TL;DR
Sydney’s property market has rebounded strongly in 2025.
Median house prices have reached $1.53 million, about 2.2% higher than a year ago.
Lower interest rates and a shortage of new housing are the main reasons behind the price growth.
Affordability is still a sticking point for many people.
Most analysts think prices will keep rising through 2025 and into 2026, but not at the runaway pace of past booms.
Want to find the top property experts in Sydney? We’ve done the hard work and shortlisted them for you. Check them out below:
Introduction to Sydney House Price Trends
Sydney’s property market has always been a headline grabber, and 2025 is no different. After dipping during the interest rate hikes of 2022–23, prices are now pushing back towards record highs. The median house price sits at around $1.53 million, which is higher than last year and only just shy of the city’s previous peak.
The main reason? Supply simply isn’t keeping up. Sydney’s population is still growing, but approvals for new homes are at decade lows. That mismatch between demand and available housing is one of the biggest forces behind the city’s price resilience.
Interest rates also have a huge impact here. When the RBA started cutting in early 2025, borrowing power improved and confidence returned. That uptick has helped push prices higher again, even though affordability remains tough for first-home buyers.
For buyers and investors, the takeaway is clear: Sydney isn’t a cheap market, and it probably never will be. But understanding how supply shortages and rate cuts interact gives you a better sense of why prices behave the way they do – and how to spot opportunities when they come up.
Current Sydney House Price Snapshot (August 2025)
Right now, Sydney still holds the crown as the most expensive housing market in Australia. As of August 2025, the median house price is sitting at $1.53 million, with units averaging around $868,000. Put the two together and the combined dwelling median comes in just over $1.22 million.
House Prices by Region
That overall figure only tells part of the story. Like with any large city, prices vary a lot depending on location. In the Eastern Suburbs or on the North Shore, you’re generally looking at $2 million-plus for a house. In the middle-ring suburbs, the range is more like $1.2 to $1.8 million. And if you head further west or south, you’ll find places closer to the $800,000 to $1.2 million mark.
Over the past year, some of the fastest growth has actually been out west. St Marys, Fairfield and Liverpool have each posted gains of more than 6–7%, boosted by infrastructure investment and lower prices compared to the inner city.
Monthly Price Movements
On a monthly view, Sydney dwelling values rose 0.6% in July 2025, bringing quarterly growth to 1.8% and annual growth to around 1.6–2.2% depending on property type. It’s a big turnaround from the falls of 2022–23, and importantly, this growth has been consistent rather than a one-off spike.
Historical Price Trends (2020-2025)
In just five years Sydney has had a pandemic boom, a sharp correction, and now another round of steady growth. Few periods have been this up-and-down.
COVID-19 Impact and Recovery
Sydney went through one of its wildest property cycles during the pandemic. In 2021, house prices surged by 25.3% in just 12 months, fuelled by ultra-low interest rates and government stimulus. Of course, that sort of rise was never going to last. By mid-2022, as rates began to climb, the market corrected just as quickly.
However, the bounce-back was almost as striking. By 2023, values had clawed back much of the lost ground, and by late 2024 prices were again hovering close to previous peaks. Growth slowed at the end of that year, but momentum has returned through 2025.
The Role of Interest Rates
If there’s one factor that explains Sydney’s ups and downs, it’s the interest rate cycle. Higher borrowing costs in 2022–23 were the main reason values dropped so quickly, especially in a city where household budgets are already stretched thin. Now that the RBA has started cutting again, buyer budgets are lifting.
At the start of 2025 the cash rate was sitting at 4.35%. After three cuts, it’s now at 3.60%. That shift has given buyers more room in their budgets and boosted activity at auctions. Each cut has added a little more heat to the market, even though rates are still well above the near-zero settings we saw during the pandemic.
Seasonal Price Variations
Across a 12-month period, Sydney usually follows a familiar seasonal pattern: spring is busy, winter is quieter, and buyers often get a better deal in the cooler months. So far, though, this year has been different. Demand is so strong, and stock so limited, that even through winter competition has stayed fierce.
Regional Performance Breakdown
Sydney isn’t one single market. It’s dozens of smaller ones moving at different speeds. Some suburbs are racing ahead, while others are treading water.
Inner Sydney Premium Markets
At the upper end, demand remains strong. Suburbs like Randwick, Coogee and Lane Cove continue to attract a lot of interest, even with their higher price tags. Homes in these areas don’t stay on the market for long, with families upgrading and interstate buyers driving competition.
