Sydney Property Market
Updated February 2026
As Sydney moves into 2026, the residential property market remains supported by solid underlying fundamentals, albeit with signs of moderation emerging. According to the CoreLogic RP Data Daily Home Value Index as at 31 January 2026, Sydney dwelling values are up 6.4% over the past year, while quarterly and monthly growth has eased to a more measured 0.2%, indicating a market transitioning away from the stronger momentum seen earlier.
Auction clearance rates remained consistently solid throughout 2025, typically sitting between the high-60s and mid-70s. Whether this will continue into 2026 is too early to say; however, we do expect performance to continue to vary depending on suburb, property type and presentation.
Looking ahead to 2026, tightly held, high demand suburbs are expected to remain competitive, particularly for well presented homes, which continue to attract strong buyer interest and often achieve sale prices well above quoted ranges.
Buyer preferences have also evolved. The long-held strategy of “buying the worst house in the best street” has become less attractive amid elevated renovation costs and ongoing builder shortages. As a result, many buyers are prepared to pay a premium for fully renovated properties offering immediate liveability and greater cost certainty. That said, knock-down rebuilds are still anticipated to remain a strong theme across many Sydney suburbs.
Properties with drawbacks such as high-traffic positions, awkward layouts, or less-favoured locations are attracting more measured interest and often face limited bidding momentum come auction day.
At the policy level, the Federal Government’s Home Guarantee Scheme, which commenced in October 2025, is expected to continue supporting demand at the entry level, adding some further upward pressure to prices in that segment of the market.
Looking ahead, the outlook is becoming more nuanced. With the possibility of further interest-rate rises now increasingly likely, some dampening of buyer demand may occur. However, our broader forecast for Sydney’s housing market remains unchanged. Strong population growth driven by high immigration, combined with chronic housing undersupply, suggests that any softening is likely to be modest rather than material in the short to medium term.
Sydney property market statistics
Growth figures
According to the CoreLogic RP Data Daily Home Value Index as of 31 January 2026, Sydney dwelling values have recorded the following growth:
Overall Dwellings:
Annual: +6.4%
Quarterly: +0.2%
January 2026: +0.2%
Houses:
Annual: +7.6%
Quarterly: +0.2%
January 2026: +0.3%
Units:
Annual: 3.3%
Quarterly: +0.4%
January 2026: +0.2%
National Comparison (Annual): Sydney’s growth lags behind top performers like Darwin (+19.7%) and Perth (+18.5%), and is only ahead on an annual basis of Melbourne (+5.4%) and Canberra (+5.5%).
Sydney Median Prices
Houses: $1,598,819
Units: $903,210
Auction clearance rates
In 2025, Sydney’s auction clearance rates remained relatively stable, generally ranging from the mid-60s to early-70s.
The first weekend of auctions for 2026 has recorded an initial clearance rate of 78%. However, this result is based on a very limited number of auctions and should be interpreted with caution. One weekend of results is not sufficient to establish a trend, and it will take several more weeks of consistent auction activity and higher volumes before a clearer picture of market conditions emerges.
Whether clearance rates hold at these levels will depend on factors such as listing volumes, interest-rate movements and broader economic conditions as the year unfolds.
Clearance rates provide a useful snapshot of market activity, but it’s important to recognise that the figure is an average across all Sydney suburbs. It does not capture the often significant variation between locations. Premium or highly desired suburbs typically achieve higher clearance rates, driven by strong demand and limited supply, while less sought-after areas may record weaker results.
Auction Clearance Rates 2023 - 2026
Interest rates
Between May 2022 and November 2023, the Reserve Bank of Australia (RBA) delivered a staggering thirteen consecutive rate hikes, lifting the cash rate from a historic low of 0.10% to 4.35%. As inflation showed signs of easing through 2024 and into 2025, the RBA shifted course, cutting rates by 0.25% in February, May and August 2025, bringing the cash rate down to 3.60%.
However, as 2026 begins, the outlook has become more uncertain. Inflation has proven more persistent than anticipated, running above the RBA’s forecasts, and markets are now pricing in a 0.25% rate increase at the next RBA meeting. If delivered, this would mark a renewed tightening phase and reinforce the RBA’s commitment to containing inflation, even at the risk of dampening economic and housing market momentum.
The RBA meetings for 2026 are scheduled as follows:
- Feb 2–3
- Mar 16–17
- May 4–5
- Jun 15–16
- Aug 10–11
- Sep 28–29
- Nov 2–3
- Dec 7–8
Reserve Bank Cash Rates 2019 - 2025
Rental vacancy rates
According to the most recent SQM Research rental vacancy survey for December 2025, Sydney residential vacancy rate of 1.8% has improved, up from November's 1.4%.
While this is welcome for tenants, it is far from a balanced market (which is typically around 3.0%–3.5%), with demand still significantly outpacing supply. A substantial increase in rental stock is needed to achieve balance.
Sydney Property Market Observations
Early 2026
Open for inspections have been well attended, reflecting the typical resurgence in buyer activity following the Christmas break. That said, we are sensing a degree of caution among buyers, with some hesitancy to commit at this stage due to ongoing uncertainty surrounding interest rate settings.
Underquoting
Underquoting remains a persistent feature of the Sydney property market and continues to frustrate buyers. In response, NSW Fair Trading introduced compulsory training on the issue as part of the 2024/25 Continuing Professional Development (CPD) program for agents. The real test, however, will be whether this initiative is supported by meaningful enforcement. To date, penalties have been limited and inconsistently applied.
Immigration
High immigration levels are expected to persist into the foreseeable future placing further pressure on an already undersupplied property market and driving demand for both housing and rental accommodation. Without a meaningful increase in new housing supply, strong competition is likely to persist, sustaining upward pressure on prices.
Rezoning
To ease supply pressures, the NSW Government has announced widespread rezoning across Sydney, particularly around major transport hubs, to facilitate the delivery of a substantial number of new dwellings, predominantly apartments. The objective is to alleviate the region’s housing shortage by shifting large tracts of land from low density to medium and high density use.
Unsurprisingly, the proposals have generated concern and uncertainty within affected communities, with many awaiting clarity as the finer details of the rezoning process are finalised.
Where to from here?
In recent years, the Sydney property market has consistently defied predictions, shaped by a complex mix of global and domestic forces. COVID-19 lockdowns, inflationary pressures, and rapid interest rate rises were all expected to cool demand, yet the market has remained remarkably resilient. More recently, international political uncertainties, including ongoing conflicts as well as shifts in US leadership and policy, have added further layers of complexity, making reliable forecasting even more challenging.
Yet despite these uncertainties, the core fundamentals of the Sydney market remain intact—most notably, the persistent imbalance between supply and demand.
For buyers, however, strategy is more important than ever. Avoiding overpayment requires rigorous due diligence, a clear understanding of fair market value, and disciplined negotiation. It is also critical to stay across the NSW Government’s planning reforms and rezoning initiatives, as these changes may reshape neighbourhood density, drive new development, and influence property values over the medium to long term. Factoring these considerations into purchasing decisions will be key to securing both value and future growth.
This Week's Sydney Auction Results
Each week, we take a look at Sydney’s latest auction clearance rates to give you a snapshot of market activity and buyer demand. These figures are a key indicator of confidence in the property market—helping both buyers and sellers understand how properties are performing right now.
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