An easing economic pathway and electoral clarity.

The Reserve Bank’s lowering of the cash rate by 25 basis points to 3.85% delivered a timely boost to buyer and seller confidence. This was reflected in BresicWhitney’s monthly results, with the leading property group transacting on close to $240,000,000 of sales in May. This represents an uplift on April’s figure of $211,000,000.

Beyond providing immediate financial relief, the psychological impact of the rate cut has played a role in lifting sentiment among buyers and sellers.

While the Westpac–Melbourne Institute’s sentiment index has shown volatility for much of the year - particularly in response to global tariff tensions – its May result rose 2.2%, to 92.1 from 90.1 in April.

Rate reductions have historically aligned with improved buyer confidence and increased transaction volumes, according to BresicWhitney. The decisive Federal Election result, which saw the Labor Government returned with a convincing majority in May, also helped restore a sense of certainty. 

Evidence of the Sydney market’s swift response was reflected by Cotality Australia’s (formerly CoreLogic) auction figures for the weekend immediately after the rate cut. This revealed a preliminary auction clearance rate of 71% - the first 70% + preliminary clearance rate in 10 weeks. BresicWhitney’s auction clearance rate for May was 88%, up from 71% in April and 85% in the same period last year. 

BresicWhitney CEO Thomas McGlynn said, “Last Winter we saw very strong transaction levels and an early start to Spring. It’s possible we’ll see similar conditions this year. The bounce back that we saw in May bodes well for balanced and healthy buying and selling conditions over the coming months. 

“The rate cut was certainly a lever that many buyers and sellers were waiting for. The fact that conditions came back to the level that we saw over May demonstrates the continual, underlying demand in the Sydney market. It’s something that we continue to see, even over prolonged periods of economic or political uncertainty.” 

Field notes.

Activity remained strong across the key lifestyle precincts, with consistent demand for well-located homes, encompassing both turnkey offerings and properties with potential for upgrades. Standout sales included the $6,890,000 sale of 19 Gale Street Hunters Hill, an original cottage held by one family for more than six decades. The auction result, significantly higher than the $4,500,000 guide and $4,800,000 reserve, was an unexpected outlier, said Mr. McGlynn, who was also the auctioneer of the home. 

“We had two parties competing for the home, both with an emotional connection to it, and a strong vision for its potential and future uplift in value. It’s testament to the unpredictable nature of the Sydney property market, and the appetite for homes that present once-in-a-generation buying opportunities.”

Other sales in May included a classic semi with preserved charm at 37 Macaulay Road Stanmore, that sold for $2,050,000 via BresicWhitney’s off-market platform, in just a matter of hours. A renovated terrace at 44 Nickson Street Surry Hills sold for $2,915,000 at auction. A double-fronted California bungalow at 23 Gears Avenue Drummoyne sold for $3,780,000 post-auction; while a five bedroom architect-designed home at 21 Young Street Redfern sold for $4,850,000 in a pre-auction negotiation. On the Lower North Shore, a penthouse apartment at 4/55 Prince Albert Street Mosman, sold for $5,300,000, also at auction.

Mr. McGlynn said that while May delivered strong results, the depth of buyer participation remained uneven. “This rate cut has helped many buyers feel like they can re-enter the market, but others are still waiting to see how far rates might fall. It’s possible that we won’t see full, broad-based participation across all price points, until closer to the end of the 2025 calendar year,” he said. 

Cotality reported a lift of 0.5% in Sydney dwelling values in May. The increase brought quarterly growth to 1.1% after April’s modest 0.2% increase, which was hampered by extended holidays, tariff and political uncertainty. 

Sydney’s median dwelling value now sits at more than $1.2 million, supported by limited forced sales and continued demand in key pockets. Continued growth in prices however remains restrained by affordability constraints and lender caution.

Investor caution lingers, but cycle begins to turn.

While owner-occupier interest continues to drive activity, investor sentiment remains subdued. Lending data from the Australian Bureau of Statistics for the March quarter, released in mid-May, showed investor loan commitments in NSW rose just 1.1% over the period - 16% below pre-pandemic levels. In contrast, lending for home renovations rose 13.6%, underscoring a preference among existing owners to improve, rather than move.

The prospect of improved investor numbers rest on the rate cut path, McGlynn said, although forecasts from major banks and economist vary. Commonwealth Bank predicts a further two cuts in 2025, taking the cash rate to 3.35% by year’s end. Westpac expects steeper easing, forecasting a rate of 2.25% by December. 

While most buyers are not planning around exact timelines, and favour opportunity, McGlynn said the trajectory alone is boosting confidence. “There’s a distinct understanding that the cycle is turning. For investors, that’s often a cue to engage with the market, especially those looking in areas that offer long-term capital growth, as many Sydney suburbs continue to. If you’re buying in a suburb with strong lifestyle appeal, good infrastructure, and limited future supply, that’s still a sound investment decision, regardless of where we are in the cycle,” he concluded.

Rental market holds, but pace cools.

Sydney’s rental growth has slowed, but demand remains steady across key precincts. Cotality data shows average rental prices for Sydney houses have risen just 1.4 per cent in the year to May, placing Sydney among the softest rental markets nationally. The figures point to a natural market recalibration shaped by affordability limits, and a more discerning tenant cohort, following years of steep gains.

BresicWhitney leased 142 homes in May, up from 93 in April 2025 and 95 in May 2024. This included 109 Middle Head Road Mosman ($4,000), 56 Little Riley Street Surry Hills ($2,500), 15 Harris Street Balmain ($1,260) and 14 Yerong Street Ryde ($1,200). Enquiry was strongest for well-presented two- and three-bedroom homes with proximity to transport, schools, and parks.

Head of Property Management Chantelle Collin said conditions remained competitive but measured. “We’re seeing more deliberate decision-making from renters, but quality homes are still sought after and moving quickly,” she said. “Investor activity has yet to lift in line with tenant demand, though signs of stabilisation are emerging. The first signs of rising investor participation are coming from those who understand the long-term value of holding in tightly held suburbs such as Redfern and Surry Hills and family-friendly precincts like Annandale and Balmain,” said Collin.

New rental legislation, which came into effect in late May, limits rental increases to once per year and strengthens protections for tenants with pets and long-term leases. While designed to improve balance, Collin said any long-term solution must support both sides of the market. “Encouraging private investment is still critical to maintaining rental supply and ensuring a diversity of options for tenants,” she said.