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 remains Australia's most expensive property market, with a median house price that surpassed A$1.58 million at the end of 2025.
Prices have grown about 6% to 7% over the past year for houses, though the market is now cooling slightly at the edges.
We constantly update this blog post to give you the most current picture of Sydney housing prices and what experts expect for the coming years.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Sydney.
Insights
- Sydney house prices are growing more than twice as fast as unit prices in 2026, with houses up about 6.9% versus units at just 2.9%, showing how much buyers value land in this market.
- The fastest-rising suburbs in Sydney are almost all in the middle and outer rings, including Merrylands-Guildford and St Marys, both up around 12.5% in the past year.
- Sydney's vacancy rate sits around 1.4% in January 2026, which means well-priced rentals in inner suburbs often lease within a week.
- Domain forecasts Sydney house prices could reach A$1.92 million by the end of 2026, pushing the city closer to a $2 million median.
- The RBA cash rate is currently 3.60%, and Sydney reacts faster than most Australian cities when rates change, making financing conditions a key price driver.
- Net overseas migration to Australia reached 306,000 in the year to June 2025, creating ongoing demand pressure for Sydney housing and rentals.
- Properties within 400 metres of new Sydney Metro stations have historically seen price uplifts of up to 15% within three years of station opening.
- Sydney's price per square metre for houses is roughly A$6,500 to A$8,500, while apartments often trade at A$8,000 to A$12,000 per square metre due to smaller sizes and location premiums.
- The National Housing Accord aims to build 1.2 million homes over five years, but construction and planning bottlenecks mean Sydney's near-term supply will stay tight.
What are the current property price trends in Sydney as of 2026?
What is the average house price in Sydney as of 2026?
As of early 2026, the median house price in Sydney is approximately A$1.59 million (about US$1.05 million or EUR 950,000), making it the most expensive capital city market in Australia.
When you look at price per square metre, Sydney homes typically range from about A$6,500 to A$8,500 per square metre for houses (roughly US$4,300 to US$5,600), while apartments often trade at A$8,000 to A$12,000 per square metre because they tend to be smaller and located in higher-demand areas.
For a realistic picture of what most buyers actually pay, roughly 80% of Sydney property purchases fall between A$700,000 and A$2.5 million (about US$460,000 to US$1.65 million or EUR 420,000 to EUR 1.5 million), depending heavily on whether you are buying a unit in an outer suburb or a house in an established area.
How much have property prices increased in Sydney over the past 12 months?
Over the past 12 months in Sydney, overall property prices have risen by approximately 5.8% for all dwellings combined, though houses have outpaced units significantly.
Looking at specific property types, Sydney house prices increased by around 6.9% over the year, while unit prices grew by a more modest 2.9%, reflecting stronger demand for land and larger living spaces.
The single most important factor driving these price increases in Sydney has been the combination of stable interest rates and persistent undersupply, as not enough new homes are being built to keep up with population growth and demand.
Which neighborhoods have the fastest rising property prices in Sydney as of 2026?
As of early 2026, the three Sydney neighborhoods with the fastest rising property prices are Merrylands-Guildford, St Marys, and Richmond-Windsor, all in the middle and outer rings of Greater Sydney.
Annual price growth in these areas has been remarkable, with Merrylands-Guildford and St Marys both recording approximately 12.5% growth over the past year, while Richmond-Windsor followed closely behind with strong double-digit gains.
The main driver behind these rapid price increases is relative affordability combined with improved transport links, as buyers priced out of inner Sydney seek family-friendly suburbs where entry costs are lower and infrastructure upgrades are underway.
By the way, you will find much more detailed price ranges across neighborhoods in our property pack covering the real estate market in Sydney.
We have made this infographic to give you a quick and clear snapshot of the property market in Australia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
Which property types are increasing faster in value in Sydney as of 2026?
As of early 2026, the property types ranked by value appreciation in Sydney are detached houses (fastest), followed by terraces and semi-detached homes, then townhouses, and finally apartments and units (slowest).
The top-performing property type in Sydney right now is detached houses, which have appreciated by approximately 6.9% over the past year, more than double the growth rate of units.
The main reason houses are outperforming other property types in Sydney is land scarcity, as the supply of land in established suburbs is extremely limited, and buyers are willing to pay a premium for properties that include their own plot of land.
Finally, if you're interested in a specific property type, you will find our latest analyses here:
- How much should you pay for a house in Sydney?
