Raised buyer sentiment boosts Sydney’s buyer enquiries
Following the cash rate cut and increased listings, Sydney buyer inquiries surged to the highest level in three years.
Recent Domain data showed that buyer enquiries for homes have soared in Sydney, with the 1.6 per cent increase over February marking the city’s highest monthly volume since March 2022.
Domain’s chief of research and economics, Dr Nicola Powell, said the surge in activity follows the recent cash rate cut, which helped to lift the Westpac-Melbourne Institute Consumer Sentiment Index three year high in March.
Powell said that improvements to buyer sentiment have also increased the time required to list a property.
“When you think about that cash rate reduction, it’s going to come out in the statistics through foot traffic in open homes, buyers exploring what’s on the market, and where the price points are at,” Powell said.
She further noted that sellers are also taking longer to list properties in accordance with these new market conditions.
“Sellers are going to take a little bit and are actually more likely to react to stronger price growth, particularly in markets that have been a bit more subdued,” she said.
Domain also observed that the total housing supply in Sydney reached a four-month high in February 2025, marking the 13th consecutive month of annual growth for the city’s total supply.
Powell noted that Sydney’s steadily rising total housing supply has slowed the pace of the city’s price growth compared to the second half of last year.
As a result of positive buyer sentiment and high property supply, Powell said that prospective buyers in Sydney have a wealth of housing options.
“Choice is there for buyers and that’s because we have seen overall that slowdown in demand and slowdown in sales,” Powell said.
The chief of research and economics stated that this slowdown in conditions within Sydney has taken away the element of urgency and created “better buying conditions” for prospective home owners to make a transaction.
Conversely, she noted that sellers in Sydney must be more mindful of a property’s asking price because homes "shift quickly if the price is right”.
“That change in price point means that sellers need to be agile to meet the market in order to achieve a timely sale,” Powell said.
“And we know that the longer a home spends on the market, the deeper the discounts end up becoming,” she added.
In the coming months, Powell said that agents nationwide will need to account for the “compounding effect” of the upcoming spate of public holidays in April.
Powell noted that the short period between Easter and ANZAC Day in April will result in “two weeks of back-to-back public holidays”, which has already impacted listing volumes and transactional activity in March.
“We know that a lot of people will be taking that period of time off. It’s falling around school holidays,” she explained.
“The compounding impact of that is going to shift selling decisions which is one of the reasons we’ve seen a high level of new listings coming on in Sydney in the month of February.”
Powell said that the capacity for the currently increasing buyer sentiment to translate into transactional volumes will “really be tested” in the upcoming spring selling season.
“Spring will be that real test because we’ll obviously see much higher levels of listing volumes, and the question then becomes whether this is going to be matched by more buyers,” she said.
Powell had also forecast that further rate cuts in May and August could strengthen the foundation for momentum in the housing market in spring.
“One rate cut isn’t a game changer but when you start to see a couple more rate cuts come through, it’s obviously going to boost that sentiment,” she concluded.