Middle Ring Suburban Growth
Investor activity has been returning to the middle ring, especially in the Inner West and St George regions. Marrickville, Dulwich Hill, Hurstville and Kogarah all offer a good balance of accessibility and growth potential. That said, not every part of the middle ring is performing equally. Suburbs around Parramatta and Homebush where there’s an oversupply of high rises have lagged behind, reminding buyers that quality and uniqueness are still sought after.
Outer Sydney Value Opportunities
Further out, affordability is the major drawcard. Suburbs like Campbelltown, Penrith and St Marys remain among the more accessible entry points in Greater Sydney. Prices are lower, and with the Western Sydney Airport and other infrastructure projects on the way, there’s a strong long-term case for growth.
Fastest Growing vs. Declining Suburbs
Western Sydney has led price growth over the past year. St Marys (+7.4%), Fairfield (+7.0%) and Liverpool (+6.8%) have recorded some of the strongest gains. In contrast, premium inner-city suburbs are still recording growth, but it’s been more restrained as affordability limits just how far prices can stretch.
Key Market Drivers Influencing Sydney Prices
Behind every price movement there are a few key forces pushing things along. In Sydney’s case, the same themes keep showing up: population pressure, interest rates, tight supply, and government policy.
Population Growth and Migration Patterns
Sydney’s long-term demand story is still about people. NSW is expected to add close to one million residents by 2034, with more than 650,000 of them settling in Sydney. That puts extra pressure on a housing market that already struggles with undersupply.
Migration is another layer. Returning expats and steady overseas arrivals are keeping demand high in Sydney, even as some interstate movers are drawn to cheaper capitals like Brisbane, Adelaide and Perth. For Sydney though, the population pipeline means there’s no real relief in sight for buyers hoping demand will ease.
Interest Rate Environment
As mentioned earlier, interest rates play a huge part in pushing property prices higher. When rates climbed through 2022 and 2023, demand cooled sharply. Now that the RBA has cut rates, the tide has turned.
The big banks expect more easing of interest rates:
CBA: expects the cash rate to drop to 3.35% in November 2025.
Westpac: the same, 3.35% by year-end 2025.
ANZ: the same, 3.35% by the end of 2025
NAB: expects the fall to continue with rates falling to 3.10% by February 2026.
Housing Supply and Development Pipeline
On the supply side, things are tight. New dwelling approvals in NSW have fallen to decade lows, and that’s flowing through to the market. SQM Research data showed that in mid-2025, new listings nationally were down 5.5% compared with a year earlier. With fewer fresh listings coming through, buyers are left chasing the same limited stock – and that pressure is keeping prices on the rise.
Economic Factors and Employment Trends
Sydney remains the country’s economic hub. The finance, tech and professional services sectors continue to attract skilled workers and overseas investors. With unemployment near record lows nationally and Sydney’s job market strong, the city’s housing demand is backed by solid fundamentals.
Policy and Regulatory Changes
Government policy also plays its part. First-home buyer schemes like the First Home Owner Grant and the First Home Super Saver Scheme continue to offer support, though rising prices often blunt the benefit. On the supply side, housing initiatives have struggled to keep pace with population growth.
Meanwhile, foreign investment in residential property is still tightly regulated, aimed at keeping local buyers in the game. The overall effect is mixed: incentives bring some extra demand at the entry level, while constraints on developers and investors limit new supply.
Expert Predictions for Sydney House Prices
The major banks expect Sydney property prices to continue increasing this year. NAB tips dwelling prices to rise about 2.7% in 2025, while Westpac’s forecast is closer to 3.0%. ANZ is a touch more optimistic, pencilling in 4.6% growth, as is the CBA which is predicting 5.0%.
In other capitals, Perth and Brisbane are still strong performers, while Melbourne and Canberra are expected to increase at a more modest rate. Sydney sits in the middle of the pack. Its growth is stable rather than spectacular.
“The Sydney market is showing clear signs of stabilisation after the volatility of recent years,” says Mansour Soltani, property analyst at Soren Financial. “Whilst we’re not expecting the explosive growth of 2021-2022, the fundamentals support continued modest appreciation through 2025 and beyond.”
Mansour Soltani, Soren Financial
2026-2027 Medium-Term Outlook
Looking further ahead, forecasts suggest Sydney property prices could pick up speed in 2026. Domain’s outlook has Sydney house prices rising around 7% that year, the strongest among the capitals. Melbourne and Brisbane are also expected to post solid mid-single-digit growth.
