Sydney Property Market – Prices, Trends, Forecast [May 2025]

Sydney’s housing market demonstrated mild resilience in April 2025 amid broader national economic and political uncertainty. Dwelling values in the city ticked up by 0.2% for the month, part of a 1.0% rise over the rolling quarter. While positive, this movement was slower than other capitals like Darwin and Perth, reflecting Sydney’s already high baseline and unique challenges.

The median dwelling value in Sydney now sits at $1,194,709, placing it firmly at the top among Australian capitals in terms of absolute pricing.

Sydney Property Price Growth

Sydney’s housing values remain 1.1% below their peak, which occurred in September 2024. Over the past 12 months, Sydney homes have gained just 0.9% in value, signaling modest recovery following recent stagnation and declines earlier in the cycle.

• Houses: Values grew 0.4% in April and 1.4% over the past three months. Annual growth stands at 1.3%.
• Units: In contrast, unit values fell -0.4% in April and are down -0.3% over the quarter, with a -0.3% annual decline.

This divergence continues a broader trend where detached houses outperform attached dwellings, likely driven by shifting preferences and land scarcity.

CoreLogic Home Value Index

CoreLogic Home Value Index, Released on 1st May 2025

Sydney Property Market Trends

• Supply & Demand: Sydney, like other cities, saw lower auction and new listing volumes in April, attributed partly to the Easter–ANZAC holiday ‘super break’ and looming federal election. Despite reduced activity, prices have held steady or slightly increased.
• Rentals: Rental growth has sharply slowed. Sydney’s annual rental rise is just 1.9%, the slowest since April 2021. Gross rental yields remain tight at 3.1%, reflecting the city’s relatively low rental return environment compared to more affordable markets.
• Top-performing areas: Some outer and western suburbs showed notable growth over the past year:
  • Fairfield: +7.4%
  • St Marys & Wollondilly: +7.3%
  • Bankstown: +6.5%
  • Mount Druitt & Camden: +6.4%
• These pockets are outperforming the broader metro trend, often due to relative affordability and migration from inner-city areas.

Change in dwelling values over key time periods

Sydney Property Market Forecast

Looking ahead, Sydney’s housing market is expected to continue on a moderate upward trajectory, contingent on several factors:

• Interest rates: Further rate cuts are likely in May, which should stimulate buyer demand. Historically, Sydney’s upper quartile has been most responsive to rate cuts, potentially driving higher-value segments upward.
• First home buyer stimulus: Expected policy changes—such as deposit guarantees or superannuation access—could inject new demand into the entry-level market.
• Supply constraints: With new dwelling commencements down 16.5% below the decade average and construction costs still rising, ongoing undersupply is likely to prop up values.

However, stretched affordability (loan serviceability at record highs and median households needing 10.6 years to save a 20% deposit) and flat population growth could temper any exuberant gains.

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.

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Conclusion for Homeowners

Sydney’s housing market remains in a fragile but stable position. After dipping from its September 2024 peak, values have begun to inch upward again, thanks to macroeconomic shifts and policy expectations. While overall growth is modest, certain outer-ring suburbs are posting strong double-digit gains, revealing a market increasingly driven by affordability.

The path forward hinges on interest rate movements, fiscal policy, and supply dynamics. For now, Sydney remains Australia’s most expensive housing market, but one showing measured signs of recovery.

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