Sydney property market data, trends, forecasts

Sydney property market news

The Sydney property market went through a turbulent time in 2022, but change is well and truly afoot. After a historic period of growth over the 2021 property boom that saw median values shoot up +25.3 per cent in just 12 months, Sydney house prices corrected at a sharp rate according to CoreLogic data. 2023 has seen a sudden and unexpected turnaround, though, as Sydney has returned to very significant monthly growth since the beginning of the year.

Sydney property prices - October 2023

Rising interest rates were the leading driver of the correction phase in a city where affordability has been stretched to the limit, and both sellers and buyers have been acting with caution until there is more clarity around when rates will settle. Despite interest rates still being a point of uncertainty, home prices are continuing to bounce back with strength.

Compared to 12 months prior, new listings for October were up +22.8 per cent in Sydney while total listings were up just +2.2 per cent, showing that sellers are finally coming back to the market but buyer demand has mostly been absorbing that new stock. Sales volumes dropped by -7.8 per cent year on year, although buyer activity is clearly ramping up in step with rising listings, helping to drive prices higher. 

Currently, Sydney's median days on market (DOM) has lowered to 29 for the quarter, well down up from 38 in October 2022.

House prices in Sydney

The 2021 property boom saw Sydney house prices surge to record highs before reaching their peak early in 2022. Detached housing lost significant value rapidly since that point, but surprisingly strong and consistent growth has returned over 2023. 

Sydney house prices - October 2023

The median house price in Sydney has rallied in 2023, growing by another solid +0.9 per cent in October to nearly $1.4 million, bringing quarterly gains to +2.7 per cent. Annual price changes have returned to strong positive territory at +10.0 per cent, and any further growth would begin to notch that figure up further.

Top 5 Sydney suburbs for first home buyers - houses

Sydney's median house price is still incredibly high, so affordability is hard to come by for first home buyers. Here are some of our top picks for Sydney suburbs where you can buy below the median house price. 

Top Sydney suburbs under $1 million house price

Unit prices in Sydney

Unlike houses, the median unit price in Sydney grew at a more measured rate through the 2021 boom as the pandemic drove a ‘race for space’ mentality amongst buyers. The good news for unit owners was that apartment prices then fell at a more gentle pace throughout the downturn — but, like houses, prices have been on the up again throughout 2023. 

Sydney unit prices - October 2023

Sydney's median unit price got another +0.6 per cent boost in October to just over $830,000. On a quarterly basis, things are comfortably back in the green at +1.9 per cent, while annual change is a solid +6.3 per cent. Bolstered demand for units due to rising immigration, renewed investor interest and fresh activity from first home buyers priced out of the house market or the extremely tight rental market have helped to drive growth in 2023.

Top 5 Sydney suburbs for first home buyers - units

Units offer better affordability for first home buyers in Sydney, although median prices are still substantial. Here are some of our top picks for Sydney suburbs where you can buy below the median unit price. 

Top Sydney suburbs under $800,000 unit price

Sydney property market forecast 2023-24

After a period of such massive growth, it was inevitable that a market correction would take place. Prices are now surging back up with Sydney leading the pack, but can that growth continue? Until recently the banks didn't think so, but their forecasts have changed dramatically.

NAB's latest Sydney house price forecast now has Harbour City dwellings pushing up by +11.6 per cent in 2023 with +5.0 per cent to follow in 2024. 

Westpac's Sydney real estate forecast now sees similarly strong growth for 2024 at +6.0 per cent with ANZ and CBA predicting a slightly more modest outcome. 

Big four banks' Sydney home price forecasts 2023-24

Whether or not growth can be sustained still largely depends on the supply and demand dynamic over the rest of the year. Interest rates had extensive impacts on the market and, while there was a period of stability, there remains a question mark around where the peak will be found. 

Currently, the RBA sits at 4.35 per cent, a long way up from the emergency-level 0.1 per cent rate borrowers were enjoying until May 2022. The banks mostly expect there will be no further hikes, with rate cuts to begin in the later stages of 2024 or early in 2025.

Big four banks' cash rate forecast 2023-24

Sydney apartment prices held up better than houses during the downturn. That strong performance from units could continue for a few reasons. 

For one, the 2021 boom was house-led. Affordability in the house market has reached critical levels, and with house prices gaining a significant amount more than units, they also had further to correct. 

Units are also expected to appeal further to incoming investors and first home buyers as immigration is set to ramp up significantly, bringing additional demand to the rental market.

What are industry experts saying?

Michael Yardney - Director of Metropole Property Strategists

"Sydney's housing market is spearheading the housing market recovery. Its strong pace of annual growth is remarkable in the face of the substantial deterioration in affordability that occurred with the sharp rise in interest rates.

It is also a testament to the strong demand aided by the pick-up in population growth, and limited supply that has offset the effects of higher interest rates.

After all, some of the city’s suburbs are so tightly held that an available property for sale comes around once in a blue moon with homeowners holding onto their houses for as long as 20 years.

And areas in lifestyle or coastal suburbs are still in particularly strong demand as homebuyers wait to secure their dream property."

Louis Christopher - Managing Director at SQM Research

"The fear of missing out is about to explode as buyers who have been waiting on the sidelines for prices to fall realise that the market has bolted, and are now responding by buying in.

It’s clear vendors are feeling more confident this year than this time last year, which, I think, is due to a combination of better than expected buyer activity over the course of 2023 and the increasing likelihood that the RBA has reached its terminal rate.

I believe demand is rising because of strong population growth and buyers’ fear of missing out, which has fuelled a lift in asking prices, so vendors are responding to the stronger market conditions and are now more willing to list their property."

Sydney house prices graphs and charts

CoreLogic's latest chart pack clearly shows the rapid acceleration, subsequent deceleration, and then rebound of the Sydney property market over the past three years.

The upswing during the 2021 boom was one of the most aggressive periods of growth in Australian history. The downturn was equally historic, with prices falling more than 13 per cent in 12 months. Now the worm has turned once again. 

Looking at the wider context of the past 30 years, though, prices in Sydney have skyrocketed. The below chart shows Sydney house prices surging well beyond every other capital city, particularly over the past three years.

When taken into the perspective of even the past decade, Sydney homeowners have experienced huge gains to their property values. 

Selling Sydney property

According to Domain, Sydney's auction clearance rate has broadly stabilised after climbing up from its low point of 48 per cent in winter 2022. Days on market (DOM) in Sydney has also fallen as the market has strengthened.

Sydney property investment

The Sydney property market is looking promising for investors as prices remain well below peak levels, rental vacancies hover around record lows, asking rents continue to increase, and further demand is expected as immigration returns en masse in 2023. Rising interest rates have driven some investors out of the market, though, as ballooning mortgage repayments have outweighed higher rents in some cases. 

Top 5 suburbs for Sydney investors

BuyersBuyers' latest Investor Special Report detailed some of the top suburbs where Sydney investors could find strong potential. 

BuyersBuyers' co-founder Pete Wargent explained that, thanks to immigration, "there will be a lot of demand for rentals which will bring investors back in. Most of the picks are driven with that dynamic in mind."

Top suburbs for investors to buy units in Sydney

The report noted that "the best opportunities in the unit market are set to be in the established housing market rather than for expensive new builds. Look for boutique apartment blocks with a high land value content and units with a point of scarcity, such as a view.

Looking to invest in Sydney property? 

• Check out our list of best suburbs to invest in Sydney for 2023
• Dig into some expert advice on where to find the top 10 suburb picks for Australian investors
• Find out the Sydney suburbs with the highest rental yield
• On a budget? Here are the top 10 cheapest suburbs to buy in Sydney