Units, interestingly, are tipped to do well too. Sydney unit prices are predicted to climb about 6% in 2026. This reflects improving affordability and strong rental demand. With more buyers priced out of houses, it makes sense that the demand for apartments will continue rising.
Factors That Could Change Predictions
Of course, forecasts can change quickly. A few things that could throw off the current predictions include:
A sharper or slower path of RBA interest rate cuts.
Changes to migration policy, which would directly affect housing demand.
Government moves to boost housing supply in a meaningful way.
Global economic shocks that ripple through Australian markets.
Buyer’s Market Analysis
Buying in Sydney isn’t a one-size-fits-all experience. What feels like a good window of opportunity in one price bracket might look completely different in another.
Best Time to Buy in Different Price Segments
Timing matters, but it depends on your price bracket. In the premium market ($2m+), competition is steady year-round because good homes in prestige suburbs are always in short supply. In the mid-market ($1m–$2m), winter can sometimes give buyers a little more room to negotiate, with fewer people at auctions. For those chasing entry-level properties ($800k–$1m), timing makes less difference. Ongoing demand from first-home buyers means anything affordable is snapped up quickly.
Affordability Challenges and Solutions
Affordability remains the toughest hurdle. Sydney’s median house price is well above $1.5m, which puts detached homes out of reach for many. Buyers are adjusting by:
Looking further west or southwest, where entry points are more affordable.
Considering units instead of houses to get a foot in the door.
Using first-home buyer schemes such as the First Home Buyer Assistance Scheme or the First Home Super Saver Scheme.
Speaking with mortgage brokers who can help maximise borrowing power.
First Home Buyer Market Conditions
Most first-home buyers are being pushed into Western and Southwestern Sydney, where prices are lower and units are still within reach. Government support does help, but rising prices continue to offset much of the benefit. For many, the strategy is about compromising on location first and upgrading later once equity builds.
First-home buyer tip: Use our property calculators to assess your borrowing capacity and determine realistic price targets for your first home purchase.
Investment Property Outlook
For property investors, the big question is whether to chase rental yield or capital growth – and in Sydney, the answer isn’t always straightforward.
Rental Yield Trends
Sydney’s rental market remains tight but yields are still slim. According to SQM and Cotality, gross rental yields sit at around 3.0%, the lowest of any capital city. House rents rose by about 1.8% over the past year, while unit rents were up 3.6%. Vacancy rates are around 1.5%, which continues to place pressure on tenants and underpins investor demand.
Capital Growth Potential by Area
Not every suburb has the same outlook:
Western Sydney still looks strong thanks to infrastructure investment and lower entry points.
Inner West has steady growth prospects and consistent rental demand, appealing to investors who prefer lower volatility.
Northern Beaches continues to perform as a lifestyle market – growth potential is there, but entry costs are much higher.
Investment Hotspots and Risks
Areas near major infrastructure upgrades, like the new Western Sydney Airport and transport links across the west and southwest, are getting a lot of attention from investors. Urban renewal precincts in the Inner West are also popular.
On the other side of the coin, high-rise buildings in places like Parramatta and Homebush remain oversupplied, which weighs on capital growth. Changes to interest rates or tax rules can also sway returns, especially in parts of the market where buyers are borrowing heavily.
Comparison with Other Australian Capitals
Sydney’s weight in the national housing story can’t be overstated. According to ABS data, Sydney alone accounts for about a quarter of Australia’s dwelling value, while NSW as a whole makes up closer to 40%. With that kind of concentration, what happens in Sydney tends to ripple through the rest of the country.
Sydney vs. Melbourne Price Performance
People love to line Sydney and Melbourne up against each other, and property prices are usually front and centre in that comparison. Sydney still wears the crown as the country’s most expensive market. The median house price in Sydney is $1.53 million, while Melbourne’s $1.06 million highlights just how wide the gap has become. Over ten years, Sydney values are up close to 48–50%, well ahead of Melbourne’s growth of around 38–40%.
What’s behind the difference? Sydney’s market has been held up by a shortage of new homes and constant demand for blue-chip suburbs. Melbourne’s property market, on the other hand, took longer to bounce back from the 2022–23 dip but is now finding its feet again as buyer confidence improves.
Brisbane and Perth Market Contrasts
Brisbane and Perth have been the standout performers in recent years, although they’re still far more affordable than Sydney. Brisbane’s median house price is just over $1.03 million, while Perth is closer to $934,000. Their appeal comes from the lower cost barrier mixed with healthy local economies and large migration inflows. For many buyers priced out of Sydney, these two cities have become the realistic alternatives.
