The Australian real estate market has experienced notable shifts in May 2025, influenced by both economic policy and legislative changes. The Reserve Bank of Australia’s (RBA) recent rate cut and the enforcement of new rental reforms in New South Wales (NSW) are pivotal developments shaping current market dynamics.
Economic Update
On May 20, 2025, the Reserve Bank of Australia reduced the cash rate to 3.85%. This decision is expected to lower mortgage rates, potentially reducing repayments on a $750,000 loan by approximately $81 per month. The decrease is anticipated to stimulate interest among prospective buyers, including first-home purchasers, as borrowing costs become more manageable.
The Marshall Group Specific Insights
At The Marshall Group, we’ve observed strong attendance at our open homes throughout May. Currently, we have 49 properties listed on our website and have successfully sold 76 properties so far in 2025. Our property management team continues to expand, now managing over 594 rental properties across Sydney. Whether you’re considering selling, buying, leasing, renting, or investing, our experienced teams are available to provide tailored insights and guidance on current market trends.
Enforcement of New Rental Reforms in New South Wales (NSW)
Further significant changes to NSW rental laws have been enforced as of May 19, 2025, following the passage of the Residential Tenancies Amendment Act 2024 by the NSW Parliament in October last year. These reforms aim to enhance tenant protections and create a more equitable rental market.
Key changes include: (1) ways of paying rent, (2) limit on rent increases, (3) pets, and (4) termination notices.
Ways of Paying Rent
It is now required under section 35 of the Act that a landlord provides a tenant with a way to pay rent that does not incur additional fees, such as an electronic bank transfer or Centrepay. Additionally, landlords cannot pass on any costs incurred for the prescribed payment method of the rent to the tenant.
Limit on Rent Increases
Under section 41 of the Act, rent payable under a residential tenancy agreement can only be increased once every 12 months. If a tenant wishes to dispute a rent increase, they can apply to the NSW Civil and Administrative Tribunal (NCAT) within 30 days of receiving the rent increase notice and will have to prove that the increase is excessive.
Pets
In Division 8, sections 73A – 73I reforms have been made to allow tenants to keep pets with the landlord’s consent. Landlord’s consent can be established through the tenant submitting an application for consent and the landlord providing a response within 21 days after the application is given to the landlord. The conditions for reasonable consent are outlined in section 73E and a landlord can only refuse to give consent if one or more of the conditions are met under section 73F of the Act. Some examples where a landlord may refuse to provide consent include: the number of animals is considered unreasonable for the premises, the premises is unsuitable for an animal as it does not have appropriate fencing or insufficient space, the keeping of the animal may result in repair costs exceeding the amount of the rental bond.
Termination Notice
As of the 19th of May, landlords are not able to terminate a periodic or fixed term tenancy agreement without reasonable grounds. If a landlord wishes to end a tenant’s lease, they must provide the tenant with a termination notice along with the genuine reasonable ground for termination and supporting documentation. What is categorised as ‘reasonable grounds’ is outlined in Subdivision 1 sections 84 – 87N of the Act. Some examples of reasonable grounds for termination include: the premises will be offered for sale, significant renovations or repairs are being made, or the premises is being demolished. In addition, reasonable grounds for termination may be established if the tenant no longer meets the eligibility requirements of the scheme in which they entered the tenancy agreement under such as affordable housing, student accommodation, transitional housing.
Sydney Property Market Insights
May has marked a resurgence in Sydney’s auction market, following the school and public holiday periods. For the week ending May 18, 2025, Cotality (formerly CoreLogic) reported 555 properties auctioned in the Sydney region, achieving a clearance rate of 62.6%. Notably, the North Sydney to Hornsby sub-region saw 62 properties go to auction with a clearance rate of 69.4%, reflecting strong demand. Looking ahead, Cotality forecasts a 44.7% increase in weekly auction numbers, with 803 auctions scheduled for the upcoming week, indicating growing confidence among buyers and sellers.