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

Sydney’s property market has shifted into a softer phase, with values easing after the previous peak while still holding a solid annual gain. The market remains expensive by national standards, but buyer urgency has reduced as affordability, borrowing capacity and rising listings weigh on demand. This creates a more measured selling environment, where pricing strategy and property presentation are becoming increasingly important.

Key Takeaways

• Sydney dwelling values fell 0.6% over the month and 0.9% over the quarter, showing clear short-term softness.
• Despite the recent pullback, values are still 4.2% higher over the year, with the median dwelling value at $1,292,157.
• Houses are under more pressure than units, with house values down 1.4% over the quarter compared with unit values up 0.3%.
• Sydney home values are now around 1.0% below their November peak, signalling a mild correction rather than a sharp downturn.
• Advertised stock has lifted above typical levels, giving buyers more choice and reducing urgency.
• Lower-priced parts of the market are holding up better than premium segments, supported by price-sensitive demand and first-home buyer activity.

Watch Cotality’s April 2026 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’s short-term price momentum has weakened, with dwelling values declining 0.6% in April and 0.9% over the quarter. Even so, the annual result remains positive at 4.2%, supported by earlier gains across the cycle, while the median dwelling value sits at $1,292,157.

The split between houses and units is important. House values fell 0.7% over the month and 1.4% over the quarter, while units were more resilient, down just 0.4% for the month and up 0.3% over the quarter. Over the year, houses rose 4.4% and units rose 3.4%, but the recent data suggests affordability pressures are weighing more heavily on detached homes.

Sydney Property Market Trends

A more cautious tone is now evident across the market. Buyer demand has slowed, auction clearance rates have been sitting below stronger market levels, and advertised stock in Sydney is running above the five-year average, giving purchasers more leverage than they had during the stronger phase of the cycle.

Conditions are also becoming more segmented. Growth is stronger in lower-priced parts of the market, while the most expensive homes are under greater pressure. Lower-tier Sydney house values have risen year-to-date, while the upper quartile has fallen, showing that affordability and borrowing limits are shaping buyer behaviour.

The table shows how housing values are performing across different markets.

Sydney Property Market Forecast

Looking ahead, the most likely direction is further loss of momentum rather than a severe correction. Sydney is already below its recent peak, and the combination of weaker sentiment, tighter serviceability, high prices and rising stock levels is likely to keep pressure on values in the near term.

That said, the downside should be partly cushioned by tight labour market conditions, ongoing housing supply constraints and continued demand for more affordable properties. Sellers should expect a more selective market, where well-priced homes in accessible price brackets are likely to attract stronger interest than premium properties that rely on discretionary buyers.

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 property market is no longer running at the pace seen earlier in the cycle, but it remains far from distressed. Values are easing in the short term while annual growth remains positive, creating a more balanced environment between buyers and sellers. The key influences are affordability, borrowing capacity, stock levels and the widening performance gap between lower-priced and higher-priced homes.