Auctioneer Andrew Robinson at a recent Sydney auction – clearance rates have been on the rise. Picture: Tom Parrish
Sydney home prices have torn even further away from the rest of the country after another month of accelerated growth fuelled by recent interest rate cuts.
PropTrack’s latest Home Price Index released Tuesday showed Harbour City home prices last month notched one of the biggest monthly gains in close to a year, increasing 0.5 per cent over June.
The bumper growth pushed up the median price of a city house to an unprecedented $1.55 million – about $500,000 pricier than houses in the country’s next most expensive capital, Brisbane.
The Queensland capital was the only other major Australian city with a median house price above $1 million, a milestone it surpassed for the first time in June.
Sydney’s median unit price hit $858,000 over the month – an average of about $150,000 higher than units in Brisbane and nearly $250,000 pricier than typical apartment costs in Melbourne.
MORE: One in six unit projects now ‘ghost’ towers
MORE: Ugly way build crisis is driving up everyone’s bills
Prices for all Sydney dwellings are now an average of about $50,000 higher than at this time last year, according to PropTrack.
Monthly rises have been steadily increasing since the Reserve Bank announced the first of two cuts to the cash rate in February, with an increase in buyer demand matched by dwindling listing numbers.
REA Group economist Eleanor Creagh said interest rate cuts were the driving force behind much of the market momentum.
The increased borrowing power from lower interest rates encouraged more property buyers to bring forward their plans to purchase, Ms Creagh said.
The prospect of further easing in rates had the extra effect of boosting buyer confidence and making buyers more comfortable placing higher offers, she said.
MORE: Sneaky bank move costing you thousands
REA Group economist Eleanor Creagh said buyer confidence was growing.
She expected this pattern to continue for the rest of the year given high expectations of another rate cut in July, plus further cuts, but she noted that poor affordability would moderate coming price rises.
“The upturn remains gradual and stretched affordability will see a more measured upswing than in previous (rate) easing cycles,” she said.
Ms Creagh added that an imbalance of demand and supply were exacerbating the growth stimulus from lower interest rates.
“Population growth and limited new supply are also placing upward pressure on prices, especially at the more affordable end of the market,” she said.
“With interest rates moving lower, these factors are likely to sustain price growth over the second half of 2025.”
Unit price growth was slower than house price growth.
Price growth was varied across Sydney regions.
The CBD and inner south had the largest gain in prices over the past quarter, increasing 3.42 per cent.
The northern beaches and southwest were some of the other leading markets, with average quarterly rises of 2.46 per cent and 2.63 per cent, respectively.
Growth was more subdued in Blacktown, where the average rise was 0.4 per cent, and on the north shore, where the average increase was 0.93 per cent.
Pella Real Estate agent Michael Dowling, fresh off the back of two record $4 million-plus house sales in Ryde, said there was a renewed sense of “FOMO” in the market as buyers scrambled for limited stock.
English (US) · 