- How much should you pay for an apartment in Sydney?
- How much should you pay for a townhouse in Sydney?
What is driving property prices up or down in Sydney as of 2026?
As of early 2026, the top three factors driving Sydney property prices are the stable interest rate environment at 3.60%, ongoing strong population growth from net overseas migration, and persistent undersupply of new housing relative to demand.
The single factor with the strongest upward pressure on Sydney property prices is the chronic housing shortage, as the National Housing Accord's target of 1.2 million new homes over five years faces construction bottlenecks and planning delays that keep supply well below what the market needs.
If you want to understand these factors at a deeper level, you can read our latest property market analysis about Sydney here.
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What is the property price forecast for Sydney in 2026?
How much are property prices expected to increase in Sydney in 2026?
As of early 2026, Sydney property prices are expected to increase by approximately 7% to 9% over the full year, with houses forecast to grow faster than units.
Forecasts from different analysts range from a conservative 5% to an optimistic 10% growth for Sydney in 2026, with most major property researchers clustering around the 7% mark for houses and 5% to 6% for units.
The main assumption underlying most of these Sydney price forecasts is that interest rates will remain stable or decrease slightly, which keeps borrowing power steady and supports buyer demand throughout the year.
We go deeper and try to understand how solid are these forecasts in our pack covering the property market in Sydney.
Which neighborhoods will see the highest price growth in Sydney in 2026?
As of early 2026, the neighborhoods expected to see the highest price growth in Sydney include Parramatta, Westmead, Bankstown, and the Inner South West suburbs near new Metro stations.
Projected price growth for these top Sydney neighborhoods ranges from 8% to 12% over the year, outperforming the broader Sydney average due to specific local catalysts.
The primary catalyst driving expected growth in these neighborhoods is major transport infrastructure, particularly the Metro Southwest conversion opening in 2026 and the ongoing Metro West development, which are reshaping commute times and accessibility.
One emerging neighborhood that could surprise with higher-than-expected growth is Camellia, which sits along the Parramatta Light Rail Stage 2 corridor and is undergoing significant urban renewal with relatively low current entry prices.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Sydney.
What property types will appreciate the most in Sydney in 2026?
As of early 2026, detached houses are expected to appreciate the most in Sydney, followed by terraces and semi-detached homes, then townhouses, with units trailing behind.
The projected appreciation for houses in Sydney during 2026 is approximately 7%, according to Domain's forecast, which would push the median house price close to A$1.92 million.
The main demand trend driving house appreciation in Sydney is the intense competition for land in established suburbs, combined with buyers trading up as their borrowing power improves with stable rates.
Units are expected to underperform houses in Sydney during 2026 because of higher supply in some corridors and because stretched affordability pushes some buyers toward smaller dwellings, limiting how much sellers can ask.
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.
How will interest rates affect property prices in Sydney in 2026?
As of early 2026, the stable interest rate environment is providing support for Sydney property prices, as buyers have more certainty about their borrowing costs and can plan purchases with confidence.
The current RBA cash rate stands at 3.60%, and most major bank economists expect rates to either hold steady or see one more small cut in early 2026, which would modestly improve mortgage affordability.
Historically in Sydney, a 1% change in interest rates can shift borrowing capacity by roughly 10% to 12%, which translates directly into how much buyers can afford to pay and tends to move prices in the same direction.
You can also read our latest update about mortgage and interest rates in Australia.
What are the biggest risks for property prices in Sydney in 2026?
As of early 2026, the three biggest risks for Sydney property prices are a potential re-tightening of interest rates if inflation rebounds, severe affordability constraints that could cap buyer demand, and localized oversupply in some high-density apartment corridors.
The risk with the highest probability of materializing in Sydney is the affordability ceiling, as many buyers are already stretched to their maximum borrowing capacity, which could slow price growth even if fundamentals remain supportive.
We actually cover all these risks and their likelihoods in our pack about the real estate market in Sydney.
Is it a good time to buy a rental property in Sydney in 2026?
As of early 2026, Sydney can still work as a rental investment, but it requires careful selection of location and property type because gross rental yields are low compared to other Australian capitals.
The strongest argument in favor of buying a rental property in Sydney now is the extremely tight vacancy rate of around 1.4%, which means well-located properties lease quickly and landlords have pricing power in negotiations with tenants.
