Closing the chapter on February: Energy up top, caution beneath the surface

February opened the way it typically does.

Buyers returned from the holiday period with renewed focus. Open homes were well attended, enquiry levels lifted, and there was a clear intent from many to secure a property early and start the year with momentum.

Transactions followed. Several strong results, which included some record prices, gave sellers confidence that well-positioned properties are still commanding premium outcomes. At the same time, it kept buyers alert to the fact that hesitation on the right asset could come at a cost. But as the month unfolded, the broader market story proved more layered than those early signals suggested.

Activity vs Depth

While sales activity has been present, buyer depth has remained relatively thin. There is engagement, but it is measured. Buyers are active, but they are selective. And when it comes time to negotiate, the process is often deliberate rather than overly competitive. The prevailing tone is one of caution, shaped by affordability constraints, interest-rate uncertainty, and general economic sensitivity.

Auction data through the back end of February highlights this contrast between surface activity and underlying conviction. SQM research data for Sydney:

• Clearance rate: 46%
• Scheduled auctions: 1,126
• Sold at auction: 18%
• Sold prior: 28%

In other words, fewer than one in five scheduled auctions actually concluded under the hammer. A large proportion of sellers accepted pre-auction offers rather than carrying uncertainty into auction day, a strategic decision which reflects a lack of depth in the overall buyer pool and confidence in auction performance.

Reading Between the Headlines

This is where interpretation matters. Media reporting continues to spotlight the most exceptional auction results, the emotional bidding duels and above-reserve outcomes. Those stories are real, but they represent a narrow segment of the market. For a majority of campaigns, the experience is more measured:

• Buyer enquiry is narrower.
• Finance checks are tighter.
• Price ceilings are more rigidly enforced.

As a result, many campaigns are effectively decided before auction day arrives and understanding that dynamic is critical for sellers when shaping their strategy.

Pricing Alignment Is Doing the Heavy Lifting

Campaign success right now is closely tied to pricing alignment. Sellers who position their property in line with genuine buyer feedback are seeing engagement convert into offers. Those holding aspirational pricing without market support are facing longer campaigns and more challenging negotiations. We are also continuing to see the re-emergence of aggressive under-quoting strategies in some pockets with price guides set materially below comparable evidence to generate enquiry volume. It’s a tactic long debated, difficult to regulate in practice, and while it remains effective in drawing crowds, it can distort early buyer feedback and campaign transparency. For sellers, awareness of how pricing strategies are being deployed across the competitive landscape is essential.

Inflation and Rate Pressure Still Linger

Beyond property-specific dynamics, the macro environment continues to shape behaviour. January inflation printed at 3.8%, again surprising on the upside relative to forecasts. That persistence in inflation has shifted rate expectations, with financial markets increasingly factoring in the possibility of another rate increase around May. If that occurs, borrowing capacity tightens further and buyer confidence may soften accordingly. This is why many buyers remain cautious despite ongoing property engagement while the forward view on rates is still unsettled.

Where the Market Sits Today

Taking all factors into account, February leaves the market in a balanced position. There is activity, but not excess. There is demand, but not depth across all price points. There is optimism, but it is tempered by economic reality. In this type of environment:

• Strategy carries a lot of weight to generate momentum.
• Pricing discipline will influence your outcome.
• Buyer feedback needs to be interpreted early and acted on.

Sellers who stay close to the market are transacting quite well, while those relying on flaky media headlines or distorted data are finding the adjustment more difficult.

Looking Ahead

As we move into autumn, the interplay between inflation, interest rates, and buyer affordability will remain central to market direction. There will be strong results, particularly for well-presented, well-priced properties, but they will sit alongside campaigns that require recalibration and patience. It is a market that is rewarding realism and preparation and penalising over ambition and poor market calculations.

Stay tuned though as we’ll continue to report on conditions as they continue to evolve.