Where interest rate cut has bumped Sydney home prices up $200k

Interest rate cuts have fuelled another upswing in home prices across much of Sydney,

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Interest rate cuts have fuelled another upswing in home prices across much of Sydney, with values rising in three quarters of city suburbs over the last three months.

Exclusive PropTrack data showed the rises were as high as 5-6 per cent in many areas over the period – a greater increase than what most Aussie suburbs usually get in a full year.

Most of that growth came in the weeks after the Reserve Bank slashed the cash rate by 0.25 per cent in mid-February.

The bumper property price growth broke a period of softer conditions in the housing market that had started in spring.

PropTrack’s latest Quarterly Home Value Data showed prices rose in 75 per cent of Sydney suburbs since the end of December.

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House prices in Sydney have boomed again after a February rate cut, pictured is first home buyer Desmond Mururi.

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With affordability testing Sydney buyers, affordable pockets were hotly contested and had some of the biggest price hikes in the quarter.

Higher-end luxury markets also experienced larger price rises as the rate cut reignited buyer confidence and boosted borrowing capacities.

Sydney’s median home price is now sitting at $1.104m as of March, and prices are expected to continue to rise with the anticipation of more rate cuts.

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Units in Fairfield East, previously priced under $580,000 had the biggest growth increasing by 12.1 per cent or $70,000, according to PropTrack data.

Affordable units had seen a spike in prices after the rate cut.

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Other affordable pockets where median unit prices were under $650,000 including Ropes Crossing, Picton, Berkeley Vale, Marsden Park and Warwick Farm had jumped up between 3-5 per cent in the past three-months.

Higher-end housing markets had also benefited from the rate cut including Coogee, Crows Nest, Cronulla and Clovelly experiencing price rises between 5-6 per cent over the last three months, up to $200,000 higher than the previous quarter.

REA Group senior economist Angus Moore said the rate cut has been the biggest amplifier to Sydney’s home prices over the quarter.

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“We’ve seen one rate cut and many are expecting more cuts to come. With more borrowing capacity, that’s going to impact house prices,” he said.

PropTrack economist Angus Moore is expecting more rate cuts and higher prices to come.

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Mr Moore said further rate cuts could boost prices even higher but the market on the whole may start to get a little more affordable due to cheaper loan repayments.

“We are expecting further home price growth on the back of rates coming down, but not at the same rate we have seen over previous years,” he said.

Some areas had only shifted slightly or stayed stagnate over the quarter.

Ray White Upper North Shore sales agent Liana Power said one rate cut hadn’t made enough of a difference to shift prices in the region yet.

“People can’t borrow that much more yet especially for someone who had already gone through the pre-approval process,” she said.

Ray White agent Liana Power said there would be more rate cuts needed to see bigger effects in the Upper North Shore. Picture: Richard Dobson

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“There definitely was a lot more buyers out after the first initial rate cut, there was a lot of energy in the market … but they seem to be hanging out for more (cuts), most buyers were hoping for a drop with this April announcement, a hold doesn’t typically move the market.”

As affordability continues to challenge Sydneysiders, first-home buyers are looking for alternative options to get into the increasingly challenging housing market.

Desmond Mururi, a 22-year-old support worker from Sydney’s southwest has recently purchased his first property after saving for four years while living at home with his family.

“I know I am fortunate to be living with my family. I wanted to make sure that I was smart and saved for a property during this time so I could get ahead,” he said. “It’s always been a goal of mine to buy a property … but (Sydney’s house) prices are scary,” he said.

Desmond Mururi, 22, has just purchased his first home in Granville. Picture: Jonathan Ng

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Mr Mururi purchased a property off the plan using a $10,000 deposit and was paying off the rest of his deposit through Coposit while he was still able to live at home.

“My older sister bought her own house and she told me (despite high prices) it was possible, it’s just a matter of being focused,” he said.

He purchased an affordable two bedroom unit off the plan at Ellipse Property’s latest Granville development ‘East+Cowper,’ where prices started at $550,000, almost $300,000 lower than the median priced unit in Sydney.

Ellipse Property’s Puja Khanna said many first home buyers were drawn to the price point of the development with the building purposefully excluding amenities like a gym and swimming pool to keep strata costs lower for buyers.

“With continued interest rate cuts expected throughout 2025, combined with the availability to use Coposit, it is a great time for young people to get into their first property,” Mr Khanna said.

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