Overview of Market Trends
The Sydney property market continues to demonstrate its resilience in the face of economic and political uncertainty, underpinned by the city’s enduring global appeal, limited housing supply, and a premium buyer base that is less rate-sensitive than broader market cohorts.
Modest Price Recovery
In April 2025, Sydney dwelling values rose by a modest 0.2%, lifting quarterly growth to 1.0% and annual growth to 0.9%, with prices now just 1.1% below their September 2024 peak. Despite broader economic uncertainty and seasonal slowdowns, this stabilisation highlights the strength of underlying demand, particularly in prestige markets. The median dwelling value now sits at $1,194,709, cementing Sydney’s position as Australia’s most expensive capital city. Detached house values rose 1.4% over the quarter, while unit values fell by 0.3%, underscoring the continued dominance of blue-chip freestanding homes among premium buyers.
Prestige & Aspirational Suburbs Outperforming
Outer South-West and Western Sydney suburbs like Fairfield, Wollondilly, and St Marys are leading annual growth, each recording gains over 7% thanks to infrastructure investment, strong migration demand, and relative affordability. At the same time, prestige markets in the eastern suburbs and lower north shore remain tightly held, with well-renovated homes attracting strong competition and selling above guide as high-net-worth buyers continue to drive activity in these blue-chip areas.
Rental Market: Demand High, Growth Easing
Sydney’s rental market remains undersupplied, but annual rental growth has cooled dramatically, down to 1.9%, the slowest since April 2021. Gross yields for dwellings in Sydney currently sit at 3.1%, with houses yielding 2.7% and units at 4.2%. For investors, this represents a relatively stable return in a market where capital growth remains the primary play.
While yields may not match some interstate alternatives, the stability and liquidity of Sydney’s rental market remain a drawcard, particularly for investors targeting premium suburbs with historically low vacancy rates and low arrears.
What Lies Ahead
The outlook for Sydney’s property market is cautiously optimistic, with several key factors shaping the months ahead:
Interest rate cuts are expected in the second half of 2025, which historically provide the most uplift to Sydney’s upper quartile markets.
Demand remains structurally supported by strong immigration, generational wealth transfers, and an entrenched national housing shortfall, estimated by AMP economists at 200,000 to 300,000 dwellings.
Affordability continues to be a major challenge, with Sydney’s dwelling-to-income ratio at a record high.
Loan serviceability now absorbs over 50% of the median household income for buyers with a 20% deposit, making it increasingly difficult for first-home buyers to enter the market.
Prestige buyers remain largely unaffected, with discretionary spending power allowing them to transact in tightly held, high-value suburbs despite broader affordability pressures.
Final Thoughts
At Rose & Jones, we continue to see strong interest from high-net-worth clients seeking quality assets in tightly held locations. The volatility of mid-2024 has created a window of opportunity for those with a long-term view, and the market’s resilience continues to reward considered, strategic acquisitions.
For those looking to secure an exceptional asset in one of the world’s most desirable cities, now remains a compelling time to act. We act for individuals and families who view property as a strategic asset, not just a transaction. We’re here to guide you if you’re considering your next move or seeking discreet access to Sydney’s most desirable opportunities. At Rose & Jones, we are committed to helping clients make informed property decisions in 2025 and beyond, contact our expert team of buyer’s agents today.
Source: CoreLogic Hedonic Home Value Index, May 2025
