Market Update Mid 2025: The Shift Is Already Happening
We have now had three rate cuts this year. The cash rate sits at 3.6 percent, the lowest level since April 2023.
For someone with a $1 million mortgage, that is roughly $150 per week improvement in cash flow compared to last year.
At the same time, Sydney’s auction clearance rate recently hit 74 percent and is rising quickly.
According to Shane Oliver, clearance rates and price movements track closely. Historically, this level is associated with capital growth of 20 percent or more.
We have not seen that growth yet. However, if historical patterns hold, it may not be far away.
Sentiment Is Shifting Fast
The media rarely captures nuance. One moment the narrative is a crash, the next it is a boom.
Recently, Wollongong and South Coast coverage has started to shift as well.
In reality, sentiment has already changed. The headlines are simply catching up.
Spring usually brings activity. However, this time feels different.
Early Signals Buyers Are Returning
So how do we measure buyer activity before purchases happen?
There are three key indicators:
- Online search interest (OSI)
- Pre-approvals
- Inspection volumes
OSI reflects early intent. It is essentially window shopping.
Over the past month, OSI has increased across nearly all tracked suburbs.
However, search interest alone is not enough. The real signal is pre-approvals.
Getting pre-approved requires effort and commitment. It is where intent becomes action.
Thousands of buyers are now re-entering the market after sitting out for two years.
For example, CBA has reported a 25 percent increase in conditional pre-approvals. Brokers across the board are seeing the same trend.
Supply vs Demand Is Rebalancing
So what does all of this mean?
More buyers are entering the market. At the same time, supply remains tight.
Property always comes down to supply and demand.
When demand rises and supply does not, prices follow.
That is exactly what we are starting to see.
The Social Proof Effect
Once a suburb records a few strong sales, buyer behaviour changes quickly.
Confidence builds. Offers become stronger. Competition increases.
In many cases, the same 10 to 20 properties are now attracting significantly more buyers.
This shift can feel sudden. However, it is driven by predictable human behaviour.
Waiting in a rising market can be costly. Delaying a decision at the wrong time can mean missing out on significant gains.
What We Are Seeing on the Ground
If you want real evidence, look at inspection numbers.
Over the past month, multiple agents have reported a sharp increase in attendance.
Earlier this year, open homes might have had one to three groups.
Now, many are seeing 10 to 20 groups through the same properties.
That is not a small increase. It is a major shift in demand.
As a result, multi-offer situations are becoming more common. Sales above asking price are also increasing.
Understanding the Property Cycle
While this may surprise some people, it follows a familiar pattern.
This is now the third property cycle I have experienced over the past 22 years.
Each cycle is different, but the emotional stages are consistent.
- Nervous about falling prices
- Depressed about long-term outlook
- Confused about what is happening
- Concerned about missing out
- Panic buying
This is not about judging behaviour. It is about recognising patterns.
Focus on Signals, Not Noise
If you focus on the underlying drivers instead of media headlines, the picture becomes clearer.
You can see the shift early. More importantly, you can plan accordingly.
If you are considering a purchase, take the time to research. However, once you have clarity, act decisively.
Stay Smart, Not Reactive
Do not panic buy.
Negotiation and due diligence still matter. Always assess the property properly and ask the right questions.
However, doing nothing also carries risk.
In a rising market, waiting for further price drops can lead to regret.
The key is balance. Stay rational, stay informed, and act when the fundamentals align.
