July 2025 marked a key pivot point: steady growth, emerging momentum, and stronger signals for investors and buyers. After two RBA rate cuts in early 2025, the Sydney housing market is showing renewed strength, albeit with affordability challenges and low rental growth.
1. Property Values Climb Again
– Sydney’s median dwelling value reached A$1,210,222, rising 0.6% in June and +1.1% over Q2, equating to 1.3% annual growth.
– Houses led growth with a 1.3% quarterly increase and 2.5% YTD, compared to units at just 0.5% quarterly / 0.4% YTD.
– Price gaps widened: median house price sat around A$1,496,985, while units trailed at A$863,257
2. Rental Market Slows, Still Tight
– Annual rent growth in Sydney now sits at +1.9%, down significantly from prior peaks of 7–11%.
– Vacancy rates remain ultra-low at ~1.9%, keeping pressure on tenants despite softening rent hikes.
3. Days on Market Dropping Fast
– Properties are selling faster than last year: average days on market for houses dropped to ~30 days, units at 32.
– Fringe suburbs in Greater Sydney are experiencing the most pronounced acceleration in turnover.
4. Suburbs & Property Types Leading Growth
– Western Sydney suburbs like St Marys (+8.4%), Richmond-Windsor (+6.7%), and Fairfield (+6.5%) lead annual gains.
– Eastern suburbs such as Potts Point, Bronte, and Darlinghurst are posting double-digit annual growth—Potts Point apartments rose nearly 3.9% in two months, Bronte houses saw 5.8% growth.
5. What’s Fueling Growth (Key Drivers)
– The RBA cuts (Feb & May, 0.25% each) have boosted buyer confidence, especially in inner and middle-ring suburbs like Leichhardt and Pennant Hills.
– Demand remains high, supply remains constrained—listings in Sydney are about 5–6% lower YoY, and vendor discounting has narrowed to around 2.7%.
– Population inflows continue to stretch supply; net overseas migration exceeded forecasts, driving housing shortages.
6. Outlook: What’s Ahead for Sydney
– Analysts (Domain, Reuters) forecast steady price growth of around 4–7% in Sydney for 2025–26, with house prices approaching A$1.83M by mid‑2026.
– Rent growth is expected to remain modest—3–4% nationally, with Sydney likely tracking similar modest upwards pressure.
– Policy risks include capital gains tax reform proposals targeting investors, potentially impacting appetite for established homes vs new apartments
Sydney’s July 2025 market shows signs of reinvigoration—modest price gains, faster sales, and high demand well outpacing supply. Houses remain preferred, rent growth has softened, and people are returning to inner and middle suburbs. With further rate cuts likely and investor incentives strong, 2025‑26 may yet deliver slow‑burning momentum—but affordability remains tight, especially for first‑time buyers.
