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Kensington remains one of Sydney's most premium and sought-after inner suburbs in 2025.
Property prices in Kensington sit well above Sydney averages, with houses ranging from $3.06-$4.2 million and apartments from $955,000-$1.12 million. The suburb's proximity to UNSW creates exceptional rental demand, making apartments particularly attractive for investors with yields of 4.1-4.2%. While entry costs are substantial, Kensington offers strong fundamentals driven by university demand, heritage appeal, and limited developable land.
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Kensington houses command median prices of $3.06-$4.2 million while apartments range from $955,000-$1.12 million as of September 2025.
The suburb offers superior rental yields for apartments (4.1-4.2%) compared to houses (2.04-2.05%), with vacancy rates remaining exceptionally tight due to university proximity.
| Property Type | Median Price | Weekly Rent | Rental Yield |
|---|---|---|---|
| 1-Bedroom Apartment | $685,000-$700,000 | $480-$790 | 4.0-4.3% |
| 2-Bedroom Apartment | $1,123,000 | $800 | 4.1% |
| 3-Bedroom Apartment | $1,448,000 | $850-$950 | 3.8-4.0% |
| Family House | $3.06-$4.2 million | $820 | 2.04-2.05% |
| Heritage House | $4.2+ million | $900-$1,200 | 1.8-2.2% |
| UNSW Proximity Premium | +10-20% above median | +15-25% rental premium | Higher turnover |
| Centennial Park Area | +15-30% above median | Standard rates | Lower yields, higher growth |
What are the current median prices for houses and apartments in Kensington right now?
Houses in Kensington currently command median prices between $3.06 million and $4.2 million as of September 2025.
Apartments range from $955,000 to $1.12 million depending on size and specific location within the suburb. One-bedroom apartments typically transact around $685,000-$700,000, while two-bedroom units sell for approximately $1.12 million.
Three-bedroom apartments reach $1.448 million, reflecting the premium nature of this inner Sydney location. Heritage homes and premium properties near Centennial Park command the highest prices, often exceeding $4.2 million for Federation-style houses on larger blocks.
These prices position Kensington well above Sydney's median house price of $1.48 million, confirming its status as a premium market. Properties within walking distance of UNSW typically sell for 10-20% above the suburb average due to exceptional rental demand.
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How have property prices in Kensington changed over the past 12 months compared to the wider Sydney market?
Kensington house prices increased approximately 10.5% year-on-year, significantly outperforming the wider Sydney market where growth was typically below 2% on average.
Unit prices in Kensington grew by just 0.4% over the same period, underperforming compared to houses in the suburb. This reflects different demand dynamics between property types in this university-adjacent location.
The performance gap between Kensington and broader Sydney reflects the suburb's unique fundamentals, particularly university-driven demand and limited supply of premium housing stock. In nearby Centennial Park, unit prices actually declined by approximately $60,000 over the past year to $950,000.
This divergent performance highlights how micro-location factors significantly impact price movements, even within premium inner Sydney suburbs. Kensington's proximity to UNSW and established rental market appears to provide more price stability and growth potential than neighboring areas.
What are the short-term price forecasts for Kensington in 2025?
Sydney-wide forecasts predict house prices rising 3.3% and units 4.6% in 2025, with Kensington expected to outperform these averages.
Apartments in Kensington are particularly well-positioned due to ongoing university-driven rental demand and extremely tight vacancy rates. The combination of student accommodation needs and young professional renters creates sustained upward pressure on both rents and sale prices.
Houses may see more modest growth in line with broader Sydney trends, though premium properties near Centennial Park and heritage homes could exceed average performance. The limited supply of developable land continues to support price appreciation.
Market conditions remain favorable with vacancy rates forecast at just 1.2% Sydney-wide for units in 2025, down from 2.2% previously. This exceptionally tight rental market underpins continued price growth expectations.
What is the medium-term outlook for Kensington property values over the next 3-5 years?
Sydney is expected to lead national property growth, with projected increases of 7.8% for houses and 6.1% for units by 2026.
