State of Sydney Report August 2025

While the Sydney property market has been slowing in the second half of the year, the latest edition of the Shore Financial State of Sydney Report has found that many suburbs are likely to keep growing over the next six months.

The quarterly Shore Financial State of Sydney Report divides Sydney’s 600-plus suburbs into five quintiles, based on their current median asking price for houses:

● Quintile 1 = Heartland Sydney
● Quintile 2 = Suburban Sydney
● Quintile 3 = Rising Sydney
● Quintile 4 = Professional Sydney
● Quintile 5 = Affluent Sydney

 

Standout suburbs – Heartland Sydney (quintile 1)

Standout suburbs – Suburban Sydney (quintile 2)

Standout suburbs – Rising Sydney (quintile 3)

Standout suburbs – Professional Sydney (quintile 4)

Standout suburbs – Affluent Sydney (quintile 5)

* The median house price growth over the past 12 months is not for the suburb but the ‘SA3 region’ (a technical term the Australian Bureau of Statistics uses to define a cluster of suburbs) in which the suburb is located. SA3s often closely align to local government areas.

Shore Financial CEO Theo Chambers said the six-month forecasts issued in the previous edition of the Shore Financial State of Sydney Report, in February, turned out to be quite accurate.

“The forecasts held up very well in the Heartland Sydney, Suburban Sydney and Rising Sydney suburbs – the three lower-priced quintiles – as the firm levels of demand we anticipated played out, in part due to the interest rate cuts in February and May,” he said.

“However, there were some discrepancies in the Professional Sydney and Affluent Sydney suburbs – the two higher-priced quintiles – which underperformed the forecasts, likely due to affordability pressures.”

Mr Chambers said that while some commentators were expecting very strong growth rates throughout Greater Sydney in the next six months, the analysis conducted for the Shore Financial State of Sydney Report suggested a more nuanced picture.

“In some suburbs, growth rates are highly likely to exceed 5% for the next half-year, putting them on track for double-digital annual growth rates. Many of those suburbs have low levels of inventory, which will force buyers to bid hard, especially for A-grade properties,” he said.

“However, there are other pockets of Sydney where prices will barely move – or even decline – over the next six months, due to a combination of affordability pressures and higher levels of supply.”

Mr Chambers said further rate cuts would put upward pressure on prices, but wouldn’t lead to the kind of rampant growth seen in 2021.

“If interest rates fall further in 2025, buyers’ confidence and borrowing power will increase, which should lead to a rise in demand,” he said.

“That said, buyers don’t have unlimited piles of cash to spend. Australian Bureau of Statistics data show that, in the four years to June 2025, wages throughout the country grew 14.4% while prices rose 19.2%, which meant the average Australian suffered a pay cut in inflation-adjusted terms. In other words, Sydney buyers are facing affordability constraints, which will put a ceiling on any near-term growth.”