Michael Yardney , Founder
Sydney’s property values have continued their upward trajectory, recording a 1.1% rise through the June quarter. This welcome growth added just over $13,000 to the city’s median dwelling value, a significant turnaround from the 1.4% decline seen in the final quarter of 2024. For the first half of the year, Sydney home values have increased by a solid 1.9%.
A clear distinction is emerging between property types. The growth is being largely driven by houses, which saw values climb by 2.5% over the first six months of the year. In contrast, the unit market has been more subdued, with a modest increase of 0.4%. This highlights a continuing buyer preference for detached housing in the harbour city.
Sydney housing market trends
| Sydney Key Property Values – July 2025 | |
|---|---|
| Median dwelling value | $1,210,222 |
| Median house value | $1,496,985 |
| Median unit value | $863,257 |
| Change in dwelling values (3 months) | 1.1% |
| Change in dwelling values (12 months) | 1.3% |
| Avg. annual growth (past decade) | 4.6% |
Source: Cotality Australia
There is some welcome news for Sydney’s renters. The intense pressure on the rental market appears to be easing, with the pace of rental growth slowing significantly. The annual change in Sydney rents has now reduced to 1.9%. This is a considerable slowdown from the 7.4% annual increase recorded in the 2023-24 financial year and the staggering 11.1% surge during 2022-23.
Interestingly, this easing of rental appreciation is occurring even as vacancy rates remain extremely tight. The vacancy rate in June eased to just 1.8%, which is well below the city’s decade average of 2.9%. This suggests that while stock is scarce, rental affordability constraints are beginning to place a natural ceiling on how much rents can rise.
| Sydney Rental Market Snapshot – July 2025 | ||
|---|---|---|
| Metric | Houses | Units |
| Median weekly rent | $775 | $720 |
| Gross rental yield | 2.7% | 4.2% |
| Annual change in rent | 1.3% | 3.1% |
| Vacancy rate (Sydney) | 1.8% | |
Source: Cotality Australia
Sydney house prices – the longer-term data
While prices are rising, the volume of sales provides a more nuanced picture. Over the past twelve months, 94,869 sales were recorded in Sydney, which represents a 5.7% decrease annually. This indicates that while buyer demand is present, low stock levels continue to define the market.
Looking ahead, a combination of factors is set to shape market conditions. The prospect of further interest rate cuts later in the year is fuelling positive sentiment. Coupled with a tight labour market and persistently low levels of new housing supply, the foundations are in place for continued modest growth.
However, significant headwinds remain. Housing affordability is a primary constraint, with the recent gains in property values eroding some of the benefits of lower borrowing costs. Elevated levels of household debt and ongoing geopolitical risks also serve as potential dampeners on the market. We anticipate the tailwinds will likely outweigh these headwinds, supporting further modest growth in 2025. We do not expect conditions to be anywhere near as strong as the boom seen during the pandemic or the sharp recovery of early 2023.
