A leading valuer says Sydney’s property market is showing signs of slowing, warning that buyer sentiment has weakened sharply in the past week.
The Reserve Bank hiked rates for the second straight month on Tuesday, lifting the cash rate by 0.25 percentage points to 4.1 per cent – a move expected to add about $90 a month to repayments on a typical $600,000 mortgage with 25 years remaining.
Ahead of the decision, Belinda Botzolis, founding director of property valuation firm Add Valuer, said the mood has flipped from reckless confidence to deep caution in a matter of days.
‘I haven’t seen this in a while, this immediate shift in market sentiment is very concerning,’ she told the Daily Mail.
‘Sydney is a beast of a property market, it can chew you up and spit you out.’
Ms Botzolis said the change in sentiment comes off the back of ‘extreme ignorance and confidence’ last year that saw Sydney home prices rocket to a record $1.76million.
‘People were just buying and spending and borrowing without a care in the world,’ she said.
‘Now as we see bombs being dropped on Dubai, petrol prices going up, interest rates rising, I’m hearing more stories of redundancies, homeowners are reacting and mortgage brokers are telling me no one wants to borrow, everyone is looking to sell.
Add Valuer founding director Belinda Botzolis (pictured) said the mood has flipped almost overnight from wild confidence and carefree borrowing to deep caution
Auction crowds are thinning and borrowers are pulling back as higher petrol prices, rising rates and redundancy fears rattle homeowners – sparking fresh warnings the property ‘party is over’
‘The party is over and if you were just following the crowd blindly investing and buying, you’re in trouble.’
Tom Panos, one of Australia’s leading auctioneers, said clear warning signs were emerging that the property market was beginning to cool.
‘Property is slowing down in Australia. That’s why homes are being sold prior. That’s why auctions are being cancelled.
‘Over the years, I’ve learned to watch a few leading indicators. There are two main ones, but also look at price adjustments before an auction.
‘Start looking at when vendors are quietly trimming big expectations — that’s a sign from the market that things are changing.
‘And most importantly, buyer urgency. Hot markets have buyers chasing contracts early.
‘Cooling markets have buyers saying, ‘Oh, we’ll just wait and see.’ Cooling buyers don’t actually show up at auction at the last minute.
‘At inspections yesterday, I had a real estate agent tell me they had one group through across seven opens.
Australia added 54,000 homes in the December 2025 quarter, the largest single-quarter increase in residential dwelling stock in a decade
Tom Panos, one of Australia’s leading auctioneers, said clear warning signs were emerging that the property market was beginning to cool
‘But here’s where it gets interesting. There are also some subtle signals most people don’t notice, mortgage brokers saying pre-approvals are slowing, and building and pest inspections dropping off – these are all indicators.
‘And I can say to you right now, this market is changing. If you’re a vendor who is within five per cent of the number that makes you happy, this is not the marketplace to play hardball.’
New research released on Tuesday shows Australia’s surge in new housing supply is expected to cause the first national quarterly drop in property prices in more than three years. The modelling suggests the market could reach its peak in 2027.
The modelling by Primara Research found Australia added 54,000 homes in the December 2025 quarter, the largest single-quarter increase in residential dwelling stock since 2016.
Director Peter Drennan said the impact of the supply surge is forecast to peak in the September 2027 quarter, compounded by at least two further predicted cash rate rises.
‘The national headline will say prices are falling, but that obscures what is really a tale of two housing markets,’ he said.
‘NSW and Victoria are absorbing a double hit, reduced borrowing capacity and a supply surge that their markets are highly sensitive to.
‘Meanwhile, the same rate environment is actively redirecting capital into Queensland, Western Australia and South Australia.’
Strategic Property Group managing director Trent Fleskens said while Sydney is hitting an absolute affordability ceiling, states like WA and Queensland are operating on a completely different set of fundamentals.
‘We’re seeing a two-speed economy: Sydney and Melbourne are flatlining due to high debt sensitivity, while Perth and Brisbane are still seeing double-digit growth driven by interstate migration and chronic undersupply,’ he said.
‘So, do other states follow? Eventually, yes, sentiment is contagious. But for now, the equity migration out of Sydney is actually fuelling the other states rather than pulling them down.’
