Australia’s property market has launched into spring with its strongest performance in two years. Auction clearance rates hit 72.3% in Sydney and 69.7% in Melbourne last month — both well above the 60% benchmark that signals a balanced market. These figures suggest upward price pressure, particularly in Sydney’s eastern suburbs and Melbourne’s Mornington Peninsula.
According to Rodney McLoughlin, the rapid response from buyers to recent interest rate cuts — three so far this year — has outpaced seller activity. This has created an imbalance, with limited listings driving fierce competition, especially in more affordable suburbs.
Government Incentives Fuel First-Home Buyer Activity
The federal government’s expansion of the First Home Guarantee Scheme, set to roll out in October, is adding further fuel to the fire. First-home buyers will be able to purchase with a 5% deposit and avoid lender’s mortgage insurance, thanks to raised price caps and relaxed income restrictions.
Rodney McLoughlin notes that these changes are expected to intensify demand in lower-priced segments, where investors are also returning to the market due to improved rental yields and cheaper borrowing costs.
Affordable Suburbs Under Pressure
The lower end of the market is leading in capital growth — a reversal of traditional trends. Suburbs like Werrington, St Marys, and parts of the inner west including Ashfield and Newtown, are seeing record inquiries and auction clearance rates above 85%.
Meanwhile, Sydney’s overall housing market value has ballooned to $11.6 trillion, driven by price increases in both capital and regional cities. Investors now account for a growing share of new lending, further compounding affordability issues for first-home seekers.
The Affordability Crunch Deepens
Domain data shows that saving for a deposit now takes over eight years, with mortgage repayments consuming more than half of buyers’ disposable income. Rodney McLoughlin highlights that this is pushing younger Australians further from home ownership, especially as demand-side policies inflate entry-level property prices.
Experts warn that while the First Home Guarantee Scheme will benefit early adopters, it risks intensifying price growth in affordable areas, making it harder for the next wave of buyers.
What to Expect This Spring
With more stock expected to hit the market during spring, the coming weeks will test how far buyer demand can stretch. However, sellers currently hold the advantage. Well-presented, move-in ready homes — particularly those priced within first-home buyer schemes — are expected to generate intense competition.
Real Estate Newsletter
This article is a curated summary of various news stories from the past week, offering insights and updates on the real estate market. 12 September 2025.
Rodney McLoughlin is a trusted real estate professional with deep insights into the Australian property market. For personalized advice and market expertise, reach out to Rodney today.
