Last weekend, it appeared as if Sydney’s housing market may be faltering after the preliminary clearance rate fell to 55.9%, which was the lowest preliminary result this year.
Sydney’s final auction clearance rate subsequently fell to 58.1%, the lowest result this year.
The big caveat was that last weekend’s result was impacted by the King’s Birthday long weekend, which cut the number of auctions held by around one-third.
Alas, Sydney’s auction market rebounded strongly this weekend, recording a preliminary clearance rate of 70.5%, representing the first 70%-plus result in three weeks and only the second time in thirteen weeks that Sydney has recorded a preliminary auction clearance rate at 70% or higher.
Source: Cotality
Melbourne also recorded a 72.2% preliminary clearance rate, up from 71.5% the week prior (revised down to 65.9% once finalised). This represented the seventh consecutive week where Melbourne’s preliminary clearance rate held above the 70% threshold.
Sydney home value growth has also rebounded, rising by 0.6% over the past 28 days, according to Cotality.
This represents the strongest value growth for Sydney since March 2024.
The futures market continues to forecast another 0.25% decrease in the official cash rate in July, followed by two more rate cuts this year.
If true, the official cash rate would fall to 3.10% by the end of the year, a 1.25% decrease from peak.
Sydney, which is arguably the most interest-rate-sensitive market given its poor affordability, should experience the greatest stimulus from rate cuts.
The overall housing market will then receive further stimulus when the Albanese government’s 5% deposit scheme for first home buyers takes effect from 1 January 2026.
That said, Sydney experienced a 5.2% increase in for-sale listings in the year to May, versus a 2.1% decline in listings nationally.
Source: Cotality
Therefore, the increase in the supply of homes for sale in Sydney should work the other way and limit price increases.
