Is it worth it buying property in Sydney in 2025?

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

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Sydney. If you'd like to learn more about us, you can check our presentation page.

What types of properties are available to buy in Sydney right now?

Sydney's property market offers four main types of residential properties for buyers in 2025.

Detached houses remain the most sought-after option with a median price of $1.5 million. These properties dominate the inner rings and family-friendly suburbs, offering the highest potential for capital growth but requiring significant upfront investment.

Apartments and units present a more accessible entry point at around $860,000 median price. These properties attract investors due to their strong rental yields of 4.2% and lower maintenance requirements compared to houses.

Townhouses have gained popularity in middle-ring suburbs, providing a balance between affordability and living space. They typically range from $1.1 to $1.3 million and offer moderate rental yields around 3.5%.

New developments in Western and Northwest Sydney, particularly in areas like Marsden Park, offer house-and-land packages starting from $800,000, making them attractive for first-time buyers and investors seeking growth potential.

How much do properties cost compared to a few years ago, and what's the forecast for the next couple of years?

Sydney property prices experienced significant volatility between 2021 and 2025, with current values showing stabilization after earlier corrections.

In 2021, Sydney house prices peaked with median values growing 25.3% in a single year. This unprecedented growth was followed by price corrections in 2023-2024 as interest rates rose and affordability became stretched.

As of September 2025, median dwelling prices have stabilized around $1.21 million, with houses at $1.49 million and units at $860,000. This represents a modest rebound from the correction period, driven by interest rate cuts, tight supply, and continued high immigration.

The forecast for 2025 shows modest annual growth of 1-3%, with Domain projecting potential growth up to 7% by 2026. Looking ahead to 2027, steady annual growth around 4-5% is expected, with houses likely to outperform units in capital appreciation.

It's something we develop in our Australia property pack.

Is it smarter financially to buy a place or keep renting in Sydney in 2025?

The buy versus rent decision in Sydney depends on your financial situation and long-term goals, with both options presenting distinct advantages and challenges.

Buying property offers long-term capital growth potential, especially in high-growth or prestige areas. With prices expected to continue rising, homeownership provides protection against inflation and builds equity over time. However, the entry barrier is substantial, requiring significant deposits and dealing with high mortgage repayments.

Renting provides flexibility and lower upfront costs but offers little protection from Sydney's rapidly rising rental market. Median weekly rents have reached $770 for houses and $720 for units, with vacancy rates at historic lows creating intense competition among tenants.

From a financial perspective, if you have access to a deposit and stable income for mortgage approval, buying is generally more advantageous long-term. The key consideration is whether you can manage the initial costs including stamp duty, legal fees, and ongoing mortgage payments.

For those unable to secure financing or preferring flexibility, renting remains viable but budget for continued rent increases of 5-8% annually based on current market trends.

What are the main real estate market trends in Sydney this year?

Sydney's 2025 property market shows several key trends that buyers and investors should understand.

Supply constraints continue to drive market dynamics, with low new listings and quick sell rates creating competitive conditions. This tight supply supports price stability and rental growth across most property types.

Rising rents and yields represent a significant trend, with vacancy rates at historic lows pushing median weekly rents to record levels. Units deliver stronger yields at 4.2% compared to houses at 2.6%, making apartments more attractive for income-focused investors.

Population growth from high immigration continues driving demand, particularly for affordable units and entry-level houses. This demographic pressure supports rental markets and underpins long-term demand.

The price gap between houses and units has widened to a record 75%, with houses significantly outpacing unit price growth. This divergence creates different investment strategies depending on whether you prioritize capital growth or rental income.

Market fragmentation shows A-grade homes and investment-grade apartments outperforming generic stock, indicating quality properties command premiums in the current market environment.

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Which areas are considered affordable, which are upcoming, and which are more upscale, and what are the strengths and weaknesses of each?

For different budgets, what kind of properties can you realistically get in Sydney?

What's the step-by-step process of buying a property in Sydney as a local or as a foreigner?

