Sydney’s housing market is showing early signs of a potential upswing, with auction clearance rates climbing and buyer sentiment improving. According to multiple indicators, property values in Australia’s most expensive city could be stabilising or even preparing for a new growth phase.
While affordability concerns persist, key indicators suggest renewed confidence in Sydney’s residential market. Strengthening auction results and increased buyer expectations are contributing to speculation about an upward trend in property values.
Auction Clearances Point to Stronger Property Market Demand
Auction clearance rates across Sydney have risen steadily over the past month, with the latest figure reaching 71.7%—the highest among all Australian capital cities. According to Cotality data cited by MacroBusiness on 21 August 2025, this marks the third consecutive week in which Sydney’s clearance rate has exceeded 70%. On a rolling monthly basis, Sydney’s auction performance is now at its strongest since February 2024.
This rebound in clearances is widely interpreted by analysts as an early indicator of rising market activity. Historically, elevated clearance rates have tended to precede price growth, reflecting increased buyer competition and limited supply. The Australian housing market has responded similarly in past cycles, where sustained clearance rates above 70% often marked the beginning of new upward phases.
Contributing to this shift is a broader change in buyer expectations. A recent Westpac consumer survey noted that house price expectations across New South Wales are now at cyclical highs, with growing numbers of respondents viewing current conditions as favourable for purchasing property. While no official price surge has been recorded, such sentiment can often influence short-term market behaviour.
Buyer Confidence Fuels Positive Outlook
Alongside auction activity, preliminary price data also point to a possible recovery. According to Cotality’s 28-day rolling index, Sydney’s dwelling values have registered a modest 0.8% increase. Though not a conclusive trend, it reflects a market no longer in retreat, which aligns with improved buyer outlooks.
This confidence is underpinned by recent monetary policy moves. Following rate cuts by the Reserve Bank of Australia earlier in 2025, borrowing conditions have become more favourable. This has improved purchasing capacity for many would-be buyers, supporting increased engagement in both auctions and private sales.
Market sentiment is further shaped by continued strong migration and persistent underbuilding, particularly in Sydney’s inner and middle-ring suburbs. According to MacroBusiness, these structural factors remain key supports for medium-term price stability.
While some economists caution against overinterpreting short-term data, the alignment of sentiment, activity and early price movement suggests Sydney’s property market may be entering a new phase of moderate recovery.
