Sydney Property Market – Prices, Trends, Forecast [February 2026]

Sydney’s housing market has entered 2026 with steady momentum, supported by tight supply and resilient demand, even as affordability remains stretched. Values have edged higher after a brief late-2025 soft patch, signalling that buyers are still active, but more selective on price and property quality.

At the same time, Sydney’s scale and diversity mean conditions vary widely between premium, mid-market, and entry-level areas. With borrowing constraints still front of mind, activity is increasingly concentrated where buyers can still find relative value, including well-located apartments and family housing in established, more affordable pockets.

Highlights

• Sydney values rose 0.2% in January, indicating a modest rebound after a soft end to 2025.
• Annual value growth sits at 6.4%, with the median dwelling value around $1.29 million.
• The market remains just 0.1% below its late-2025 peak, signalling stabilisation rather than a pullback.
• Five-year growth is 35.0%, showing strong longer-cycle gains despite higher rates.
• Houses have outperformed units over the past year (7.6% vs 3.3%), reflecting scarcity of detached homes.

See how Sydney’s property values have performed across houses and units over various timeframes, along with returns, yields, and median prices.

Watch CoreLogic’s December 2025 Housing Market Update for expert commentary on national and capital city housing trends, price movements, and key market drivers across Sydney.

Sydney Property Price Growth

Sydney dwelling values rose modestly over the latest month, reinforcing a slow-but-positive growth profile rather than a sharp upswing. Over the past year, values have increased by 6.4%, placing Sydney in solid territory, though behind the faster-growing mid-sized capitals.

The market remains very close to its recent high, sitting only fractionally below the previous peak. That pattern suggests price growth is being capped more by serviceability than by a lack of demand, with many households simply reaching their borrowing limit.

Sydney’s price base remains the highest among the capitals, with a median dwelling value of $1.29m. That starting point magnifies affordability pressure and encourages a more negotiated market, where well-presented, correctly priced homes still attract competition, but over-ambitious pricing is less likely to be rewarded.

Sydney Property Market Trends

Low listings continue to shape Sydney’s market, limiting buyer choice and helping to underpin values despite cost-of-living pressures. Even where demand cools at the margin, constrained stock can keep prices stable, particularly in family-friendly suburbs with scarce detached housing supply.

Within the market, value growth has been strongest where affordability is most compelling. This typically favours lower price points and “best-value” segments, where first-home buyers, investors, and budget-conscious upgraders overlap. In Sydney, that dynamic can lift competition in outer and middle-ring locations, as well as in the unit market where the entry price is lower.

On the investment side, rental conditions remain supportive, even as yields have been pressured by faster home value growth over recent years. Many investors appear focused on medium-term capital gains and stable tenant demand, rather than purely chasing yield.

The table outlines CoreLogic’s Home Value Index as of 2nd February 2026, showing peak declines, five-year growth, and changes since the first rate cut in February.

Sydney Property Market Forecast

Sydney is likely to record slower, more uneven growth through 2026 as affordability constraints bite harder and borrowing costs remain a key swing factor. If interest rates rise or expectations for higher rates firm, buyer confidence and purchasing power could soften further, particularly in premium segments.

That said, a material downturn still looks unlikely without a sharper deterioration in jobs, credit availability, or broader economic conditions. Persistently limited supply, elevated construction costs, and cautious new dwelling delivery should keep a floor under prices, even if transaction volumes fluctuate.

The most plausible path is a market that continues to rise in patches rather than in a broad surge. Well-located, competitively priced homes should remain the most liquid, while higher-end stock may take longer to sell and require more realistic vendor expectations.

The Reserve Bank of Australia’s ongoing adjustments to interest rates will likely play a crucial role in shaping market dynamics, as higher borrowing costs limit purchasing power for many buyers.

Here are some of the most recent forecasts by the big-4 banks in Australia:

• ANZ predicts a 5-6% increase in capital city property prices in 2024, with Brisbane expected to see the highest rise at 9-10%, Perth property values could go up by 1-11%, Sydney by 4-5%, and Melbourne prices by 2-3%.
• CBA forecasts a 5% rise in capital city prices, with some variations: Brisbane is anticipated to grow by 6%, Melbourne and Perth by 5%, Sydney by 4%, and Adelaide by 1%.
• NAB projects a 5.4% average increase across the capitals, with Brisbane expected to see a 6.5% rise, Perth and Adelaide by 6.2%, Melbourne by 5.5%, Sydney by 5%, and Hobart remaining flat.
• Westpac expects a 6% growth across the combined capitals, with Perth leading at 10%, followed by Brisbane at 8%, Sydney at 6%, Adelaide at 4%, and Melbourne at 3%

Oxford Economics recently released property forecasts predicting where house prices will be in three years.

Conclusion

Sydney’s market is holding up, with price gains continuing despite pronounced affordability pressure. Values are rising, but the pace is restrained, reflecting a market that is resilient rather than exuberant.

Looking ahead, supply constraints should remain a stabilising force, while demand is likely to be tempered by serviceability limits and rate uncertainty. Overall, Sydney appears set for measured growth, with outcomes increasingly determined by pricing discipline, location quality, and buyer budgets.