State of Sydney Report February 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 Shore Financial State of Sydney Report had identified a select group of locations that were bucking the norm.

“Greater Sydney’s housing market has remained relatively stable over the past year, with the median house price rising 5.2% over the year to January 2025. While overall growth has been modest, certain suburbs have experienced more pronounced price increases, highlighting pockets of strong demand across the city,” he said.

“Higher-growth locations such as Leichhardt, Canada Bay and Auburn recorded annual house price increases of around 9% to 11%, significantly outpacing the broader Sydney market.

“Stronger growth locations in 2025 can be found across the city – while they’re occurring across a range of price-points, they do have one thing in common, which is low days on market and limited supplies of inventory, which means buyers in those markets are feeling a
sense of urgency.

“Over the next six months, demand is likely to be quite soft in most parts of Sydney, but not all. If you’re a buyer, it’s important you understand whether conditions in your target suburb are favouring buyers or sellers, because that will influence your pricing and negotiating strategy.”

Mr Chambers said the one factor that could upend the forecasts in the Shore Financial State of Sydney Report was interest rates.

“With interest rate reductions now underway, market dynamics are likely to change. While the February rate cut won’t immediately improve serviceability in a significant way and the ability for buyers to enter the market, it will give an immediate lift to confidence and
sentiment, which play an equally important role in influencing property prices.

“If and when further rate cuts occur, that will make a meaningful difference to serviceability, because buyers’ borrowing capacities will improve significantly in line with the substantial fall in repayments. Buyers typically calculate how much they’re willing to pay for a property by reverse-engineering what they can afford with a mortgage. Therefore, after another one or two rate cuts, the amount of money buyers will be able to borrow at today’s rate of repayments will be significantly higher, which will give them the ability to pay more for a
property.

“This will have a direct impact on Sydney house prices, particularly in mortgage-reliant suburbs, where affordability pressures have weighed on demand. If rates fall faster and further than currently expected, the resulting boost in buyer activity could drive stronger price
growth across Sydney in the next six months than current data suggests,” he said.

“Nevertheless, the locations highlighted in this report are expected to outperform the broader market, as they are already experiencing heightened buyer competition and sustained demand.”