What are the best areas for real estate 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

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's the Current Real Estate Market Situation by Area in Sydney?

Which areas in Sydney have the highest property prices per square meter in 2026?

As of early 2026, the three most expensive areas in Sydney by land value per square meter are Paddington, Point Piper, and Tamarama, where inner-city terrace houses and harbourside properties command extreme premiums.

In these prestige pockets of Sydney, you can expect to pay between A$22,000 and A$32,000 per square meter of land, with exceptional properties sometimes exceeding this range.

What drives these astronomical prices in Sydney varies by location, but each area has its own scarcity story:

• Paddington (2021): Heritage-listed Victorian terraces on tiny lots create fierce competition among buyers.
• Point Piper (2027): Direct harbour frontage with virtually no new supply makes turnover extremely rare.
• Tamarama (2024): A micro-suburb of fewer than 100 houses squeezed between cliffs and beach.
• Double Bay (2028): Walkable village atmosphere combined with harbour views attracts wealthy downsizers.

Which areas in Sydney have the most affordable property prices in 2026?

As of early 2026, the most affordable areas for property buyers in Sydney include Auburn (2144), Granville (2142), Lakemba (2195), and Mount Druitt (2770), where unit prices remain accessible for budget-conscious investors.

In these western and southwestern Sydney suburbs, a two-bedroom unit typically costs between A$400,000 and A$550,000, which translates to roughly A$5,000 to A$7,000 per square meter of internal space.

However, the trade-offs differ by area: Auburn and Granville offer decent train access but older building stock, Lakemba has strong rental demand but limited capital growth history, and Mount Druitt provides the lowest entry prices but sits over 40 kilometers from the CBD with longer commute times.

You can also read our latest analysis regarding housing prices in Sydney.

We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Australia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.

Which Areas in Sydney Offer the Best Rental Yields?

Which neighborhoods in Sydney have the highest gross rental yields in 2026?

As of early 2026, the Sydney neighborhoods delivering the highest gross rental yields are Auburn (around 6.6% for two-bedroom units), Granville (approximately 6.2%), and Merrylands (close to 5.8%), all located in Sydney's western corridor.

Across Sydney as a whole, gross rental yields for apartments typically range from 3% in prestige eastern suburbs to 6.5% in more affordable western areas, while houses generally yield between 1.5% and 3.5%.

These higher-yielding neighborhoods outperform because of specific local factors:

• Auburn (2144): Large migrant and student population creates constant tenant demand near transport hubs.
• Granville (2142): Lower purchase prices combined with steady rents from hospital and university workers.
• Merrylands (2160): Family-oriented suburb with schools and shopping keeping occupancy rates high.
• Parramatta (2150): Second CBD status draws corporate tenants willing to pay premium rents.

Keep in mind that foreign buyers face additional surcharges in NSW, including surcharge purchaser duty and annual surcharge land tax, which can reduce your net yield by 1% to 2% depending on the property value.

Finally, please note that we cover the rental yields in Sydney here.

Which Areas in Sydney Are Best for Short-Term Vacation Rentals?

Which neighborhoods in Sydney perform best on Airbnb in 2026?

As of early 2026, the Sydney neighborhoods that perform best on Airbnb are The Rocks (2000), Surry Hills (2010), Bondi Beach (2026), and Manly (2095), where occupancy rates hover around 50% to 65% and average nightly rates range from A$200 to A$350.

Top-performing Airbnb properties in these Sydney neighborhoods typically generate between A$2,500 and A$4,500 per month in gross revenue, though this varies significantly by season, property quality, and exact location within each suburb.

Each neighborhood attracts short-term guests for different reasons:

• The Rocks (2000): Walking distance to Sydney Opera House and Harbour Bridge draws international tourists.
• Surry Hills (2010): Trendy restaurants and nightlife appeal to younger travelers wanting local experiences.
• Bondi Beach (2026): Iconic beach location guarantees year-round demand from backpackers and families.
• Manly (2095): Ferry ride from the CBD creates a resort-like atmosphere with premium nightly rates.

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

Which tourist areas in Sydney are becoming oversaturated with short-term rentals?

The Sydney tourist areas showing signs of Airbnb oversaturation are the CBD and Haymarket area (2000), parts of Bondi Beach (2026), and Coogee (2034), where listing density has grown faster than tourist demand.

In these oversaturated Sydney pockets, you can find over 500 active short-term rental listings within a single postcode, meaning hosts must compete aggressively on price or property features to maintain bookings.