Kensington's limited developable land and heritage protections create ongoing supply constraints that support above-average price appreciation. The suburb's unique demographic profile, with 57% of residents aged 20-39, ensures continued demand from both university-connected buyers and young professionals.
University staff and student demand provides a stable foundation for medium-term growth, as UNSW continues expanding and attracting international students. This creates both direct housing demand and secondary demand from academic and support staff.
Infrastructure improvements including the completed CBD to South East Light Rail enhance connectivity and amenity, supporting long-term value appreciation. Future urban renewal plans and housing targets suggest further density near transport and education hubs.
What are the long-term trends for Kensington, considering infrastructure projects, demographics, and university demand?
Long-term trends strongly favor Kensington due to its irreplaceable proximity to UNSW and established infrastructure connections to Sydney's CBD.
Demographics skew heavily toward young professionals and academics, with 57% of residents aged 20-39, creating sustained demand for both rental and purchase markets. This demographic profile typically indicates strong spending power and lifestyle preferences that support premium housing demand.
The completed CBD to South East Light Rail provides enhanced connectivity, while future planned infrastructure improvements continue to boost the suburb's accessibility and desirability. Heritage protections ensure the character and exclusivity that premium buyers seek.
University demand provides exceptional stability compared to purely residential suburbs, as educational institutions represent long-term anchor tenants that generate consistent housing needs. UNSW's ongoing expansion and international reputation ensure this demand source remains robust.
Significant new housing targets and urban renewal plans suggest controlled densification near transport and education hubs, potentially increasing supply while maintaining the suburb's premium character.
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How do rental yields compare between apartments and houses in Kensington today?
Units in Kensington deliver significantly superior rental yields at 4.1-4.2% compared to houses at 2.04-2.05%.
Two-bedroom apartments generate median weekly rents of approximately $800, translating to strong yields on the $1.12 million median purchase price. One-bedroom units can achieve weekly rents between $480-$790 depending on proximity to UNSW and property condition.
Houses, despite commanding higher weekly rents around $820, produce lower yields due to their substantially higher purchase prices of $3-4.2 million. This reflects the premium paid for house ownership in this tightly held inner suburb.
Compared to Sydney-wide averages where houses yield approximately 2.6% and units 3.9%, Kensington units perform slightly above average while houses underperform due to their premium pricing. The university proximity creates exceptional rental demand that supports these yield levels.
What vacancy rates are landlords facing in Kensington, and how do they compare to nearby suburbs?
Sydney city-wide unit vacancy is forecast at just 1.2% for 2025, down from 2.2%, reflecting exceptionally tight rental conditions.
Kensington experiences similar or even lower vacancy rates due to consistent student and university staff demand. Properties near UNSW typically experience very fast turnover with minimal vacancy periods between tenants.
Sydney's overall residential vacancy rate stands at 1.5% as of February 2025, with Kensington typically performing better than this citywide average. The suburb's unique demographic profile creates reliable rental demand throughout the academic year.
This exceptionally tight vacancy environment provides landlords with strong negotiating power and supports continued rental growth. Properties targeting the university market often have waiting lists of potential tenants.
How much do entry-level one-bedroom apartments cost versus family-sized houses in different pockets of Kensington?
Entry-level one-bedroom apartments start from $685,000-$700,000, representing the most accessible entry point into Kensington's property market.
Family-sized houses command $3-4.2 million, creating a substantial price gap that reflects the premium placed on house ownership in this tightly held inner suburb. Three-bedroom apartments at $1.448 million offer a middle-ground option for families.
Near UNSW, all property types command 10-20% premiums above suburb medians due to exceptional rental demand and convenience for university-connected buyers. Properties within easy walking distance of campus are particularly sought after.
The leafy streets near Centennial Park command 15-30% premiums above median prices, especially for Federation-style houses on larger blocks. These areas appeal to families and professionals seeking prestige locations with park access.
The Eastlakes border areas typically offer more affordable options for both apartments and houses, though still well above Sydney averages, making them attractive for buyers seeking Kensington addresses at relatively modest discounts.
Which parts of Kensington are performing better—close to UNSW, near Centennial Park, or towards Eastlakes?
