How's the real estate market doing in Sydney? (2026)

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

How's the real estate market going in Sydney in 2026?

What's the average days-on-market in Sydney in 2026?

As of early 2026, the estimated average days-on-market for residential properties in Sydney sits at around 35 days, which means most homes sell within five weeks of listing.

The realistic range for most typical Sydney listings falls between 30 and 45 days, though premium homes in sought-after suburbs can sell faster while properties with compromises (busy roads, older apartments, high strata levies) often take longer.

Compared to one or two years ago, Sydney's current days-on-market figure has remained relatively stable, sitting in the same band it was in late 2024, which suggests the market is neither overheating nor cooling dramatically.

Are properties selling above or below asking in Sydney in 2026?

As of early 2026, Sydney properties on average sell slightly below the initial asking price by around 2% to 4%, though standout homes in competitive areas often sell at or above asking, especially at auction.

Roughly 30% to 40% of Sydney properties sell above asking (particularly through auctions), while the remaining 60% to 70% sell at or below asking, though our confidence in these figures is moderate because Sydney's heavy use of auctions makes direct comparisons tricky.

The property types and neighborhoods most likely to see bidding wars and above-asking sales in Sydney include family houses in the Inner West (Marrickville, Dulwich Hill), coastal units in the Eastern Suburbs (Bondi, Coogee), and homes near new Metro stations, where competition among buyers remains fierce.

By the way, you will find much more detailed data in our property pack covering the real estate market in Sydney.

What kinds of residential properties can I realistically buy in Sydney?

What property types dominate in Sydney right now?

The estimated breakdown of residential property types available in Sydney in 2026 is roughly 40% detached houses, 45% apartments and units, and 15% townhouses and semi-detached homes, though this varies significantly by location.

Apartments and units represent the largest share of Sydney's property market, especially in inner-city and transport-connected areas where land is scarce and new supply can only be built upward.

Apartments became so prevalent in Sydney because the city's geography (harbor, national parks, coastline) limits outward expansion, so medium and high-density housing near train stations and the CBD became the main way to accommodate population growth.

If you want to know more, you should read our dedicated analyses:

• 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?

Are new builds widely available in Sydney right now?

The estimated share of new-build properties among all Sydney residential listings currently sits at around 15% to 20%, with most new supply concentrated in apartments and off-the-plan developments rather than detached houses.

As of early 2026, the neighborhoods with the highest concentration of new-build developments in Sydney include Parramatta, Sydney Olympic Park, Zetland (Green Square), Waterloo, Westmead, and parts of the Hills District, where major urban renewal and Metro-connected precincts are driving construction activity.

Which neighborhoods are improving fastest in Sydney in 2026?

Which areas in Sydney are gentrifying in 2026?

As of early 2026, the top neighborhoods in Sydney showing the clearest signs of gentrification include Marrickville, Dulwich Hill, Canterbury, Campsie, Lakemba, Sydenham, and Mascot, all of which sit within a 10 to 15 kilometer band from the CBD.

The visible changes indicating gentrification in these Sydney areas include the arrival of specialty coffee shops and craft breweries replacing older industrial spaces, renovated Victorian terraces with modern extensions, a growing population of young professionals, and upgraded streetscapes with new bike lanes and public spaces.

The estimated price appreciation in Sydney's gentrifying neighborhoods over the past two to three years has ranged from 15% to 30%, with suburbs like Marrickville seeing unit values grow by over 125% in the past decade and around 7% in the past year alone.

By the way, we've written a blog article detailing what are the current best areas to invest in property in Sydney.

Where are infrastructure projects boosting demand in Sydney in 2026?

As of early 2026, the top areas in Sydney where major infrastructure projects are currently boosting housing demand include Westmead, Parramatta, Sydney Olympic Park, Five Dock, Pyrmont, Burwood North, and Bankstown, all of which are located along current or upcoming Metro lines.

The specific infrastructure projects driving that demand in Sydney include Sydney Metro West (connecting Westmead to Hunter Street in the CBD), the Sydney Metro City and Southwest extension to Bankstown, and major urban renewal precincts like Blackwattle Bay and The Bays, which are transforming former industrial waterfront areas.

The estimated timeline for completion of these major Sydney projects is 2026 for the Metro extension to Bankstown and 2032 for Sydney Metro West, with tunnel boring on the Metro West project now over 80% complete.

The typical price impact on Sydney properties once infrastructure projects are announced versus completed tends to be a 5% to 10% lift at announcement, followed by another 10% to 20% premium once the project is operational, though this varies by proximity to stations and existing transport access.

What do locals and insiders say the market feels like in Sydney?

Do people think homes are overpriced in Sydney in 2026?

As of early 2026, the general sentiment among locals and market insiders in Sydney is that homes are expensive but quality properties in good locations still sell quickly, reflecting a "stretched but supported" market where affordability concerns coexist with strong underlying demand.

The specific evidence locals cite when arguing Sydney homes are overpriced includes the price-to-income ratio of around 13 to 15 times median household income (one of the highest in the world), the fact that a household needs to earn roughly $280,000 per year to afford the median Sydney house, and the reality that saving a 20% deposit takes over 11 years for the average household.

