A Redfern first home buyer renting locally has purchased a one-bedroom unit on Cleveland Street for $725,000 at auction — a rare bright spot in a Sydney property market that recorded its weakest auction clearance rate in more than five years.
The unit at 35/165-173 Cleveland Street drew three registered bidders on Saturday, all of them first home buyers. Bidding opened at $675,000 — the adjusted guide price after it had been wound back from an initial $700,000 at the start of the campaign — and the three buyers traded bids in small $3,000 and $5,000 increments before the property sold for $725,000, clearing its reserve by $55,000. Records show the property last changed hands in 2018 for $665,000.
Selling agent Brigitte Blackman of BresicWhitney East said the price point, central location and included parking made it attractive, and that the vendor had approached the market with realistic expectations. She also noted that, prior to the federal government’s recently announced tax changes, investor interest would normally have been expected for a property of this type.
The result is notable given the broader mood across Sydney’s auction market. Domain data shows a 47 per cent preliminary clearance rate for the week ending 21 June — compared with 70 per cent at the same time last year. Of 865 scheduled auctions across Sydney, Domain Group recorded results from 520, while 213 were withdrawn — withdrawals are counted as unsold when calculating the clearance rate. Domain data indicates this is the lowest the city’s auction clearance rate has dipped in five years, with the second-lowest result in that period recorded on 4 May 2026 at 48 per cent.
The preliminary clearance rate represents the second consecutive week it has remained below 50 per cent, and given the gap between preliminary and final results has averaged five percentage points over the preceding four weeks, the final figure is expected to settle in the low 40 per cent range.
AMP chief economist Dr Shane Oliver pointed to a confluence of factors weighing on the market: interest rate rises, reduced confidence and the federal budget’s proposed tax changes for property investors. He warned that even investors who believe the changes will not affect them personally may be less inclined to move quickly, which has a ripple effect across the broader market. He also flagged a potential negative wealth effect — given that housing accounts for roughly 70 per cent of household wealth in Australia, falling prices can cause households to feel less financially secure and reduce their spending as a result. Investor lending currently runs at around 40 per cent of the market, and Oliver cautioned that first home buyer demand alone is unlikely to fill that gap, leaving undersupply of housing as an ongoing structural problem.
The budget changes that have rattled investor confidence are significant. On 12 May 2026, as part of the 2026–27 Federal Budget, the government announced it would reform negative gearing and capital gains tax arrangements, and these measures are now law. Negative gearing for established residential properties will be abolished from 1 July 2027 for properties purchased after 7:30pm on 12 May 2026, meaning investors will no longer be able to offset rental losses against salary or other personal income — losses can only be offset against residential rental income or future capital gains from rental properties. The government has also moved to replace the 50 per cent capital gains tax discount with a discount based on inflation, and to introduce a minimum 30 per cent tax on capital gains from 1 July 2027. Existing property owners, including those already under contract before the budget announcement, are grandfathered and can continue to access negative gearing under the current rules.
Nerida Conisbee from Ray White noted that, despite the downturn, the current conditions present opportunities for buyers who now have more choice than they have had in some time, and cautioned that markets have historically recovered after such periods.
For the Redfern buyer — someone already living in the neighbourhood and now putting down roots — Saturday’s result was a personal win in a market where the broader signals are harder to read.
Published 22-June-2026