The strongest argument for waiting before buying a rental property in Sydney is that entry prices are already at record highs and gross yields are compressed, meaning your initial cash returns will be modest while you wait for capital growth to materialize.
If you want to know our latest analysis (results may differ from what you just read), you can read our assessment on whether now is a good time to buy a property in Sydney.
You'll also find a dedicated document about this specific question in our pack about real estate in Sydney.
Buying real estate in Sydney can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Where will property prices be in 5 years in Sydney?
What is the 5-year property price forecast for Sydney as of 2026?
As of early 2026, cumulative property price growth in Sydney over the next five years is expected to be approximately 22% to 34%, depending on economic conditions and interest rate cycles.
The range of 5-year forecasts spans from a conservative scenario of around 22% total growth (assuming affordability constraints bite harder) to an optimistic scenario of 34% (if rates fall further and supply remains tight).
The projected average annual appreciation rate over the next five years in Sydney is approximately 4% to 6%, which is more moderate than the recent boom years but still meaningful for long-term wealth building.
The key assumption most forecasters rely on for their 5-year Sydney property price predictions is that population growth will remain strong due to continued migration, keeping demand elevated even as affordability challenges persist.
Which areas in Sydney will have the best price growth over the next 5 years?
The top three areas in Sydney expected to have the best price growth over the next five years are the Parramatta-Westmead corridor, the Bankstown line Metro conversion zone, and suburbs along the Parramatta Light Rail Stage 2 route including Camellia, Rydalmere, and Melrose Park.
Projected 5-year cumulative price growth for these top-performing Sydney areas could reach 35% to 50%, significantly outperforming the broader market average, driven by infrastructure completion and urban renewal.
This differs from the shorter 2026 forecast because the infrastructure projects are still under construction, so their full value impact will take several years to materialize as stations open and new residents move in.
The currently undervalued Sydney area with the best potential for outperformance over five years is the outer southwest, including suburbs like St Marys and Penrith, where the Western Sydney Airport opening in 2026 will create jobs and improve connectivity.
What property type will give the best return in Sydney over 5 years as of 2026?
As of early 2026, detached houses in middle-ring Sydney suburbs are expected to give the best total return over five years, combining capital growth with the scarcity value of land.
Projected 5-year total return for well-located Sydney houses, including both appreciation and rental income, could reach 40% to 55%, though this depends heavily on interest rate movements and the specific suburb chosen.
The main structural trend favoring houses over the next five years in Sydney is the persistent undersupply of detached homes in established areas, as most new development is high-density apartments that don't compete directly with houses.
For buyers seeking a balance of return and lower risk over five years, well-located townhouses in middle-ring Sydney suburbs offer a middle ground with more land exposure than apartments but lower entry costs than detached houses.
How will new infrastructure projects affect property prices in Sydney over 5 years?
The three major infrastructure projects expected to have the biggest impact on Sydney property prices over the next five years are Sydney Metro West (opening 2032), the Metro Southwest conversion (opening 2026), and the Western Sydney International Airport (opening 2026).
Based on past Sydney transport projects like the Light Rail, properties within 400 to 800 metres of completed stations typically see price premiums of 10% to 15% compared to similar properties further from transport.
The specific Sydney neighborhoods that will benefit most from these infrastructure developments include Westmead, Five Dock, Burwood North, The Bays, Pyrmont, Bankstown, and suburbs near the new Western Sydney Airport.
How will population growth and other factors impact property values in Sydney in 5 years?
Sydney's population is projected to grow by approximately 1.5% to 2% annually over the next five years, which translates to roughly 650,000 new residents by 2034, creating sustained demand for housing across the city.
The demographic shift with the strongest influence on Sydney property demand will be the continued growth of young professional households, many of whom are migrants seeking inner and middle-ring locations close to employment centers.
International migration will have the most significant effect on Sydney property values over five years, as the city remains Australia's primary destination for skilled migrants, students, and workers, who initially rent but eventually become buyers.
Family-sized houses and well-located townhouses in the middle ring will benefit most from these demographic trends in Sydney, as young households eventually upgrade from apartments when they have children and seek more space.
We made this infographic to show you how property prices in Australia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
What is the 10 year property price outlook in Sydney?
What is the 10-year property price prediction for Sydney as of 2026?
As of early 2026, cumulative property price growth in Sydney over the next 10 years is expected to be approximately 40% to 70%, with the wide range reflecting uncertainty about interest rates, supply delivery, and economic conditions.
