Auction clearance rates climbed to 72% in May, marking the strongest result since early 2022 and signalling renewed strength in Australia’s housing market.
Nerida Conisbee (pictured), chief economist at Ray White, said the surge “provides compelling evidence that the impact of Trump's economic policies on Australia are having a significant impact on Australia's housing market.”
“This sharp increase from the low-to-mid 60% range throughout most of 2024 further cements the acceleration in pricing that began in January,” Conisbee said.
While conditions are reminiscent of the 2021 boom, she noted that this cycle’s growth will likely be more restrained.
“While current conditions are somewhat similar to those that fuelled the extraordinary price growth of 2021, acceleration of growth is likely to be a lot more muted than what we saw during that time,” Conisbee said.
According to Conisbee, global developments — particularly Donald Trump’s "Liberation Day" tariffs — are shaping property dynamics in Australia.
“Trump’s ‘Liberation Day’ tariffs have dramatically altered interest rate expectations globally, with markets now pricing in multiple cuts in Australia throughout 2025,” she said.
She added that auction markets in globally sensitive regions like Sydney and Melbourne have been the most responsive.
“Auction markets in Sydney and Melbourne, traditionally more sensitive to global economic shifts, have responded most dramatically to the changing outlook,” Conisbee said.
April data showed national house prices rose 0.4% to a median of $917,433, while unit prices rose 0.5% to $685,637. Perth continued its strong run, with prices climbing 0.9% in April, bringing annual growth to 12.2%.
“This widespread acceleration is particularly noteworthy, with 13 out of 14 regions showing increased growth when comparing recent three-month periods,” Conisbee said.
It has been reported that Trump's proposed 10% tariffs on Australian exports have stoked fears of renewed trade tension, heightening market anxiety. Economists warned these policies could feed into inflation but also reinforce expectations of more rate cuts by the RBA — a scenario that fuels housing demand.
Conisbee outlined several ways Trump's policies are indirectly driving up Australian property prices.
“The ‘Trump effect’ we are seeing in property operates through several distinct channels,” she said.
The first is increased market volatility, which is pushing investors toward safer assets.
“Firstly, global economic uncertainty has triggered unprecedented volatility across financial markets, driving investors toward the relative stability of residential property,” Conisbee said.
“The VIX index – Wall Street's 'fear gauge' – has reached levels not seen since the COVID-19 pandemic, prompting a flight to tangible assets.”
The second channel is the shift in interest rate expectations.
“Secondly, this market turbulence has dramatically shifted RBA interest rate expectations,” Conisbee said. “The February 2025 cut marked a turning point, with expectations now building for another reduction this week – potentially by 0.5%.
“For a household with a $750,000 mortgage, this would translate to savings of approximately $230 per month.”
Finally, local policy outcomes are amplifying demand.
“Thirdly, even the most recent Labor victory was in part driven by distaste for Trump amongst Australian voters,” Conisbee said. “And this win is also inflationary for house prices, particularly the expansion of the five per cent deposit scheme to all first-home buyers regardless of income.
“This policy change creates additional demand pressure in a market already responding to global economic shifts.”
Despite current price strength, Conisbee warned that inflation remains a key variable to watch.
“The big unknown remains how Trump’s tariffs will impact Australia’s inflation rate,” she said.
“Supply chain disruptions and global pricing adjustments could affect our inflation outlook, though this might be offset somewhat by lower prices for products from China as they seek alternative export markets.”
Conisbee noted the resilience of Australia’s housing market during previous crises.
“History suggests Australia's housing market demonstrates surprising resilience during economic disruptions,” she said.
“During previous periods of global uncertainty, including the GFC and COVID-19 pandemic, property prices showed remarkable stability compared to other asset classes, particularly in metropolitan areas.”
While conditions support further growth, Conisbee cautioned that today’s economic backdrop is fundamentally different from the pandemic.
“Despite the parallels to 2021, it's unlikely we'll see a repeat of the extraordinary COVID boom in property prices,” she said.
“The cash rate is highly unlikely to drop to the extreme lows we saw during the pandemic when emergency settings took rates to a record 0.1%.”
Conisbee also pointed to weaker household savings.
“The COVID period was characterised by record household savings rates as lockdowns prevented normal spending patterns – much of this excess capital flowed directly into property,” she said.
“Today’s environment is markedly different, with persistent cost of living challenges constraining household savings and limiting the pool of funds available to buy property.
“While the market is certainly strengthening and conditions are favourable for continued price growth, these fundamental differences in monetary policy settings and household financial positions suggest a more moderate trajectory than the unprecedented boom witnessed during the pandemic.”