Areas close to UNSW deliver the strongest investment performance, with apartments selling for 10-20% above suburb averages and renting out rapidly to students and university staff.
The Centennial Park precinct commands the highest prices, particularly for family homes, with Federation-style houses on larger blocks selling for 15-30% above median. These areas appeal to affluent families and professionals seeking prestige addresses with parkland amenity.
Properties near the university benefit from exceptional rental demand, fast tenant turnover, and consistent capital growth supported by the education sector's stability. This makes them particularly attractive for investors seeking reliable returns.
Heritage streets and quiet leafy pockets near Centennial Park demonstrated the strongest capital growth over the past year, with houses achieving up to 10.5% growth. These areas attract owner-occupiers willing to pay premiums for lifestyle and prestige.
The Eastlakes border areas offer relative affordability but typically underperform the university and park precincts in both rental yield and capital growth terms.
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If you are buying to live in Kensington, what budget range should you realistically prepare for in 2025?
House buyers should prepare $3-4.2 million plus 6-8% in transaction and immediate maintenance costs, including stamp duty of approximately $225,000.
Apartment buyers need $950,000-$1.12 million plus 5-6% transaction costs, with stamp duty around $38,000 for median-priced units. One-bedroom apartments offer the most accessible entry point at $685,000-$700,000.
Renovation budgets should account for $50,000 for cosmetic improvements up to $200,000 for full renovations, especially for older housing stock. Many Kensington properties require updates to meet modern living standards.
Additional costs include building inspections, legal fees, and potential body corporate fees for apartment purchases. Properties near UNSW command 10-20% premiums, requiring correspondingly higher budgets.
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If you are buying to rent out, which property types and price brackets are likely to give the best return?
One- and two-bedroom apartments near UNSW deliver the best rental returns, achieving weekly rents of $800 and yields of 4.1-4.2%.
Properties priced between $685,000-$1.12 million in the apartment segment offer optimal yield-to-price ratios. Modern developments like The Kensington on Anzac Parade achieve particularly strong rental performance.
Two-bedroom units targeting university students, academic staff, and young professionals provide the most reliable rental income with minimal vacancy periods. These properties often have waiting lists of potential tenants.
Apartments with university proximity experience fast turnover, allowing for regular rental increases and minimal lost rental days between tenancies. This creates superior total returns despite slightly higher management requirements.
Houses, while achieving higher weekly rents around $820, deliver lower yields of 2.04-2.05% due to their premium purchase prices, making them less attractive for yield-focused investors.
If you are buying to resell, which areas and property types have shown the strongest capital growth and buyer demand?
Heritage Federation homes and properties close to Centennial Park demonstrate the strongest capital growth and buyer demand, with house prices increasing up to 10.5% over the past year.
Apartments near transport links and UNSW sell quickly and achieve premium prices, particularly modern developments with quality finishes and university proximity. These properties benefit from both investor and owner-occupier demand.
Quiet leafy streets with established character homes consistently outperform, appealing to affluent buyers seeking prestige addresses. Properties on larger blocks with heritage features command significant premiums and sell rapidly.
The combination of university proximity and heritage character creates the strongest capital growth potential, as these factors are irreplaceable and create ongoing scarcity value.
Modern apartment developments near campus access points achieve strong resale performance due to their appeal to both investors seeking rental returns and owner-occupiers wanting convenience.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Kensington represents a premium investment opportunity in Sydney's inner suburban ring, offering exceptional fundamentals driven by university proximity and heritage appeal.
While entry costs are substantial, the suburb provides strong rental yields for apartments and consistent capital growth for houses, supported by limited supply and sustained demand from education sector connections.
It's something we develop in our Australia property pack.
Sources
- Domain - Kensington Suburb Profile
- Area Search - Kensington Sale Trends
- BambooRoutes - Kensington Sydney Analysis
- BambooRoutes - Sydney Price Forecasts
- KPMG - House Price Forecasts 2025
- RealEstate.com.au - Kensington Property Listing
- Your Investment Property - Kensington Suburb Analysis
- Domain - Boronia Street Property Listing