Sydney Property Market Update 2025: Is Now a Good Time to Buy?

September 16, 2025

Sydney’s property market has always been dynamic. Over the past year, the sector has experienced measured growth, driven by fluctuations in interest rates, population trends, and infrastructure development.

In 2024, Sydney property values demonstrated resilience, with moderate price growth in family homes and increased demand in lifestyle hubs such as Surry Hills and Bondi Beach. Buyer interest was affected by rate hikes and lending conditions.

Now in 2025, property buyers, investors, and homeowners are watching every move. Interest rates, inflation figures, and housing stock levels are shaping decisions across the board.

In this guide, we’ll explore the current market status, pricing trends, buyer behaviour, and what industry experts forecast for the remainder of 2025. If you’re considering buying, this article offers a well-rounded look at where things stand.

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Sydney Property Prices in 2025

The median house price in Sydney currently sits at $1.48 million, while unit prices are around $820,000. Compared to 2024, house prices have grown by 3.1%, while unit prices saw a modest 1.4% increase. This marks a steady return to confidence, though not across all suburbs.

Notably, Double Bay, Surry Hills, and parts of Sydney’s Inner West have recorded above-average growth, thanks to their lifestyle appeal and proximity to Sydney CBD. Meanwhile, the middle-ring suburbs like Ryde, Strathfield, and Chatswood have seen softer performance due to affordability pressures and oversupply of apartment developments.

In contrast, areas in Western Sydney, influenced by ongoing work on the Western Sydney Airport, are seeing a lift in buyer interest, particularly for family homes. The auction clearance rate in early 2025 is hovering around 65-68%, which is lower than the boom years but still signals stable demand.

Weekly asking property prices have remained consistent, with some signs of upward pressure in inner city and lifestyle hubs.

Sources: Domain, Cotality, SQM Research Pty Ltd

Interest Rates and Lending Conditions

The Reserve Bank of Australia (RBA) has maintained a cautious stance in 2025. Interest rates have held steady at 4.10%, after a string of increases in previous years. This rate stability is offering some confidence to borrowers, though borrowing power remains lower than pre-2022 levels due to stricter affordability checks.

Australian Securities and Investments Commission (ASIC) guidelines continue to require banks to assess serviceability using a 3% buffer, keeping loan approvals tight. Deposit requirements have become more flexible for first-home buyers, with several state-backed incentives easing entry to the market.

Investors, however, are still facing tighter rules. Lenders are prioritising owner-occupiers, and many banks require larger deposits for investment properties.

As a result, the housing market is seeing increased demand from owner-occupiers and fewer new investors compared to previous years.

Buyer Demand and Market Sentiment in Sydney

In 2025, buyer activity has been described as steady but cautious. Most buyers are watching economic indicators closely before committing. First-home buyers remain active, particularly in outer suburbs and areas with new infrastructure upgrades, such as parts of Western Sydney and the Northern Beaches.

Investor activity is lower compared to the pre-pandemic peak but is beginning to return as rental yields improve and vacancy rates tighten. Consumer confidence is being influenced by broader economic factors, including inflation, employment stability, and demographic shifts.

The Sydney rental market is driving some buyers to consider purchasing sooner. Rising rents and low vacancy rates are making ownership more appealing.

Sydney’s vacancy rate is sitting at 1.3%, showing continued pressure in the rental market, particularly in inner west and eastern suburbs. Lifestyle preferences are also changing. Many buyers are targeting homes near public transport, shopping centres, and green spaces, reflecting a shift in living priorities.

Expert Predictions for 2025 and Beyond

The NSW property market is expected to see modest growth of 2–4% through the remainder of 2025, assuming stable interest rates and ongoing population growth. Limited housing supply, rising construction costs, and high migration are the main drivers supporting property values, according to SQM Research and Cotality.

NSW dwelling approvals have slowed, suggesting future supply constraints. This is likely to create more competition in key growth areas, especially in and around Greater Sydney.