The clearest warning sign of oversaturation in these Sydney areas is declining average occupancy despite stable tourism numbers, which suggests the market has too many listings chasing the same pool of guests.

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 Areas in Sydney Are Best for Long-Term Rentals?

Which neighborhoods in Sydney have the strongest demand for long-term tenants?

The Sydney neighborhoods with the strongest long-term rental demand are Surry Hills (2010), Parramatta (2150), Zetland (2017), and Redfern (2016), where landlords consistently report high tenant interest and fast leasing times.

In these high-demand Sydney suburbs, vacancy rates typically sit below 2% and well-priced properties lease within one to two weeks, compared to three to four weeks in less popular areas.

The tenant profiles driving demand vary by neighborhood:

• Surry Hills (2010): Young professionals in creative industries wanting walkable CBD access.
• Parramatta (2150): Corporate workers, hospital staff, and university students near Western Sydney University.
• Zetland (2017): Couples and sharers attracted to newer apartments and Green Square amenities.
• Redfern (2016): Tech workers and university staff valuing proximity to Sydney's innovation corridor.

What makes these Sydney neighborhoods particularly sticky for tenants is the combination of transport links, local employment, and lifestyle amenities, meaning tenants renew leases rather than moving elsewhere.

Finally, please note that we provide a very granular rental analysis in our property pack about Sydney.

What are the average long-term monthly rents by neighborhood in Sydney in 2026?

As of early 2026, monthly rents in Sydney vary dramatically by neighborhood, from around A$2,600 per month for a two-bedroom unit in Auburn to over A$5,000 per month in Zetland's newer apartment complexes.

For entry-level apartments in Sydney's most affordable rental suburbs like Granville, Merrylands, and Lakemba, tenants typically pay between A$2,200 and A$2,800 per month for a two-bedroom unit.

In mid-range Sydney neighborhoods such as Parramatta and Burwood, two-bedroom apartments generally rent for A$2,800 to A$3,500 per month, reflecting better transport access and local amenities.

At the top end, premium Sydney suburbs like Surry Hills, Bondi Beach, and the CBD fringe command A$3,500 to A$5,500 per month for equivalent apartments, driven by lifestyle appeal and proximity to major employment hubs.

You may want to check our latest analysis about the rents in Sydney here.

Which Are the Up-and-Coming Areas to Invest in Sydney?

Which neighborhoods in Sydney are gentrifying and attracting new investors in 2026?

As of early 2026, the Sydney neighborhoods showing the clearest signs of gentrification and investor interest are Marrickville (2204), Dulwich Hill (2203), St Peters (2044), and Sydenham (2044), where cafes, breweries, and creative businesses have transformed formerly industrial streets.

These gentrifying Sydney suburbs have experienced annual price appreciation of roughly 5% to 8% over the past few years, outpacing the broader Sydney market as younger buyers and investors compete for character properties.

Which areas in Sydney have major infrastructure projects planned that will boost prices?

The Sydney areas most likely to see infrastructure-driven price growth are those along the Sydney Metro West corridor, including Westmead, Sydney Olympic Park, Five Dock, and Pyrmont, plus the Metro City and Southwest line suburbs like Campsie, Lakemba, and Bankstown.

Specific projects transforming these areas include the Sydney Metro West line connecting Parramatta to the CBD (expected to open progressively from 2030), the Metro City and Southwest conversion currently in testing, and the Westmead Health Precinct expansion creating thousands of new jobs.

Historically, Sydney suburbs that gain new metro stations have seen price increases of 10% to 20% above the citywide average in the five years following station announcements, though timing is uncertain and construction disruption can temporarily suppress values.

You'll find our latest property market analysis about Sydney here.

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 Areas in Sydney Should I Avoid as a Property Investor?

Which neighborhoods in Sydney with lots of problems I should avoid and why?

The Sydney neighborhoods that require extra caution from property investors include parts of Haymarket (2000), certain towers in Mascot (2020), and some high-rise pockets in Wolli Creek (2205), where building defects, oversupply, or strata issues have created headaches for owners.

Each problem area in Sydney has its own specific risks:

• Haymarket (2000): Investor-dominated towers with high strata fees and short-term rental restrictions.
• Mascot (2020): Building defect scandals have hurt resale values and buyer confidence in some complexes.
• Wolli Creek (2205): Oversupply of similar apartments means fierce competition when selling or leasing.
• Parts of Waterloo (2017): Major public housing renewal creates uncertainty about future neighborhood character.

