Sydney’s residential market is entering a more hesitant phase, with buyers in key price brackets now searching for reasons to walk away rather than compete hard at auction.
Buyer’s agent George Cherchian (pictured), principal of James Chase Buyer’s Advocacy, said the change in tone was swift after tensions in Iran escalated.
“Within seven to 10 days of the conflict in Iran escalating, I noticed a clear change in language and appetite from buyers,” Cherchian said. “Across more than 90% of my conversations, people are now looking for reasons to pause rather than proceed.”
Auction data back this up. Research house Cotality has Sydney’s preliminary auction clearance rate under 60% for three weeks in a row, with the latest reading at 54.4% – well below the 60–70% range usually associated with a strong or balanced market.
Cherchian attributes the hesitation to a cocktail of pressure points: two consecutive RBA cash rate hikes to 4.1%, talk of changes to the capital gains tax discount, higher fuel costs, and the psychological impact of a sudden conflict.
While borrowers have become used to public debate ahead of rate moves, he said the Middle East shock has been different.
“War doesn’t work that way. There’s no room to condition yourself for it. It comes as a shock,” Cherchian said.
For brokers, the greatest softening is in the $2 million to $5 million bracket, where higher‑income households and upsizers are more sensitive to large loan sizes and rate expectations.
Below $2 million, demand from first‑home buyers and owner‑occupiers remains relatively firm, while prestige stock above $5 million is still constrained, leaving well‑capitalised property investors and high‑net‑worth buyers less affected by mortgage rates.
The cooler mood is also creating selective opportunities. Cherchian cites a Baulkham Hills purchase where the guide price of $2.1 million ultimately became a $1.9 million deal as competition thinned out.
Cherchian expects sentiment to improve once there is more clarity on the Middle East and capital gains tax policy, but for now, caution is the default. Buyers, and the brokers who advise them, are watching for stability before making their next move.
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
