Sydney’s Property Market: It’s Not as Grim as the Headlines Suggest
Despite gloomy headlines, the real story in Sydney’s property market is far more nuanced—and in many ways, more optimistic—than it may appear.
1. Yes, Prices Fell—But Context Matters
According to CoreLogic, Sydney’s median property value fell -13.8% to $999,278 between January 2022 and January 2023. Houses dropped -15% to $1,205,618, and apartments declined -10.4% to $772,807.
This was the most significant decline on record, even sharper than the -14.9% drop during the 2017–2019 downturn—but it unfolded over just one year, rather than two. With prices falling consistently over 12 months, many buyers paused, hoping to catch the market at its bottom.
2. But It’s Not All Bad News
It’s crucial to view this correction in light of the 27.7% surge that occurred between mid-2020 and the end of 2021. Buyers who entered the market before or even partway through that boom are still in a strong position overall.
And Sydney’s market doesn’t move in lockstep. Certain suburbs and property types have remained resilient—particularly in the prestige and Eastern Suburbs markets, where strong buyer demand continues to push prices upward.
Here’s a snapshot of high-performing Eastern Suburbs (latest data available):
| Suburb | Median House Value | 12-Month Growth | Median Apartment Value | 12-Month Growth |
|---|
| Woollahra | $4,800,000 | +3.4% | $1,575,000 | +16.6% |
| Rose Bay | $6,000,000 | +13.5% | $1,653,000 | +14.2% |
| Bellevue Hill | $8,700,000 | +14.5% | $1,603,000 | +10.6% |
| Bronte | $5,725,000 | +2.2% | $1,615,000 | +10.2% |
| Tamarama | N/A | N/A | $2,575,000 | +5.1% |
| Darling Point | N/A | N/A | $2,540,000 | +5.4% |
Source: Realestate.com.au, Feb 2023
3. More Time, More Choice, Less Pressure
With the market cooling, properties are taking longer to sell. That means less FOMO, more breathing room, and better negotiating power for buyers.
Given most Australians hold onto their homes for a decade or more, buying now—when competition is subdued—can set you up well long-term.
4. A Smart Time to Upsize
If you’re looking to upgrade, this is an ideal window. When prices fall, the price gap between your current and future home narrows.
Example:
- Current home (was $3M, now -15%): $2.55M
- Next home (was $4M, now -15%): $3.4M
- The original gap was $1M; now it’s just $850K—a $150K saving, which matters in a higher-rate environment.
5. Yields Are Improving for Investors
One reason investors retreated in 2021 was poor rental yield—some as low as 2.5%. That’s changed.
- House yields: now ~2.8%
- Apartment yields: up to ~3.9%, according to CoreLogic
With prices lower and rents surging, Sydney investment property is offering better returns—and renewed interest from landlords.
6. First Home Buyers: Opportunity Knocks
For first-time buyers, lower prices and reduced competition are good news. With government incentives still in place and the median dwelling price down, entering the market—especially via apartments—hasn’t looked this viable in years.
The biggest hurdle has always been the deposit. Now, that hurdle is lower.
7. Markets Turn—And They Often Turn Quickly
Finally, history shows that Sydney’s property cycles don’t stay flat forever. When prices recover, they tend to do so sharply.
Buying in a slower, more balanced market often means better deals and fewer bidding wars. Waiting until prices take off again may mean paying more—just for the comfort of following the crowd.
The Bottom Line
Whether you’re upgrading, investing, or buying your first home, today’s market—though complex—offers real opportunity. With reduced competition, better yields, and negotiable conditions, the smart buyers are already back in.
If you’re looking to make a move in Sydney’s Eastern Suburbs, I’d be happy to help you make a well-informed, strategic decision.