For these Sydney areas to become viable investments, you would need to see building defect remediation completed, strata management improved, and supply growth slowing to let demand catch up with available stock.

Buying a property in the wrong neighborhood is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Sydney.

Which areas in Sydney have stagnant or declining property prices as of 2026?

As of early 2026, the Sydney areas showing price stagnation or softness include investor-heavy unit markets in parts of Parramatta (2150), Olympic Park (2127), and some CBD-fringe towers, where oversupply and rising interest rates have cooled buyer appetite.

In these underperforming Sydney pockets, prices for certain unit types have either flatlined or declined by 2% to 5% over the past 12 months, even while other segments of the market continued growing.

The underlying causes of weakness differ by area:

• Parramatta three-bedroom units: Oversupply of large apartments exceeds family buyer demand in this location.
• Olympic Park (2127): Event-dependent foot traffic and limited daily amenities deter long-term tenants.
• CBD investment units: Short-term rental crackdowns have reduced income potential for small apartments.

Which Areas in Sydney Have the Best Long-Term Appreciation Potential?

Which areas in Sydney have historically appreciated the most recently?

The Sydney areas that have delivered the strongest appreciation over the past five to ten years include inner-east terrace suburbs like Paddington (2021) and Darlinghurst (2010), beach micro-suburbs such as Bronte (2024), and lower north shore family areas like Mosman (2088).

These top-performing Sydney locations have achieved impressive growth:

• Paddington (2021): Around 60% to 80% total appreciation over ten years for heritage terraces.
• Bronte (2024): Approximately 70% growth driven by beachside scarcity and family buyer demand.
• Mosman (2088): Roughly 50% to 65% appreciation for houses near the harbour and ferry access.
• Surry Hills (2010): About 55% to 70% growth as gentrification matured into premium status.

The main driver behind this outperformance in Sydney is land scarcity combined with high-income buyer pools: these areas simply cannot add meaningful new supply, so demand growth translates directly into price increases.

By the way, you will find much more detailed trends and forecasts in our pack covering there is to know about buying a property in Sydney.

Which neighborhoods in Sydney are expected to see price growth in coming years?

The Sydney neighborhoods expected to deliver above-average price growth in the coming years are Burwood (2134), Five Dock (2046), Westmead (2145), and Campsie (2194), all benefiting from major transport upgrades and employment growth.

Projected growth varies by neighborhood based on their specific catalysts:

• Burwood (2134): Expected 5% to 8% annual growth as Metro West station transforms accessibility.
• Five Dock (2046): Projected 6% to 9% annually once Metro West brings direct CBD connections.
• Westmead (2145): Anticipated 5% to 7% growth driven by health precinct expansion and metro access.
• Campsie (2194): Forecast 4% to 7% appreciation as Metro City and Southwest line completes.

The single most important catalyst for these Sydney neighborhoods is the Sydney Metro network, which will dramatically reduce commute times and make these areas viable alternatives to more expensive inner-city locations.

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 Do Locals and Expats Really Think About Different Areas in Sydney?

Which areas in Sydney do local residents consider the most desirable to live?

The Sydney areas that local residents consistently rank as most desirable include the eastern suburbs beach corridor from Bondi to Coogee, inner-east heritage neighborhoods like Paddington and Woollahra, and lower north shore family suburbs such as Neutral Bay and Cremorne.

Each area attracts locals for specific qualities:

• Bondi Beach (2026): Iconic beach lifestyle combined with village atmosphere and cafe culture.
• Paddington (2021): Tree-lined streets, heritage architecture, and boutique shopping without high-rise density.
• Neutral Bay (2089): Family-friendly streets with harbor access and excellent public schools nearby.
• Balmain (2041): Peninsula village feel with water views, historic pubs, and ferry commuting options.

These locally-preferred Sydney areas typically attract established professionals, young families with dual incomes, and downsizers with significant equity from previous property sales.

Local preferences in Sydney largely align with foreign investor interest in prestige areas, but locals often value school catchments and community feel more than pure rental yield or capital growth potential.

Which neighborhoods in Sydney have the best reputation among expat communities?

The Sydney neighborhoods most popular with expat communities are Surry Hills (2010), Potts Point (2011), Bondi Beach (2026), and Pyrmont (2009), where international residents appreciate walkability, nightlife, and proximity to central employment.