The counterarguments given by those who believe Sydney prices are fair include the city's limited land supply (hemmed in by harbor, mountains, and national parks), its status as Australia's economic capital with diversified employment, strong population growth from migration, and the fact that quality homes in scarce locations always command premiums in global cities.

Sydney's price-to-income ratio of approximately 13.8 times makes it the second most unaffordable housing market in the world according to Demographia, well above Melbourne (around 9 times), Brisbane (around 8 times), and the Australian national average of around 8 times.

What are common buyer mistakes people regret in Sydney right now?

The most frequently cited buyer mistake in Sydney is underestimating strata costs and risks in apartments, where buyers discover after purchase that special levies for cladding remediation, lift replacements, or building defects can add tens of thousands of dollars in unexpected expenses.

The second most common mistake Sydney buyers mention regretting is buying in a "future construction canyon," meaning they purchased a property with good light and views only to find that surrounding sites were rezoned for high-density towers, dramatically reducing their amenity and resale value.

If you want to go deeper, you can check our list of risks and pitfalls people face when buying property in Sydney.

It's because of these mistakes that we have decided to build our pack covering the property buying process in Sydney.

How easy is it for foreigners to buy in Sydney in 2026?

Do foreigners face extra challenges in Sydney right now?

The estimated overall difficulty level foreigners face when buying property in Sydney in 2026 is significantly higher than for local buyers, due to a combination of purchase restrictions, extra taxes, and tighter financing options.

The specific legal restrictions applying to foreign buyers in Sydney include a temporary ban on purchasing established dwellings (from April 2025 to March 2027), a 9% surcharge purchaser duty on top of normal stamp duty, and a 5% annual surcharge land tax on the property's land value, which together can add over 15% to the effective purchase cost.

The practical challenges foreigners most commonly encounter in Sydney include navigating the FIRB (Foreign Investment Review Board) approval process, finding conveyancers experienced with foreign purchaser requirements, understanding the foreign resident capital gains withholding rules at settlement (now 15% with no threshold), and sourcing finance from Australian banks that increasingly limit lending to non-residents.

We will tell you more in our blog article about foreigner property ownership in Sydney.

Do banks lend to foreigners in Sydney in 2026?

As of early 2026, mortgage financing for foreign buyers in Sydney is available but significantly more restricted than for Australian citizens and permanent residents, with fewer lenders offering products and stricter approval criteria.

Foreign buyers in Sydney can typically expect loan-to-value ratios of 60% to 70% (meaning deposits of 30% to 40% required), compared to 80% to 90% LVR for locals, with interest rates often 0.5% to 1% higher than standard owner-occupier rates.

The documentation banks typically demand from foreign applicants in Sydney includes certified proof of income in the source country, employment verification translated into English, evidence of funds for the deposit (with source of funds checks), valid visa documentation, and often a requirement for income to be earned in Australian dollars or a major global currency.

You can also read our latest update about mortgage and interest rates in Australia.

How risky is buying in Sydney compared to other nearby markets?

Is Sydney more volatile than nearby places in 2026?

As of early 2026, Sydney shows higher price volatility than Adelaide and Brisbane (which have had steadier recent growth) but similar volatility to Melbourne, while being less prone to boom-bust cycles than smaller mining-dependent regional markets.

Over the past decade, Sydney has experienced larger price swings than Adelaide, Brisbane, or Perth, with values rising 27% since 2020 but also dropping sharply during the 2022 rate-hike cycle before recovering, while cities like Adelaide have shown more consistent year-on-year growth without dramatic corrections.

If you want to go into more details, we also have a blog article detailing the updated housing prices in Sydney.

Is Sydney resilient during downturns historically?

Sydney's historical resilience during economic downturns is generally strong over the long term, as the city tends to recover relatively quickly due to its diversified economy, high migration inflows, and status as Australia's financial and commercial hub.

During the most recent major downturn (the 2022 interest rate shock), Sydney property prices dropped by around 12% to 15% from peak to trough, with recovery taking approximately 18 to 24 months before values exceeded their previous highs.

The property types and neighborhoods in Sydney that have historically held value best during downturns include family houses in established eastern suburbs (Randwick, Coogee, Maroubra), lower North Shore suburbs near train stations (Neutral Bay, Cremorne), and Inner West suburbs with heritage character (Balmain, Leichhardt), while outer-ring suburbs and investor-heavy apartment towers tend to be more sensitive to downturns.

How strong is rental demand behind the scenes in Sydney in 2026?

Is long-term rental demand growing in Sydney in 2026?

As of early 2026, the growth trend for long-term rental demand in Sydney remains strong, with vacancy rates sitting at approximately 1.4% to 1.8%, well below the 3% level considered a "balanced" market, indicating continued demand pressure on available rentals.

The tenant demographics driving long-term rental demand in Sydney include young professionals (especially those priced out of buying), international students returning to universities like UNSW and UTS, skilled migrants on work visas, and families who need to rent in good school catchments while saving for a deposit.

