It’s been a strong start for Sydney property in 2025, with BresicWhitney transacting on over $70 million in January across the major lifestyle and harbourside suburbs. It’s a figure that illustrates a genuine intention from buyers and sellers to move ahead with their real estate plans, in the face of continued and widespread economic challenges, said the leading property group.

“The robust start to the Sydney property market that we expected has materialised,” said the group’s CEO Thomas McGlynn. Citing open home numbers and enquiry across family homes, townhouses, terraces, apartments and more, he added: “There’s healthy demand across our key markets and property types. This reflects the advanced understanding that both buyers and sellers have of the opportunities available at present.”

Property sold in January by BresicWhitney include 4/14 Hasting Street, Marrickville at auction, 4/339 Catherine Street, Lilyfield prior to auction and 3/50 Shirley Road, Wollstonecraft off-market. Listing almost 90 homes in total over the month, outpacing property listed in January 2024, it expects to see continued positive results over the coming weeks. “Sales over February will in many ways be an indicator of what Sydney buyers and sellers can expect over the coming months. We know that the buyer demand is there, so for many it’ll more likely be a question of timing.

“A segment of the market will be looking for a reduction in interest rates before making a move – something that has not been in reach until now. With that looking more likely to occur [at the meeting on 18 February 2025], it’s not long until there is more clarity of the road ahead,” he said. CoreLogic estimates that borrowing power has been cut by 25% since rates started rising in May 2022.

While BresicWhitney expects a reduction in the cash rate to spur demand and activity, the group warned that sustained change in the Sydney property market wouldn’t occur until there was a clear downtrend and commitment from the Reserve Bank of Australia (RBA) to alleviating the current pressures. “Just as the market took some months to become symptomatic of the tightening cycle, it will take time to reflect this highly anticipated downtrend on a longer-term level,” said Mr. McGlynn.

Auctions and affordability.
The constraints with affordability have been – and remain – a key driver of the weakened Sydney auction clearance rate. Reported to be between 50-60% over the back half of 2024, CoreLogic has reported similar conditions to start 2025. Data for the end of January unveiled a 54% weekly clearance rate – markedly down from the 64% this time last year. While BresicWhitney’s average auction clearance rate remained above 70% for most of 2024, the group recorded weekly swings that saw it fluctuate between 60-80%.

In turn, the weakening auction clearance rate across Sydney continues to generate an increase in total property available on the market. In combination with a fellow increase in new listings on the market, it’s led to a choice-rich buying environment and a resolute need for sellers seeking swift results to meet the market on price. In January, it was reported that key areas of Sydney such as the Eastern Suburbs had recorded a 30% annual uplift in property available for sale.

Mr. McGlynn said that the Sydney auction clearance rate, the amount of property available, and the length of time some homes are taking to sell was a potent reflection of the current macroeconomic conditions. “With many areas of metropolitan Sydney experiencing longer selling timeframes – including days or in some cases weeks after an auction – it’s by and large reflective of the challenges that buyers and sellers have been navigating for many months.”

Yet the nuanced nature of the Sydney market means that that this isn’t applicable across all suburbs or types of properties. “Majority of the homes we sell do so at auction and if not, sell prior (during the campaign) or off-market – the latter of which our days on market can be as little as a few days to one week. Many of our areas are still by and large what you’d classify as ‘tightly held’ despite more property on the market and a steady flow of new listings.

“This is very much in line with what we’d see in a more heated market. We believe this demonstrates not only how resilient the lifestyle markets are, but that many Sydneysiders are watching and waiting for the right opportunity and will make a move when they’re presented with that,” said Mr. McGlynn.

Prices pare back, but for how long?
A modest downturn in January’s recorded home prices has further enhanced present buying opportunities. Sydney recorded a -0.2% reduction in prices, as all six capital cities recorded declines, according to Proptrack. Annual growth for Sydney remained at 2.3%. A slightly more robust pullback in January’s prices was recorded by CoreLogic with -0.4%.

The downturn, however, is widely expected to be modest – and short-lived. KPMG is expecting Sydney prices to increase by 3.3% over 2025 and 7.8% in 2026 alone – more than double the forecast for this year.

In fact, the current softening conditions could be so short-lived that they span just the coming three months, according to AMP. The group’s Chief Economist Dr Shane Oliver told The Australian Financial Review recently that: “The downturn in Sydney’s home values could be over by the next federal election. Demand has held up in Sydney despite lack of affordability and cost of living pressures, so it might even surprise on the upside given the underlying shortage of housing supply.”

Mr. McGlynn agreed this was a possibility. “We see this as a temporary downturn. The value proposition of Sydney property is one that rarely wanes to any great extent. That’s something that sellers can and should take continued confidence in.”

Apartments in focus.

Apartments are expected to outperform homes over 2025, with KPMG forecasting 5% growth in apartments and a further 6.1% by December 2026. “Units represent many options for Sydney buyers and of course there are many who are concentrating their search exclusively on apartments due to the affordability constraints,” said Mr. McGlynn.

Much of the price growth that this sector is set to experience will mirror the trajectory that house prices underwent during the pandemic, believes BresicWhitney. “During and following the COVID-19 pandemic, there were cultural and economic shifts that triggered this rapid increase in house prices. What we’re preparing for now is the current wave of key issues – lack of affordability, lack of supply, and the cash rate cycle – to drive upwards pressure on apartment values.”

CoreLogic data highlighted the current price discrepancy between houses and apartments: the former being 71 per cent more expensive to buy than the latter at the end 2024. A figure that was also just shy of the record high of almost 73% in August 2024.

Rental climate shifts, as does policy.

The close relationship between property, politics, and the economy has also begun to play out in the rental market. A defining theme of 2025 – as shared in BresicWhitney’s recent Quarterly report – the incoming changes associated with the NSW Government’s recently passed ‘Bill to amend the Tenancy Act’ are just one example.

As the industry prepares for upcoming legislative changes – including capping rental increases to once every 12 months, ending no-grounds terminations, and requiring landlords to provide a valid reason for refusing a tenant’s pet – Head of Property Management, Chantelle Collin noted: “These reforms signal the NSW Government’s commitment to fostering a more balanced rental market. Strong security for both owners and tenants is a key part of that. However, without addressing the chronic undersupply through increased housing and greater incentives for private investors, we’re unlikely to see any major shifts in Sydney’s rental landscape.”

The passing of the Bill coincides with a stagnation in rental growth over January, which marked the sixth consecutive month of such conditions, according to Proptrack. “While a slight reprieve was recorded in January, we need to remember the broader rental market climate,” Ms. Collin added, citing a price increase of 11% for Sydney houses and 13% for apartments over the last three years. “On an annual basis, average rents have increased almost five per cent year on year. The median price for Sydney renters is now almost $800 per week for an apartment, and in many of our key markets, up to $1,200 per week for larger homes. It will take significant shifts to the economy and housing supply to deliver any widespread and sustained cooling of the rental sector,” said Ms. Collin. BresicWhitney leased 136 homes in January, an increase from the 109 in January 2024.

In further emphasising the importance of private investment, she reflected on the enduring value proposition for investors. “The fundamentals of property investment in Sydney continue to show how in demand well-located, well-maintained and quality homes are. We encourage current or potential future investors to remain mindful of this and the contribution they’re making to delivering supply for tenants.”