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

Sydney’s housing market rebounded in February 2025, recording a 0.3% monthly increase in home values. This shift marks a turnaround from the minor downturn of previous months, largely driven by higher-end properties regaining value. Improved buyer sentiment—influenced by expectations of interest rate cuts—has played a key role in boosting market conditions.

Sydney Property Price Growth

While Sydney’s annual home value growth sits at 1.1%, the market has yet to fully recover, as values remain 1.6% below their September 2024 peak. The median dwelling price now stands at $1,186,459, making Sydney the most expensive city in Australia. Gross rental yields have increased slightly to 3.1%, though affordability constraints continue to limit rapid price acceleration.

CoreLogic Home Value Index

CoreLogic Home Value Index, Released on 3rd March 2025

Sydney Property Market Trends

• Premium homes in Sydney are leading the recovery, with upper-quartile properties experiencing the strongest price gains.
• Auction clearance rates have returned to long-term average levels, reflecting renewed confidence.
• New property listings are down by 4.7% compared to last year, potentially adding upward pressure on prices as supply remains tight.

Change in dwelling values over key time periods

Sydney Property Market Forecast

The Sydney market is expected to see gradual growth, particularly in premium suburbs, as borrowing conditions ease with anticipated interest rate reductions. However, high serviceability constraints and slowing population growth may temper demand. Additionally, Sydney’s housing inventory remains 6.9% above the five-year average, suggesting a more balanced market where buyers retain negotiation power.

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 property market is on a recovery path, with higher-end properties benefitting the most. Price growth is expected to remain moderate, driven by improving sentiment, interest rate adjustments, and constrained new listings. However, affordability challenges and higher inventory levels suggest that the market will not return to rapid appreciation in the short term.

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