank’s decision to cut interest rates spurred a rebound in the housing market that saw prices rise by the fastest pace in nearly a year.

April’s modest growth pushed Sydney’s median price – based on sales of units, townhouses and houses – to a new peak of $1,118,000, according to PropTrack. Houses now cost an average of about $1.46 million and units $819,000.

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US President Donald Trump’s proposed tariffs have created an air of uncertainty that has spread to the Aussie housing market. Picture: Getty

REA Group economist Anne Flaherty said uncertainty about the economic impact of Trump tariffs was weighing on buyer sentiment.

“When people are unsure of what’s going on they will be more hesitant,” she said.

“But Trump tariffs have also likely brought forward the timing of a rate cut and that will probably have a bigger impact on the market going forward than the economic (climate).”

The last interest rate, announced in February, gave the market something of a sugar hit but that boost was waning over recent month, Ms Flaherty said.

This trend would change if rates were cut again in May – the expectation of Westpac chief economist Luci Ellis, who said a rate cut was as good as “locked in”.

“Should interest rates fall in May, we may see the rate of growth pick up again as borrowing capacities increase and mortgage repayments decline,” Ms Flaherty said.

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She added that some of the drop off in homebuyer demand over April likely came from the first-home buyer market, with many looking to the election with trepidation.

With both major political parties promising significant first-home buyer support packages, some would-be first-time buyers may be biding their time till after the election, Ms Flaherty said.

“Whichever party is elected, the combination of increased first homebuyer incentives, lower interest rates, and supply side challenges are expected to contribute to even higher property prices in 2025.”

Price movements have varied across Sydney regions since the February rate cut.

The biggest price increase occurred in the inner west, where home values rose by an average 2.6 per cent over the three months.

REA Group economist Anne Flaherty said uncertainty was affecting buyer demand but it could also lead to a rate cut sooner than expected.

Sydney’s inner southwest, including much of the St George area and Canterbury-Bankstown, recorded a 2.03 per cent rise over February, March and April.

Other significant growth markets were Parramatta (1.87 per cent growth over the quarter), The Central Coast (1.81 per cent) and the Sutherland Shire (1.49 per cent).

Growth was the softest in the Ryde area (0.58 per cent), eastern suburbs (0.68 per cent) and the outer west and Blue Mountains (0.64 per cent).

Avenue Auctions director Andrew Cooley said some level of reduced buyer demand in the lead up to an election was to be expected.

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Auction activity has been more subdued ahead of the federal election. Picture: Sam Ruttyn

“It’s not about any of the political parties,” he said. “It’s more that it’s a huge decision for most people and they often put off buying until they have more certainty about how things are going.”