Market Update - August #1
The Hike Is Off the Table. The Auction Market Hasn't Noticed
The ABS released June inflation data on 29 July, and it broke the market’s way. Headline CPI eased to 3.8% in the year to June, down from 4.0% in May, while the RBA’s preferred trimmed mean measure held steady at 3.6%. Between them, that was enough to take a rate hike off the table for the Reserve Bank’s 10-11 August meeting – without being soft enough to pull a cut forward. Meanwhile, Sydney’s auction market has not caught up to that news. The clearance rate fell to 42.4% for the week ending 19 July, a four-week low, and the national rate has now spent close to nine consecutive weeks below 50%. For buyers on the Lower North Shore, that gap – rate certainty arriving while the auction market is still firmly in buyers’ favour – is the clearest set-up this cycle has produced.
WHAT THE JUNE CPI PRINT ACTUALLY SHOWED
The headline number told a genuinely dovish story: inflation easing from 4.0% to 3.8% annually, with the monthly indicator falling 0.1% in June as automotive fuel prices dropped sharply. But the RBA does not set policy off the headline number alone. The trimmed mean – which strips out the largest price swings to show the underlying trend – held at 3.6%, unchanged from May, after climbing from 3.3% in March. Housing costs remained the standout contributor to annual inflation, up 6.8% on the back of electricity prices, rents and new-dwelling construction costs.
Westpac’s own economists, who had been the most hawkish voice through the hiking cycle, described the result as better than feared – their own quarterly trimmed mean forecast of 0.9% came in at 0.8%, and the annual pace of 3.6% came in below their published 3.7% call. That matters, because Westpac was the one major bank still pricing a real chance of further hikes toward a 4.85% peak. A print that undershoots even their forecast makes that scenario materially harder to sustain into the 10-11 August meeting.
“This is the first inflation read all year that genuinely helped buyers rather than complicating things further. It doesn’t mean rates are about to fall – the trimmed mean holding at 3.6% keeps a cut off the table for now too. But it takes the worst-case scenario off the table, and on the Lower North Shore, removing uncertainty is often worth more to a buyer’s confidence than the actual rate itself.”
GERARD MAZAR
Director, Mazar Martin Buyers Advisory
THE AUCTION MARKET HASN’T READ THE MEMO YET
Here is the part of the picture that matters most for anyone searching on the Lower North Shore right now: the auction market has not started pricing in this improved rate outlook. Sydney’s clearance rate fell 8.3 percentage points to 42.4% for the week ending 19 July – its lowest result in four weeks – even as auction volumes held roughly steady. Nationally, the combined capital clearance rate has now sat below 50% for close to nine consecutive weeks, a run of weakness analysts have described as among the softest in decades. The four-week and eight-week rolling averages have settled close together in the mid-46% range, suggesting the market has found a floor rather than continuing to deteriorate – but that floor is still firmly a buyer’s market by any historical standard.
That combination – a rates outlook that just improved materially, sitting alongside an auction market that remains genuinely soft – does not last indefinitely. Vendor and buyer sentiment both tend to move with a lag behind the underlying data. The buyers who move before that sentiment catches up are negotiating against a market that is still pricing in more uncertainty than the data now supports.
“Every improvement in the rate outlook eventually shows up in buyer confidence, and buyer confidence eventually shows up in clearance rates. That hasn’t happened yet – Sydney just posted a four-week low. The buyers we’re working with on the Lower North Shore right now are transacting in the gap between the good news and the market noticing it, and that gap is exactly where the best outcomes get made.”
JEREMY MARTIN
Director, Mazar Martin Buyers Advisory – Buyers Agents, Lower North Shore
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WHAT THIS MEANS HEADING INTO SPRING
The 10-11 August RBA meeting is now widely expected to deliver a hold at 4.35%, consistent with the position CBA, NAB and ANZ have held since June. That removes one of the two major sources of uncertainty that has weighed on the market through the first half of 2026. The other – the auction market’s slow recovery – remains squarely in buyers’ favour heading into what is typically the build-up to spring. Listing volumes will begin lifting through August and September, but the buyers who secure Lower North Shore properties before that volume – and the competition that comes with it – returns in October and November are negotiating in a market that has not yet reset around the improved rate picture.
On the ground across Mosman, Cremorne, Neutral Bay, Cammeray and Lane Cove, this shows up as vendors who are still pricing to reflect winter’s softer clearance rates and a buyer pool that has not yet absorbed the fact that the worst-case rate scenario has just become considerably less likely. That mismatch between vendor pricing and the improved underlying conditions is precisely the window Mazar Martin’s clients are moving through right now.
Gerard Mazar
DIRECTOR · MAZAR MARTIN BUYERS ADVISORY
Specialist buyers agent on Sydney’s Lower North Shore with deep expertise across Mosman, Neutral Bay, Cremorne, and the wider harbourside market including suburbs surrounding Willoughby to Chatswood.
Jeremy Martin
DIRECTOR · MAZAR MARTIN BUYERS ADVISORY
Specialist buyers agent on Sydney’s Lower North Shore with deep expertise across Mosman to Cremorne, but also Lane Cove, Cammeray, Crows Nest. His work is built on daily market intelligence and long-standing agent relationships.
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