Today, I had coffee with some property owners in the eastern suburbs. The topic of conversation was the real estate market, the rising cost of living, and the impact of interest rates.
This morning over coffee with a few long-time property owners in Sydney’s Eastern Suburbs, the conversation naturally turned to real estate—rising living costs, interest rates, and what it all means for the property market.
As many know, the Reserve Bank of Australia continues to use monetary policy—namely interest rate adjustments—to curb inflation, aiming to keep it within the 2–3% target band. However, despite notable structural shifts in our economy over the last three decades—including globalisation, digital disruption, and demographic change—there’s been little reform in how these policies are reviewed or applied. The most recent review of the RBA in 2023 did raise questions about transparency and policy-setting methods, but much remains unchanged in practice.
In my recent article, I explored how economic shocks—from pandemics to political shifts—impact Australian real estate. The conclusion? Despite volatility, bricks and mortar remain one of the most resilient forms of wealth preservation in this country.
According to the Australian Bureau of Statistics, the total value of residential dwellings hit a record $10.1 trillion in Q1 2025. To put that in perspective, that’s more than four times the size of Australia’s GDP.
Last weekend’s auction results reflect continued confidence in prestige and tightly held markets. Sydney recorded a clearance rate of 81%, with total sales exceeding $295 million and a median sale price of $1.61 million.
Here are some standout results:
10 Fairweather Street, Bellevue Hill – A five-bedroom home sold under the hammer for $15.2 million, up from its 2011 price by over 500%.
Paddington Apartment – A new suburb record was set, with a luxury apartment selling for over $20 million, outpacing the area’s historic terrace homes and warehouse conversions.
26 Olphert Avenue, Vaucluse – Sold off-market for $18 million, yielding a $4 million gain in just two years.
Potts Point One-Bedroom – A designer-renovated apartment sold for $1.73 million, up from $1.3 million in 2022, showcasing the strength of inner-city demand.
Point Piper – Even the smallest homes in this tightly held enclave are commanding well above $23 million.
Meanwhile, the median house price in Vaucluse has held steady at $8.375 million, underscoring the stability of Sydney’s ultra-premium markets, even as others fluctuate.
That said, economists are signalling potential economic headwinds. With cost of living pressures and elevated interest rates, whispers of a mild recession persist. The property market is responding accordingly—polarised between high-end, cash-ready buyers driving strong sales at the top, and a more cautious, credit-restricted middle market adjusting to tighter conditions.
In uncertain times, experience, strategy, and timing are everything. Whether you’re looking to buy, sell, or simply understand your position in the current cycle—I’m always available to talk.
