The Sydney property market is charting a course of steady, if modest, growth, but a deepening affordability crisis is creating a two‑speed market that’s pushing houses further out of reach.
Sydney’s dwelling values continued their upward trend in July, posting a 0.6% rise. This marks a period of sustained growth, holding steady from the previous month. While the frantic pace of the post‑pandemic boom is a distant memory, the market has found a consistent rhythm.
As Tim Lawless notes on the national trend, which provides context for Sydney’s performance:
Although the monthly growth trend looks to have found a sweet spot, the rolling quarterly change does show a clear upswing since February’s rate cut.
Sydney housing market trends
| Metric | Value |
|---|---|
| Median Dwelling Value | $1,228,435 |
| Median House Value | $1,525,956 |
| Median Unit Value | $868,341 |
| 3-Month Change in Dwelling Values | +1.8% |
| 12-Month Change in Dwelling Values | +1.6% |
| Average Annual Growth (Past Decade) | +4.5% |
| Total Sales (Past 12 Months) | 92,222 |
| Annual Change in Sales Volume | -8.8% |
Source: Cotality Australia
Note: The negative annual change in sales volume indicates that while prices are rising, fewer properties are transacting compared to the previous year, highlighting the impact of tight supply.
The most significant story emerging from the Sydney market is the staggering divergence between house and unit values. While both property types are growing, houses are leading the charge by an enormous margin.
- House values have surged 3.3% in the first seven months of the year.
- Unit values have risen by just 0.7% over the same period.
This performance gap has blown the median value difference out to a record high of 75.7%. In real terms, the median Sydney house is now worth approximately $658,000 more than the median unit.
This dynamic presents both challenges and opportunities. Tim Lawless directly identifies the core issue:
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Housing affordability poses the most significant barrier to a material rise in housing prices.
It’s not just buyers feeling the pinch. Sydney’s rental market has seen growth re‑accelerate, with rents rising 0.4% in July on a seasonally adjusted basis—the fastest monthly increase since April of last year.
Sydney Rental Market Snapshot – August 2025:
| Rental Metric | Houses | Units |
|---|---|---|
| Median Weekly Rent | $770 | $720 |
| Gross Rental Yield | 2.6% | 4.2% |
| Annual Change in Rent | +1.8% | +3.6% |
Source: Cotality Australia
Note: The data clearly shows that gross rental yields for units (4.2%) are substantially stronger than for houses (2.6%). This reflects the comparatively lower buy‑in price for apartments and robust tenant demand, making them a compelling proposition for cash‑flow‑focused investors.
Sydney house prices – the longer-term data
The Sydney property market remains fundamentally strong, but its trajectory for the remainder of 2025 is set to be one of modest, sustainable growth rather than a speculative boom. As Tim Lawless concludes, the broader outlook suggests that:
The tailwinds of lower interest rates, higher confidence, and low housing supply are likely to outweigh the headwinds, providing the foundations for further modest growth in housing values in 2025.
For buyers, sellers, and investors, the key will be navigating the distinct performance of the house and unit markets and understanding that while conditions are improving, affordability will remain the ultimate gatekeeper of market growth.