What This Means for Sydney Property Stakeholders
The market’s recovery in 2025 affects different groups in different ways. Buyers, homeowners and investors are each facing their own mix of opportunities and challenges.
Potential Buyers
For anyone looking to buy, competition hasn’t gone away – especially for well-located homes in good suburbs. Properties near transport, schools and amenities still tend to draw multiple bidders. On the flip side, widening the search to middle- or outer-ring suburbs can open up more affordable options without necessarily giving up on long-term growth. Finance is also playing a larger role this year. With rates easing, pre-approvals are stretching budgets a little further and giving buyers the ability to move quickly when the right place comes along.
Current Homeowners
Homeowners are in a much better spot than they were a couple of years back. The gains of 2024–25 have restored a lot of the equity lost in the 2022–23 correction. Falling rates are also making refinancing more attractive, which in turn can free up cash flow. For many, that mix of stronger equity and a steadier market has made upgrading or downsizing feel like a realistic option again, rather than a risk.
Property Investors
Investors are juggling both yield and growth potential. Sydney’s rental market is still tight, with vacancy rates hovering around 1.5%. That’s kept rents moving higher, even though gross yields remain low. In terms of growth, the strongest prospects are still linked to infrastructure-heavy areas like Western Sydney, while established suburbs in the Inner West continue to perform steadily. Different property types are showing different results too, from boutique apartments to family homes, giving investors more ways to balance risk and return.
Summing Up
Sydney’s property market enters the second half of 2025 with renewed confidence and underlying strength. Prices are edging back toward record levels, helped by lower rates and short supply, while demand shows no sign of easing. Most experts expect steady growth into 2026 rather than another boom, which makes this a market driven more by patience and smart choices than quick wins. For buyers, owners and investors, it’s less about waiting for the perfect moment and more about focusing on the right property in the right location.
Want to find the top property experts in Sydney? Take a look at our list of recommended experts in Sydney.
Data sources: This article draws on market data and forecasts from Cotality, Domain, SQM Research, ABS, and the major banks (CBA, NAB, Westpac, ANZ).
Frequently Asked Questions
Are Sydney house prices going up or down in 2025?
Prices in Sydney are going up again this year. The median house price has climbed to about $1.53 million, up slightly from 2024. Growth isn’t explosive, but the trend is clearly upward as lower interest rates and tight supply keep demand strong.
Is now a good time to buy property in Sydney?
That depends on your personal circumstances. Affordability is still a common hurdle, but lower interest rates have given buyers a little more borrowing capacity. Instead of trying to time the market, most experts say it comes down to finding a home or investment that stacks up long term.
Which Sydney suburbs are growing the fastest?
Over the past year, the fastest-growing suburbs are in Western Sydney. St Marys, Fairfield and Liverpool have all recorded growth of 6–7%, thanks to better affordability and infrastructure like the new airport. Inner-city suburbs are still growing, but their gains have been smaller.
How does Sydney compare to Melbourne right now?
Sydney is still the most expensive city, with a median of about $1.53 million compared to Melbourne’s $1.06 million. Over ten years, Sydney prices have grown faster, driven by a shortage of homes and premium suburb demand. Melbourne’s property market is now picking up again after the 2022–23 downturn, but it’s still a fair way behind Sydney.
What’s happening with Sydney’s rental market?
It’s still very tight. Vacancy rates are sitting at about 1.5%, which means there aren’t many homes available, and that’s pushing rents higher. Yields remain low compared to other capitals, but landlords are finding demand for rentals strong across most parts of the city.
Will Sydney property prices keep rising in 2026?
Most forecasts say yes. Domain and the major banks expect Sydney house prices to rise by around 6–7% in 2026, with units also tipped to grow by about 6%. It won’t be another runaway boom, but gradual growth looks likely as demand stays strong and new housing supply struggles to keep up.
MANSOUR SOLTANI
With over two decades of experience in Australia’s real estate sector, Mansour has built a career specialising in the acquisition and sale of investment and commercial properties, spanning major metropolitan hubs and regional areas. As the founder and owner of a finance brokerage firm, he manages a loan portfolio exceeding $100 million while serving a broad range of clients nationwide.
A frequent contributor to money.com.au, Mansour has developed a deep understanding of diverse investment strategies, enabling him to provide valuable, well-informed perspectives on market trends and opportunities.