The range of 10-year forecasts spans from a conservative scenario of around 40% total growth (approximately 3.5% annually) to an optimistic scenario of 70% (approximately 5.5% annually), depending on how well supply matches demand.
The projected average annual appreciation rate over the next 10 years in Sydney is approximately 3.5% to 5.5%, which is lower than the past decade's average but still represents meaningful long-term wealth accumulation.
The biggest uncertainty factor in making 10-year property price predictions for Sydney is the pace of new housing supply delivery, as the National Housing Accord's ambitious targets could reshape the market if they are actually achieved.
What long-term economic factors will shape property prices in Sydney?
The three most important long-term economic factors that will shape Sydney property prices over the next decade are interest rate cycles, population growth patterns, and the success or failure of housing supply delivery.
The single long-term economic factor with the most positive impact on Sydney property values will be continued population growth, driven by Australia's skilled migration program and Sydney's status as the country's global gateway city.
The single long-term economic factor posing the greatest structural risk to Sydney property values is affordability, as price-to-income ratios are already extremely stretched and could eventually limit how much buyers are able or willing to pay.
You'll also find a much more detailed analysis in our pack about real estate in Sydney.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Sydney, we always rely on the strongest methodology we can ... and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why It's Authoritative | How We Used It |
|---|---|---|
| Cotality (formerly CoreLogic) | Australia's most widely used transaction-based housing value index with monthly updates. | We used it as our primary source for Sydney median prices, annual growth rates, and fastest-growing suburbs. We also referenced their house versus unit performance data. |
| Domain Research | Major property marketplace with a dedicated economics and research team. | We sourced 2026 price forecasts for houses and units in Sydney. We also used their analysis of market drivers and rate sensitivity. |
| Reserve Bank of Australia | The official source for Australia's monetary policy and cash rate decisions. | We used the current cash rate to explain financing conditions. We also referenced RBA guidance on future rate expectations. |
| ABS Overseas Migration | Official government statistics on population movement and migration numbers. | We used migration data to quantify demand-side pressure on Sydney housing. We connected this to rental market tightness and buyer competition. |
| Australian Treasury | Federal government's official housing policy documentation and targets. | We referenced the National Housing Accord's supply targets. We explained why delivery constraints affect Sydney prices. |
| ABS Building Approvals | Official data on new dwelling approvals, a leading indicator of future supply. | We used approval trends to assess Sydney's supply pipeline. We explained why weak approvals support prices in the near term. |
| ABS Floor Area Data | Official benchmarks for dwelling sizes used in industry analysis. | We converted median prices to price-per-square-metre estimates. We clearly labeled these as estimates with stated assumptions. |
| Sydney Metro | Official project authority for Sydney's metro rail expansion. | We used Metro West timelines to identify growth suburbs. We explained how infrastructure reshapes property demand patterns. |
| NSW Government Transport | Official government source for transport project updates and timelines. | We referenced Parramatta Light Rail and Metro Southwest for suburb-level growth predictions. We mapped station locations to residential areas. |
| Western Sydney Airport | Official airport operator site with timeline and regional development context. | We used the 2026 opening date to explain outer west growth potential. We connected airport jobs to housing demand ripple effects. |
| SQM Research | Independent research firm specializing in rental and vacancy data. | We used their vacancy rate data to assess Sydney rental market tightness. We explained what low vacancy means for landlords and investors. |
| AIHW Housing Data | Government-backed housing data platform aggregating official series. | We used it as a cross-reference for housing indicator definitions. We ensured our terminology matched official standards. |
| Your Mortgage | Industry publication tracking Australian property prices and lending trends. | We cross-referenced Sydney median values and fastest-growing suburbs. We validated Cotality data against their independent reporting. |
| Property Update | Long-running property analysis site with expert market commentary. | We reviewed their 2026 outlook for Sydney market context. We used their analysis of two-phase market dynamics during the year. |
| OpenAgent | Property platform with suburb-level market data and bank forecast aggregation. | We referenced their summary of major bank price forecasts. We compared different institutional views on Sydney's 2026 trajectory. |
| Bloomberg | Global financial news organization with Australian property coverage. | We used their January 2026 reporting on Sydney price movements. We validated monthly momentum signals against other sources. |
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If you want to go deeper, you can read the following: