Authored by the expert who managed and guided the team behind the Australia Property Pack
Yes, the analysis of Sydney's property market is included in our pack
Sydney's property market outlook for the remainder of 2025 shows steady growth momentum following the Reserve Bank of Australia's interest rate cuts.
As of September 2025, Sydney house prices have reached a median of $1,525,956 with annual growth of 2.2%, while apartments sit at $863,257 with more modest 0.7% growth, creating a record gap between house and unit values that's driving investor interest toward higher-yielding apartments.
If you want to go deeper, you can check our pack of documents related to the real estate market in Australia, based on reliable facts and data, not opinions or rumors.
Sydney's property market is experiencing steady growth in 2025, driven by population growth, tight rental conditions, and RBA interest rate cuts from 4.35% to 3.60%.
Houses continue to outperform apartments with stronger capital growth, while apartments offer superior rental yields of 4.2% compared to 2.6% for houses, making them attractive to cash-flow focused investors.
| Key Metric | Houses | Apartments/Units |
|---|---|---|
| Median Price | $1,525,956 | $863,257 |
| Annual Growth | 2.2% | 0.7% |
| Rental Yield | 2.6% | 4.2% |
| Weekly Rent | $770 | $720 |
| Best Performing Areas | Western Sydney suburbs | Inner West, Central locations |
| Growth Forecast 2025 | 3-4% | 4-5% |
What's the current average house price in Sydney and how has it changed over the past 12 months?
Sydney's median house price currently sits at $1,525,956 as of September 2025, representing annual growth of 2.2%.
This growth reflects steady momentum despite affordability challenges, with monthly increases of 0.6-0.8% recorded throughout 2025. The Sydney house market has gained $658,000 more value than apartments on average, creating a record gap between the two property types.
House prices have risen 27.7% since the onset of COVID-19, demonstrating the market's long-term resilience. The growth trajectory has been supported by low supply levels and sustained demand from both owner-occupiers and investors.
Western Sydney suburbs are leading price appreciation, with areas like Fairfield recording 7.6% annual growth and St Marys achieving 7.3% growth. Premium suburbs in the Eastern Suburbs and North Shore continue to command higher prices but show more moderate growth rates.
It's something we develop in our Australia property pack.
How are apartment prices performing compared to houses across different Sydney suburbs?
Sydney apartments are significantly underperforming houses in terms of capital growth, with units recording only 0.7% annual growth compared to houses at 2.2%.
The median apartment price stands at $863,257, creating a substantial affordability gap with houses. However, apartments deliver superior rental yields at 4.2% versus 2.6% for houses, making them attractive for income-focused investors.
Unit price growth varies dramatically by location, with inner-city areas like Redfern showing 10% annual growth and gentrifying suburbs outperforming established premium locations. Western Sydney units in areas like Cranebrook have achieved 11.2% growth over the past year.
The apartment market benefits from strong rental demand driven by affordability constraints and migration patterns. First-home buyers and investors are increasingly turning to units as houses become prohibitively expensive for many market participants.
What's the current rental yield in Sydney and how is rental demand trending?
Sydney rental yields currently average 3.0% overall, with significant variation between property types and locations.
Apartments deliver substantially higher yields at 4.2%, while houses provide lower yields at 2.6% due to their higher purchase prices. Some central apartment locations achieve yields up to 5.6% for one-bedroom units.
Rental demand remains exceptionally strong, with weekly rents increasing 1.8% for houses and 3.6% for units annually. Median weekly rents have reached $770 for houses and $720 for apartments as of September 2025.
The rental market benefits from tight vacancy conditions, returning overseas migration, and affordability pressures pushing more people into rental accommodation. Competition for rental properties remains fierce, particularly for well-located apartments near transport and employment hubs.
How many properties are currently on the market in Sydney compared to last year?
Property listings in Sydney remain significantly below historical averages, with national listings approximately 20% below the five-year average.
The tight stock levels are contributing to sustained price pressure across the market. Sellers are holding back inventory, creating a supply-constrained environment that favors vendors over buyers.
Auction volumes have increased modestly compared to 2024, but total available stock remains limited. The shortage is particularly acute for quality properties in desirable locations, where days on market average just 25-30 days for well-presented homes.
Winter typically sees reduced listing activity, but the spring selling season of 2025 is expected to bring more properties to market. However, many experts predict that new listings will still fall short of buyer demand, maintaining upward pressure on prices.
Don't lose money on your property in Sydney
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What are the current auction clearance rates in Sydney and how do they compare to historical averages?
Sydney auction clearance rates have stabilized around 69-79% in recent weeks, demonstrating healthy buyer demand despite affordability challenges.
As of August 2025, preliminary clearance rates averaged 69.1%, which is above the same period last year (61.7%) but below the peak rates of 76.6% recorded in February 2025. These levels indicate a balanced market with strong competition for quality properties.
Clearance rates above 70% are generally considered indicative of a seller's market, while rates below 60% suggest buyer-favorable conditions. Current levels show the market is functioning well despite economic headwinds.
Houses achieve clearance rates of approximately 78.6%, while units perform even better at 80.7%, reflecting stronger competition for apartment stock. The auction market typically strengthens as borrowing conditions improve with interest rate cuts.
How are interest rate changes from the Reserve Bank of Australia affecting borrowing capacity in Sydney?
The RBA has cut the cash rate from 4.35% to 3.60% through three reductions in 2025, significantly improving borrowing capacity for Sydney property buyers.
Each 0.25% rate cut increases borrowing capacity by approximately 2.5-3%, with the cumulative impact providing substantial relief to buyers. Major banks are passing through the full rate reductions, with variable mortgage rates now starting from around 5.34%.
Further rate cuts are anticipated, with major banks forecasting the cash rate to fall to 3.10-3.35% by early 2026. This would provide additional borrowing capacity improvements and support continued price growth.
Sydney is historically the most rate-sensitive property market in Australia, meaning these cuts are already translating into increased buyer activity and faster decision-making, particularly in middle-ring family suburbs where borrowing capacity improvements have the greatest impact.
What government incentives, grants, or tax policies are currently influencing Sydney buyers or investors?
The NSW Government has invested $2.5 billion in new housing developments to address affordability concerns and increase rental supply.
First-home buyer grants and stamp duty exemptions continue to provide support for new entrants, though these incentives have limited impact given Sydney's high property prices. The government has also implemented rental market reforms including longer lease terms and rental assistance programs.
A significant 5-year housing completion target has been set for 43 councils across Greater Sydney, with the state government threatening to step in and approve projects if councils don't act on medium and high-density developments.
Infrastructure investment of $19 billion from the Federal Government and $21 billion from the State Government is flowing into Western Sydney, creating significant opportunities around the new Western Sydney Airport and transport corridors.
What's the forecast for population growth and migration into Sydney over the next 5 years?
Sydney's population is forecast to grow by over 650,000 people by 2034, creating enormous pressure on an already undersupplied housing market.
NSW will accommodate nearly 1 million additional residents by 2034, with the majority settling in Greater Sydney. This represents one of the strongest population growth periods in the city's history, driven by returning international migration and interstate movement.
Australia's net migration has increased to over 400,000 annually since COVID-19 restrictions ended, with Sydney remaining the primary destination for new arrivals. The return of overseas students, skilled workers, and long-term migrants has re-energized inner-city rental markets.
Current housing supply of approximately 30,000 new homes annually falls far short of the 60,000+ needed to accommodate this growth. This supply-demand imbalance will continue to support property prices and rental growth over the forecast period.
It's something we develop in our Australia property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Australia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
Which Sydney suburbs are showing the strongest price growth and which are in decline?
| Strong Growth Suburbs | Annual Growth | Median Price |
|---|---|---|
| Fairfield | 7.6% | $1,170,000 |
| St Marys | 7.3% | $990,000 |
| Brighton-Le-Sands | 14% | $2,000,000 |
| Winston Hills | 5%+ | $1,616,000 |
| Buxton | 5%+ | $812,500 |
| Gregory Hills | 7% annually | $910,000 |
| Ingleburn | 9% | Under $1M |
What are vacancy rates across Sydney and how are they shifting in the short term?
