Sydney gets biggest home price jump in a year after February interest rate cut


Interest rate cuts have blasted hot air on what had been a dying fire in the Sydney housing market, with a bounce in prices over February breaking a six-month streak of weaker market conditions.

PropTrack’s latest Home Price Index revealed Sydney prices increased by an average of 0.5 per cent over the month – the first meaningful rise in citywide prices since August and the biggest rise in a year.

Prices had been falling over December and January, while growth over the spring months was minor to the point of essentially being flat.

Housing experts had long warned that an interest-rate cut would drive an “immediate” resurgence in prices – especially in Sydney due to the higher levels of debt required to enter the market.

MORE: Hemsworth’s $50m payout reveals secret Aussie life

Sydney's Worst House Ever? Goes to Auction Today

Auction activity has been rising again after rates were cut in February.


MORE: Least trustworthy tradies revealed

Ray White chief economist Nerida Conisbee told The Daily Telegraph just prior to the rate cut that Sydney had a history of more volatile reactions to interest rate cuts.

“Sydney is a lot more sensitive to interest rate changes than other cities and usually gets the biggest increase in prices when there is a rate cut,” Ms Conisbee said.

SQM Research director Louis Christopher said a rate cut would put an instant break on price falls and he predicted the cash rate drop would drive stronger price rises later in the year.

PropTrack revealed that the median price of a Sydney dwelling, based on sales of units, townhouses and apartments, is now just under $1.1m.

That median is about 2.6 per cent higher than it was at this time last year, with February’s growth accounting for about a fifth of the annual increase.

MORE: Blacklisted: suburbs where homes are risky buys

Economist Eleanor Creagh said the rate cut improved buyer sentiment.


MORE: Bombshell for savers after dirty banks move

REA Group economist Eleanor Creagh said rate cuts have driven up prices by improving the amount buyers can spend, while also boosting confidence.

“Market sentiment has improved now that interest rates have started to move lower,” she said.

“The prospect of rate cuts had already buoyed sentiment, with clearance rates strengthening in every capital city in early February compared to the final months of 2024.”

Ms Creagh added that demand was picking up. “There were a lot of buyers who put off purchases in previous years when interest rates were going up and they’re now re-entering the market,” she said.

Darmo Aerial

Sluggish building activity has meant the supply of housing is still short of demand.


“Beyond interest rates, structural factors underpinning home prices remain at play. Population growth remains elevated, though has begun to moderate, and a chronic shortage of new homes remains.”

More price rises were expected over the rest of the year but there was little chance of runaway price growth, Ms Creagh said.

“Poor affordability will likely dampen the uplift in prices compared to prior easing cycles, resulting in the pace of home price growth trailing the strong performance of recent years.”



Source link

  • Related Posts

    Blackstone to buy 40% stake in India’s Kolte-Patil Developers for $134 million, ET RealEstate

    representative image U.S. investment firm Blackstone will purchase a 40% stake in Indian real estate developer Kolte-Patil Developers in a deal worth 11.67 billion rupees ($134 million), the latter said…

    Cities Emerging as India’s Next Real Estate Powerhouses: Ashwinder R. Singh Offers an Expert Analysis of The MINT Report | The Property Times

    Mysuru, Indore, Nagpur, and Thiruvananthapuram Poised to Lead India’s Real Estate Evolution Through 2025 New Delhi, March 13, 2025: In a compelling expert analysis of The MINT Report: India’s Next Real…

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You Missed

    Canberra light rail charges ahead

    Canberra light rail charges ahead

    Blackstone to buy 40% stake in India’s Kolte-Patil Developers for $134 million, ET RealEstate

    Blackstone to buy 40% stake in India’s Kolte-Patil Developers for 4 million, ET RealEstate

    Case Study – All My Precious Slate

    Case Study – All My Precious Slate

    $1B for Western Sydney transport corridor

    B for Western Sydney transport corridor

    Cities Emerging as India’s Next Real Estate Powerhouses: Ashwinder R. Singh Offers an Expert Analysis of The MINT Report | The Property Times

    Cities Emerging as India’s Next Real Estate Powerhouses: Ashwinder R. Singh Offers an Expert Analysis of The MINT Report | The Property Times

    Minnesota Twins and Uponor Launch Multi-Year Partnership Focused on Sustainability and Community Impact

    Minnesota Twins and Uponor Launch Multi-Year Partnership Focused on Sustainability and Community Impact