Expats gravitate to these Sydney neighborhoods for practical reasons:

• Surry Hills (2010): Restaurants, bars, and cultural venues within walking distance of CBD offices.
• Potts Point (2011): Apartment living with harbor glimpses and easy access to Kings Cross station.
• Bondi Beach (2026): Beach lifestyle that matches expectations formed by Australian tourism marketing.
• Pyrmont (2009): Modern apartments near Darling Harbour with light rail to the CBD.

The typical expat profile in these Sydney neighborhoods includes young professionals on corporate transfers, digital workers from Europe and North America, and international students who later transition to working visas.

Which areas in Sydney do locals say are overhyped by foreign buyers?

The Sydney areas that locals commonly describe as overhyped by foreign buyers are CBD investment apartments (2000), parts of Chatswood (2067), and some newer towers in Rhodes (2138), where marketing to offshore investors has driven prices above local value perceptions.

Locals believe these areas are overvalued for specific reasons:

• CBD apartments (2000): High strata fees and short-term rental restrictions reduce actual returns.
• Chatswood (2067): Developer marketing overstates lifestyle appeal compared to actual street-level experience.
• Rhodes (2138): Isolated peninsula location lacks the walkable amenities that justify premium pricing.

Foreign buyers typically see these Sydney areas as "safe" investments with strong Asian community presence and brand-name developers, while locals prioritize street character, established trees, and neighborhood authenticity over new building amenities.

By the way, we've written a blog article detailing the experience of buying a property as a foreigner in Sydney.

Which areas in Sydney are considered boring or undesirable by residents?

The Sydney areas that residents commonly describe as boring or undesirable include car-dependent outer suburbs like Kellyville (2155), some industrial-adjacent pockets near Bankstown Airport (2200), and uniform housing estates in parts of the Hills District.

Residents find these areas less appealing for understandable reasons:

• Kellyville (2155): Limited public transport until recently and repetitive housing stock lacking character.
• Near Bankstown Airport: Aircraft noise and industrial neighbors reduce residential appeal.
• Generic Hills District estates: Identical houses on curved streets with few walkable destinations.
• Some Campbelltown suburbs (2560): Long CBD commutes and fewer employment options locally.

However, for yield-focused investors, "boring" can actually mean stable tenancies and less competition from lifestyle buyers, so these areas deserve analysis rather than automatic dismissal.

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 We Trust It	How We Used It
Australian Bureau of Statistics (ABS)	Australia's official statistics agency with transparent methods and public releases.	We used ABS data to anchor Sydney's overall market cycle and validate citywide price trends. We treat their indexes as the most reliable baseline for broad market direction.
Reserve Bank of Australia (RBA)	Australia's central bank publishes core housing and credit indicators.	We used RBA data to explain macro forces like interest rates and credit conditions affecting Sydney buyers. We rely on their charts to avoid speculation about market tightening or loosening.
Cotality (formerly CoreLogic)	The most widely cited housing index provider in Australia, used by banks and media.	We used Cotality to track price momentum into early 2026 and verify Sydney's direction. We treat their index as a high-quality trend barometer rather than absolute suburb truth.
realestate.com.au	Australia's largest property portal with comprehensive suburb-level data.	We used their suburb profiles to extract median prices, rents, yields, and leasing volumes. We cross-referenced multiple suburbs to ensure consistency in our comparisons.
SQM Research	Long-running Australian housing research company with consistent historical series.	We used SQM vacancy rates to measure rental market tightness across Sydney. We also used their postcode yield data to compare gross returns between areas.
Revenue NSW	NSW's official tax authority with definitive surcharge and duty information.	We used Revenue NSW to quantify foreign buyer transaction costs and ongoing surcharges. We included these in yield calculations to show realistic net returns.
Australian Taxation Office (ATO)	The official source for foreign investment rules and application processes.	We used ATO guidance to explain what foreign buyers can and cannot purchase in early 2026. We treat their policy pages as the definitive constraint before any suburb discussion.
Inside Airbnb	Independent research dataset used by academics and journalists with downloadable files.	We used Inside Airbnb to map short-term rental density and identify oversaturation risk. We cross-checked their data against paid market analytics to validate patterns.
NSW Bureau of Crime Statistics (BOCSAR)	NSW's official crime statistics body with public dashboards by location.	We used BOCSAR data to replace subjective safety impressions with measurable crime proxies. We flagged areas where incident patterns might concern investors.
Domain	Major Australian property marketplace with recurring research and clear reporting.	We used Domain rental reports to frame Sydney rental conditions and cross-check rent estimates. We also referenced their land value per square meter comparisons for premium areas.