The neighborhoods in Sydney with the strongest long-term rental demand right now include Ultimo and Haymarket (near UTS), Kensington and Kingsford (near UNSW), Macquarie Park (near Macquarie University), and inner suburbs like Surry Hills and Newtown, where properties often lease within 7 to 14 days.

You might want to check our latest analysis about rental yields in Sydney.

Is short-term rental demand growing in Sydney in 2026?

The regulatory changes currently affecting short-term rental operations in Sydney include NSW's mandatory STRA (Short-Term Rental Accommodation) code of conduct, a statewide registration requirement, and individual strata building by-laws that can restrict or ban short-term letting, meaning investors must verify compliance before assuming Airbnb income is possible.

As of early 2026, the growth trend for short-term rental demand in Sydney is positive but moderating, as the city remains a major international tourism destination and business hub, though regulatory tightening and strata restrictions have limited supply growth in popular areas.

The current estimated average occupancy rate for short-term rentals in Sydney sits at around 65% to 75% in well-located properties, though this varies significantly by suburb, with beach areas and CBD-adjacent locations performing best.

The guest demographics driving short-term rental demand in Sydney include international tourists (especially from Asia, Europe, and the US), domestic leisure travelers, business visitors attending conferences and corporate events, and a growing segment of digital nomads staying for medium-term periods of one to three months.

By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Sydney.

What are the realistic short-term and long-term projections for Sydney in 2026?

What's the 12-month outlook for demand in Sydney in 2026?

As of early 2026, the estimated 12-month demand outlook for residential property in Sydney is moderately positive, with most analysts expecting continued buyer interest supported by stable interest rates, expanded first-home buyer schemes, and ongoing supply shortages.

The key economic factors most likely to influence Sydney demand over the next 12 months include Reserve Bank of Australia interest rate decisions (with potential for one or two cuts), federal and state government housing incentives (including the expanded 5% deposit scheme), and migration levels, which remain strong despite recent policy tightening.

The forecasted price movement for Sydney over the next 12 months is an increase of approximately 5% to 7% for houses and 4% to 6% for units, though growth is expected to be stronger in the first half of the year before affordability constraints slow momentum in the second half.

By the way, we also have an update regarding price forecasts in Australia.

What's the 3 to 5 year outlook for housing in Sydney in 2026?

As of early 2026, the estimated 3 to 5 year outlook for Sydney housing prices and demand is structurally positive but uneven, with growth likely to be "lumpier" and more suburb-dependent as infrastructure projects reshape which areas become most desirable.

The major development projects expected to shape Sydney over the next 3 to 5 years include the completion of Sydney Metro West (connecting Parramatta to the CBD by 2032), Western Sydney International Airport (opening in 2026), continued urban renewal at The Bays and Blackwattle Bay precincts, and rezoning along Metro corridors that will add tens of thousands of new homes.

The single biggest uncertainty that could alter Sydney's 3 to 5 year outlook is inflation and interest rate trajectory, because even a modest return to rate hikes would significantly reduce borrowing capacity in a high-price market, while faster-than-expected cuts could reignite price growth beyond affordability limits.

Are demographics or other trends pushing prices up in Sydney in 2026?

As of early 2026, the estimated impact of demographic trends on Sydney housing prices is strongly positive, as population growth, household formation patterns, and migration continue to create more demand than the construction industry can supply.

The specific demographic shifts most affecting Sydney prices include net overseas migration (adding around 100,000 people annually to Greater Sydney), delayed household formation among young adults (who eventually need to move out), an aging population downsizing from large homes into well-located units, and the return of international students to pre-pandemic levels.

The non-demographic trends also pushing Sydney prices include the normalization of hybrid work (which has increased demand for homes with dedicated office space), lifestyle preferences shifting toward properties with outdoor areas and proximity to parks, and continued investor appetite from both domestic and international buyers seeking stability in a global city.

These demographic and trend-driven price pressures in Sydney are expected to continue for at least the next 5 to 10 years, as the underlying housing shortage (estimated at 200,000 to 300,000 dwellings nationally) will take many years to resolve even with accelerated construction.

What scenario would cause a downturn in Sydney in 2026?

As of early 2026, the estimated most likely scenario that could trigger a housing downturn in Sydney would be a combination of unexpectedly high inflation forcing the RBA to raise interest rates again, which would sharply reduce borrowing capacity and buyer confidence in a market where prices already stretch household budgets.

The early warning signs that would indicate such a downturn is beginning in Sydney include auction clearance rates falling below 55% for several consecutive months, days-on-market increasing beyond 50 days, rising mortgage arrears in outer-ring suburbs, and a notable increase in distressed listings (urgent sales, mortgagee-in-possession properties).

Based on historical patterns, a potential Sydney downturn could realistically see prices decline by 10% to 15% from peak to trough (similar to the 2022 correction), with recovery likely within 18 to 24 months given the city's structural demand drivers, though a more severe shock could see larger falls that take longer to recover.

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.