In Sydney, market performance varies by region. Experts forecast steady growth in well-connected and supply-constrained suburbs, and with Sydney-wide dwelling values expected to rise between 2.5% and 4% over 2025.

Key growth drivers:

Stable interest rates and improved buyer confidence
Strong demand in lifestyle and employment hubs
Delayed new housing supply, especially apartments
Infrastructure upgrades around key corridors

Spotlight: North Sydney & Northern Beaches

In North Sydney, demand remains solid due to its proximity to the CBD and the limited availability of high-quality stock. Apartments are expected to perform well, driven by low vacancy rates and consistent rental demand.

The Northern Beaches continues to attract buyers seeking lifestyle and family homes. Suburbs like Mona Vale, Collaroy, and Freshwater are likely to experience stable growth due to limited supply and strong owner-occupier interest.

Key risks:

Oversupply in parts of the inner city and Western Sydney
Economic slowdowns or unexpected interest rate hikes
Lending restrictions for investors

Overall, the outlook favours buyers focused on long-term growth, particularly in low-supply, high-demand areas with strong infrastructure.

Is Now a Good Time to Buy in Sydney?

So, is 2025 the right moment to jump into the Sydney property market?

If you're a first-home buyer, stable interest rates and targeted incentives make now a reasonable entry point, especially in affordable growth corridors.

For investors, rising rents and low vacancy rates signal potential, though careful selection and due diligence are essential due to policy changes and market variability.

Upsizers looking for family homes in high-demand areas may face strong competition, but can also benefit from capitalising on equity built in recent years.

While there’s no “perfect” time to buy, current data points to a balanced market. The key is understanding your financial position, goals, and preferred suburbs, and consulting with a Sydney mortgage broker to explore the best loan options tailored to your needs.

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FAQs

Are Sydney property prices going up or down in 2025?

They are generally rising at a moderate pace, with houses growing faster than units. Location remains key in performance.

Is now a good time for first-home buyers in Sydney?

Yes, especially with government incentives and stable interest rates. Some outer and middle-ring suburbs offer good value.

How are interest rates impacting the property market?

High interest rates are reducing borrowing power but have also stabilised, offering predictability for buyers in 2025.

Which Sydney suburbs are best for property investment now?

Suburbs near Western Sydney Airport, lifestyle hubs like Bondi, and transport-linked areas are showing potential for capital growth.

Are unit prices more affordable in 2025?

Yes, units remain more affordable than houses, particularly in oversupplied areas or suburbs further from the CBD.

What are the available home loans for first-time buyers in Sydney?

First-time buyers in Sydney can access a range of home loans, including variable-rate and fixed-rate loans, low-deposit options, and government-backed schemes like the First Home Guarantee. Some lenders also offer waived LMI (Lenders Mortgage Insurance) and first-home buyer discounts. It’s best to compare offers or speak with a mortgage broker for tailored advice.

What are the suburbs to look out for in the Northern Beaches and wider Sydney?

In the Northern Beaches, watch Mona Vale, Collaroy, and Freshwater. Across wider Sydney, key suburbs include North Sydney, Strathfield, Parramatta, and areas near the Western Sydney Airport.

Please read our articles on the top suburbs to guide you with your search, either as a first-home buyer or a property investor:

Cheapest Suburbs in Sydney for First-Time Buyers

Most Expensive Suburbs in Sydney

Top Northern Beaches Suburbs for First-Home Buyers

Top Affordable Northern Beaches Suburbs

Best Suburbs to Invest in Sydney

Top Northern Beaches Suburbs for First-Time Property Investors

Final Thoughts

The Sydney property market in 2025 is showing signs of stability, with moderate price growth, steady buyer demand, and tightening rental conditions. While challenges such as high interest rates and limited borrowing power remain, well-located suburbs such as North Sydney, the Northern Beaches, and key middle-ring areas continue to offer strong long-term growth potential.

For those considering a purchase, this could be a strategic time to act, particularly with the right guidance. Reach out to our team at Mortgage Brokers Northern Beaches on 0403 316 686 to explore your options and secure the right loan for your goals.