The property buying process in Sydney follows structured steps that differ slightly for local and foreign buyers.

For Local Buyers:

Step 1: Assess your budget and obtain mortgage pre-approval from banks or lenders. This gives you clarity on borrowing capacity and strengthens your negotiating position.

Step 2: Research properties and target areas using online platforms, attending open inspections, and engaging local real estate agents for market insights.

Step 3: Inspect shortlisted properties thoroughly, including building and pest inspections for houses, and strata reports for apartments.

Step 4: Make offers through private treaty or participate in auctions. Auction bidding requires unconditional offers, while private sales allow subject-to-finance clauses.

Step 5: Engage a conveyancer or solicitor to handle legal aspects, contract review, and settlement coordination.

Step 6: Finalize contracts and pay the deposit (typically 5-10% of purchase price) within the cooling-off period if applicable.

Step 7: Complete settlement (usually 6-8 weeks later) and transfer property ownership, with final payment and key handover.

For Foreign Buyers:

Foreign buyers must first apply for FIRB (Foreign Investment Review Board) approval before purchasing, which can take 30-75 days. Open an Australian bank account and arrange finance with higher deposit requirements (20-30% typical). The remaining steps follow the local buyer process but require additional documentation and FIRB approval evidence at contract signing.

Where are the best places to actually find properties for sale—are real estate agencies the main option, or are there other platforms worth checking?

Sydney property buyers have multiple channels to find properties, with online platforms dominating the market alongside traditional agency relationships.

Major Online Platforms:

Realestate.com.au and Domain.com.au host the majority of Sydney listings, offering comprehensive search filters, price data, suburb profiles, and auction schedules. These platforms provide transparent market information and direct agent contact details.

Off-Market Opportunities:

Property Whispers and Listing Loop specialize in early access and exclusive private listings before they reach major platforms. These services often require membership fees but can provide competitive advantages in hot markets.

Real Estate Agencies:

Local and boutique agencies remain valuable, particularly for premium areas and off-market deals. Established agents often have exclusive relationships with vendors and can provide early notifications of upcoming listings.

Buyers Advocates:

Professional buyers' agents offer access to pre-market and private sales, especially beneficial for high-end buyers, expats, or time-poor investors. They charge fees but can access properties not publicly advertised.

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.

What are the common mistakes people make when buying property in Sydney and how can you avoid them?

Sydney property buyers frequently make costly mistakes that can be avoided with proper preparation and professional guidance.

Inadequate Financial Preparation:

Not securing loan pre-approval limits negotiation power and can result in missed opportunities. Always obtain conditional approval before seriously house hunting, and understand your borrowing capacity including all associated costs.

Underestimating Total Costs:

Many buyers focus only on the purchase price, forgetting stamp duty (up to $55,000+ for expensive properties), legal fees ($1,500-3,000), building inspections ($500-1,500), and moving costs. Budget an additional 5-7% of purchase price for these expenses.

Skipping Due Diligence:

Failing to conduct building and pest inspections, or not reviewing strata reports for apartments, can reveal expensive problems after purchase. Always invest in professional inspections and review all documentation carefully.

Emotional Decision Making:

Buying based on emotions rather than financial fundamentals leads to overpaying or choosing unsuitable properties. Set clear criteria for location, size, and budget before inspecting properties.

Ignoring Future Needs:

Not considering long-term requirements like family growth, work changes, or exit strategies can result in needing to sell sooner than planned. Research suburb growth potential and infrastructure developments affecting future value.

How much does it really cost to live in Sydney on top of owning a property there?

Living costs in Sydney extend well beyond mortgage or rent payments, requiring careful budgeting for a realistic cost assessment.

Basic Living Expenses:

A single person requires approximately $1,984 per month excluding housing costs, while a family of four needs around $7,077 monthly. These figures cover groceries, utilities, transport, healthcare, and personal expenses at moderate consumption levels.

