Executive Summary
Sydney’s housing market has launched into 2026 with renewed momentum. According to the latest CoreLogic/Cotality Home Value Index (HVI), Sydney home values rose +0.5% in January, marking the third consecutive month of growth and pushing annual gains to a robust +7.6%. With the cash rate holding steady at 4.35% and expectations of cuts later this year, buyer confidence is quietly building, particularly in prestige and lifestyle markets.
Sydney’s Resilience: Value Growth Amid Volatility
Sydney’s +0.5% uplift in January continues a three-month positive streak, following a seasonal pause over the December holiday period. Cumulatively, dwelling values across Sydney are now up +7.6% over the past 12 months, outperforming most capital cities apart from Perth and Brisbane.
Notably, Sydney’s upper quartile, the top 25% of dwelling values, has been leading the charge, reflecting the resilience of high-end suburbs such as Bellevue Hill, Vaucluse, and Rose Bay. As premium buyers remain relatively insulated from borrowing constraints, this cohort continues to drive price momentum in blue-chip postcodes.
Market Dynamics: Stock Shortage Supporting Prices
While demand is gradually rebuilding, one of the most defining features of Sydney’s current market is constrained supply. Total listings remain -16.6% below the five-year average, with new listings down -7.7% year-on-year. This stock drought is particularly acute in the Eastern Suburbs and Lower North Shore, where tightly held prestige homes rarely come to market.
In this environment, even modest demand rebounds are exerting upward pressure on prices, especially when paired with vendor hesitation and the seasonal lag in new listings over summer.
Buyer Sentiment: Stability Returning, Eyes on the RBA
While the market remains cautiously optimistic about the potential for interest rate cuts later in 2026, it’s important to acknowledge that the current economic data does not yet strongly support this trajectory. In fact, ongoing inflationary pressures and a resilient labour market suggest that the RBA may continue to adopt a wait-and-see approach, with some economists even noting the possibility of a further hike if inflation proves stickier than expected. Accordingly, buyer sentiment and borrowing capacity remain sensitive to evolving macroeconomic signals.
High-End Opportunities: Our Take
At Rose & Jones, we see selective buying opportunities emerging across tightly held premium suburbs. While broad-based growth may slow, the scarcity of top-tier assets will continue to support capital preservation and upside, long-term.
Look to:
- Woollahra, Elizabeth Bay, and Bellevue Hill for prestige downsizer appeal
- Mosman and Cremorne for generational family homes
- Potts Point and Darlinghurst for boutique apartment yields and gentrification upside
Final Word
Sydney’s property market has turned a corner. The fundamentals low supply, robust household balance sheets, and sustained high demand for quality assets, remain supportive. While 2026 may not deliver runaway growth, we expect moderate gains in blue-chip locations, with savvy buyers well placed to act before the next interest rate pivot.
If you’re considering your next move, now is the time to engage.
Byron Rose
Partner, Rose & Jones
www.roseandjones.com.au