Sydney's rental vacancy rate sits at 1.5% as of September 2025, well below the balanced range of 2-3% and indicating continued tight rental conditions.
This represents a slight improvement from the record lows of 1.1% recorded earlier in 2025, but conditions remain challenging for tenants. Some areas like Sutherland Shire record vacancy rates as low as 0.365%, while Camden and Bankstown sit at 0.4%.
The tight vacancy conditions are driving rental price growth and providing strong support for investor returns. Competition for rental properties remains fierce, with quality properties typically leasing within days of being advertised.
While new apartment supply is expected to provide some relief, demand from population growth and returning migration will likely keep vacancy rates below balanced levels through 2025 and beyond. Rental market conditions are expected to remain favorable for landlords.
How is infrastructure development impacting property demand in Sydney?
Major infrastructure investments totaling over $40 billion are reshaping Sydney's property landscape, with Western Sydney Airport opening in 2026 as the key catalyst.
The Sydney Metro expansion is revolutionizing transport connectivity, with the City & Southwest line operational and Metro West targeting 2032 completion. These projects are creating new property hotspots along transport corridors and reducing travel times to the CBD.
- Western Sydney Airport Corridor: Areas like Gregory Hills and surrounding suburbs are experiencing 10-15% price appreciation as the airport nears completion
- Metro West Alignment: Suburbs near future stations including Westmead, Parramatta, and Five Dock are seeing increased investor interest
- Parramatta Light Rail: Stage 2 extension will further enhance connectivity and property values in growth corridors
- WestConnex Completion: Improved road access is reducing travel times and supporting property demand in previously less-connected areas
- Urban Renewal Precincts: Government-led renewal projects are creating new residential and commercial hubs across the metropolitan area
What are experts and major banks forecasting for Sydney property prices over the next 12 to 24 months?
Expert forecasts for Sydney property prices show convergence around 3-5% growth for 2025, with stronger momentum expected in 2026.
Westpac predicts 3.0% growth for 2025, NAB forecasts 2.7%, while ANZ is more optimistic at 4.6%. KPMG specifically forecasts house prices to rise 3.3% and unit prices by 5% for 2025, reflecting the divergent performance between property types.
Looking ahead to 2026, forecasts become more bullish with Sydney expected to achieve 7.8% house price growth and 6.1% unit price growth as interest rate cuts flow through to borrowing capacity and buyer confidence.
These projections assume continued RBA rate cuts to 3.10-3.35% by early 2026, ongoing population growth, and limited new housing supply. The consensus view is for steady rather than explosive growth, constrained by affordability limits but supported by fundamental demand drivers.
It's something we develop in our Australia property pack.
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.
Sydney's property market outlook for 2025 remains cautiously optimistic, supported by fundamental drivers including population growth, infrastructure investment, and improving borrowing conditions following RBA rate cuts.
While house prices continue to outpace apartments in capital growth, the significant yield differential makes apartments increasingly attractive to investors seeking cash flow, particularly as affordability constraints push more buyers toward the unit market.
Sources
- Sydney property market data, trends and forecasts 2025 - OpenAgent
- Sydney housing market update - Metropole
- Sydney Housing Market Trends & Predictions - Property Update
- House prices to rise by 3.3%, units by 4.6% in 2025 - KPMG
- The Latest Rental Vacancy Rates around Australia - Property Update
- Interest Rate Forecast & Predictions For 2025 - Canstar
- The 10 fastest-growing suburbs in Sydney for 2025 - Smart Property Investment
- Statement by the Monetary Policy Board - Reserve Bank of Australia
- Apartment Vacancy and Rent Outlook Report 1H 2025 - CBRE
- Sydney Metro Western Sydney Airport progress - NSW Government