Property-Related Ongoing Costs:

Homeowners face council rates ($1,200-3,000 annually), water rates ($700-1,500), home insurance ($800-2,000), maintenance and repairs (budget 1-2% of property value annually), and strata fees for apartments ($3,000-8,000+ annually depending on building amenities).

Transport and Utilities:

Public transport costs around $150-300 monthly depending on zones, while car ownership including registration, insurance, fuel, and parking can exceed $500 monthly in inner suburbs.

Inflation Impact:

All categories have risen above pre-pandemic levels, with current inflation around 4% affecting groceries, utilities, and services. Factor annual increases into long-term budgeting.

Mortgage Repayments:

High property prices and current interest rates mean substantial mortgage commitments. A $1.2 million property with 20% deposit results in monthly repayments around $5,500-6,500 depending on interest rates and loan terms.

If you're an expat, what's day-to-day life like in Sydney and what should you expect?

Sydney offers expats a high-quality lifestyle with multicultural communities, but adapting requires understanding local systems and managing higher living costs.

Multicultural Environment:

Sydney's diversity makes integration easier for expats, with established communities from most countries and multicultural neighborhoods offering familiar foods, services, and social networks. English proficiency greatly aids daily interactions and professional opportunities.

Outdoor Lifestyle:

The city's beaches, parks, and outdoor recreational facilities support an active lifestyle highly valued by residents. Work-life balance generally receives positive ratings, though this varies by industry and position level.

Housing Challenges:

Finding suitable accommodation requires persistence and often local agent assistance. Rental applications are highly competitive, requiring references, employment verification, and sometimes rental history. Many expats initially choose shorter-term furnished accommodations while securing permanent housing.

Essential Services:

Healthcare through Medicare (for eligible residents) or private insurance provides quality medical services. Schools offer high standards but places in prestigious areas can be extremely competitive, often requiring enrollment well in advance.

Social Integration:

While Sydney welcomes newcomers, building social networks requires effort through work, community groups, sports clubs, or hobby organizations. The high cost of living can be initially shocking compared to many home countries.

If you rent out the property, what's the outlook for long-term tenants and short-term tenants, and overall is it worth buying to live in, rent out, or resell later?

Sydney's rental market offers different opportunities for long-term and short-term letting strategies, each with distinct advantages and regulatory considerations.

Long-Term Rental Outlook:

Ultra-low vacancy rates below 2% create strong tenant demand and support rent increases of 5-8% annually. Apartments deliver better yields averaging 4.6%, while houses provide 2.6% but offer superior capital growth potential. Target areas like Inner West, Parramatta, Green Square, and Marsden Park show strong rental demand and yield potential.

Short-Term Rental Considerations:

Airbnb and holiday letting can generate premium income in desirable locations near CBD, beaches, or Eastern Suburbs, but face increasing regulation. Many councils restrict short-term lets, and some buildings prohibit them entirely. Higher turnover creates additional management costs and vacancy periods between bookings.

Investment Strategy Recommendations:

Units suit investors seeking cash flow with yields up to 6% in select locations, while houses and townhouses provide better capital growth for long-term wealth building. Upcoming suburbs with planned infrastructure and tight supply offer the best combined returns.

Buy vs Rent vs Invest Decision:

Buying to live in suits those seeking stability and long-term capital growth, particularly in high-growth or prestige areas. Renting provides flexibility but offers no protection from rising costs. Investment properties work best for cash flow (units) or capital growth (houses/townhouses) depending on your financial goals and risk tolerance.

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.

Sources

1. Metropole - Sydney Housing Market Update
2. OurTop10 - Average House Price Sydney
3. PB Property - Future of Sydney's Property Market 2025
4. Ready Set Buy - Best Suburbs to Invest Sydney 2025
5. OpenAgent - Sydney Property Market
6. Property Update - Property Investment Sydney
7. Muval - Cost of Living in Sydney
8. OpenAgent - Cheapest Suburbs in Sydney
9. Rose and Jones - Most Expensive Sydney Suburbs 2025
10. Global Property Guide - Australia Rental Yields