A two-bedroom house in Sydney’s eastern suburbs sold for $3.83 million, exceeding its reserve by $725,000, as buyer confidence resurfaces following the Reserve Bank of Australia’s (RBA) recent interest rate cut.
Meanwhile, a four-bedroom home in Roseville sold for $330,000 above its reserve, underscoring renewed demand in high-end property markets.
With auction clearance rates in Sydney and Melbourne surpassing 70%, analysts suggest that falling interest rates could be playing a key role in boosting buyer sentiment.
Interest Rate Cut Fuels Renewed Confidence
The RBA’s decision to lower the cash rate to 4.1% from 4.35% in February—its first cut in more than four years—has begun to influence buyer behaviour. According to The Australian Financial Review, this policy shift is helping to restore balance between supply and demand, potentially reversing last year’s price declines.
“The downward pressure in values that we saw through late last year seems to be coming to an end, and we’re now seeing a healthier balance between buyers and sellers,” Lawless said.
Canstar, a financial comparison platform, estimated that the rate cut would increase the borrowing capacity of a couple earning average full-time wages by $23,100, bringing their total loan potential to nearly $1.1 million.
High-End Housing Leads the Recovery
Market analysts note that Sydney and Melbourne’s luxury property segments tend to react most strongly to interest rate changes. Lawless pointed out that this segment was among the hardest hit when rates were rising and is now showing early signs of a rebound.
“The markets that are seen to be most reactive and sensitive to rate cuts are high-end house markets in Sydney and Melbourne, and we’re already starting to see the evidence of that,” he explained.
The strong performance of 92 Hewlett Street, Bronte, which attracted last-minute interest from an interstate buyer, reflects this trend. The winning bidder from Melbourne viewed the house for the first time on auction day and placed the successful bid.
Auction Dynamics Remain Mixed
Despite the headline-grabbing sales, selling agents report that buyer confidence remains uneven. Jessica Cao of Ray White Upper North Shore noted that while some properties are surpassing expectations, the number of active bidders remains relatively low.
“We’re seeing more new buyers coming into the market, but the numbers are not huge,” she said. “Some buyers are bidding confidently at auctions, but there are also still very few of them, so we haven’t seen a jump in the number of bidders since the rate cut.”
This sentiment is reflected in broader auction results. Preliminary clearance rates in Sydney and Melbourne remained above 70%, but were slightly down from the previous week. Meanwhile, Brisbane recorded the lowest clearance rate at 55%, while Adelaide led the smaller capitals at 77.9%, followed by the ACT at 71.1%.
Property Supply Levels at a Yearly High
With 2,773 properties taken to auction this week—the highest volume recorded this year—analysts are watching closely to determine whether supply and demand will continue to stabilise.
Domain’s chief of research and economics, Nicola Powell, believes that sentiment is playing a crucial role in shifting market dynamics.
“The rate cut is the spark that some buyers probably needed to feel that confidence to return into the market,” she said.
While the full effects of the rate reduction are yet to be seen, early indications suggest that buyer confidence is returning, particularly at the high end of the market.
If auction trends continue on this trajectory, Sydney’s property sector may be entering a new phase of stabilisation and potential growth.
