Woollahra has always been one of Sydney’s most reliable indicators of where the prestige market is heading. Not because of headlines or median prices, but because of who buys here, how they buy, and what they refuse to compromise on.
In 2025, that distinction became clearer than ever.
While large parts of Sydney slowed under interest-rate pressure, Woollahra’s top end continued to operate independently. The best homes sold decisively, often off-market, and often at prices that had little to do with broader housing sentiment.
But 2025 also marked the beginning of something new — and largely untested.
The NSW Government’s Low and Mid-Rise (LMR) Housing Policy has fundamentally altered the planning landscape across parts of Woollahra. For the first time, large-scale luxury apartment development is being approved in precincts historically dominated by tightly held homes and small boutique blocks. The long-term impact of this shift on surrounding house values is not yet proven.
And that uncertainty matters.
What Actually Happened in 2025
Across the past 12 months, Woollahra recorded approximately $704 million in disclosed residential sales across 184 transactions. On the surface, prices appeared steady:
- Median house price: around $4.9 million
- Median unit price: around $1.56 million
But Woollahra has never been a “median-driven” market.
What defined 2025 was buyer selectivity. Capital flowed strongly into A-grade assets, while properties with compromises — location, outlook, noise, planning exposure — took longer to sell and attracted less urgency.
Houses: Scarcity Still Protects Value — For Now
Detached homes in Woollahra remain structurally undersupplied, and that scarcity continues to support prices for the best properties.
Buyers in 2025 consistently paid premiums for:
- Larger land holdings
- Strong orientation and privacy
- Architectural integrity
- Fully renovated, turnkey homes
Four-bedroom house values have risen from roughly $4 million in 2020 to over $5.4 million in 2025, despite rising interest rates. That resilience reflects the buyer profile — equity-rich households with low reliance on debt.
However, a new variable has entered the equation.
The LMR Effect: An Untested Market Shift
Under the Low and Mid-Rise Housing Policy, land within 800 metres of Edgecliff, Double Bay and Rose Bay centres is now subject to state-led density rules that override much of Woollahra’s traditional planning controls.
This has opened the door to large-scale luxury apartment approvals in areas that have never absorbed development at this scale before.
The key issue is not supply — it is absorption.
Woollahra has not historically been a high-volume luxury apartment market. Demand has always existed, but supply has been constrained. The LMR policy risks testing that balance.
If a meaningful number of luxury apartments come to market at once, several outcomes are possible:
- Buyer attention may shift away from nearby houses, particularly those with compromised privacy, outlook or future development exposure
- Homes located within LMR catchments may experience longer days on market
- In some streets, price growth may stall — or even soften — as buyers wait to see how density plays out
- The prestige premium may increasingly flow only to properties outside redevelopment zones
This does not imply a collapse — but it does introduce pricing friction in areas that have historically enjoyed unquestioned demand.
Apartments: Opportunity and Oversupply Risk
There is a clear distinction forming within the apartment market.
Boutique, house-like apartments in heritage or low-density buildings remain highly sought after. These properties are scarce and largely insulated from policy-driven oversupply.
By contrast, new luxury apartment developments approved under LMR are an untested product in Woollahra. The buyer pool for $3–$6 million apartments is finite, and if supply outpaces demand, pricing power will weaken.
Not all luxury stock will be treated equally.
Two Sales That Still Define the Market
The strongest sales of 2025 reinforce what Woollahra still rewards.
1/333 Edgecliff Road sold in 2014 for $3,920,000 and again in March 2025 for $7,100,000 — an 81% increase over 11 years. Scarcity, proportion and heritage drove the outcome.
20 Roslyndale Avenue sold in 2012 for $10,750,000 and again in June 2025 for $23,500,000 — nearly 120% growth over 13 years. Land, privacy and architectural integrity mattered more than market cycles.
These sales sit outside the LMR narrative. That distinction is critical.
Interest Rates Are Secondary to Planning Risk
At a cash rate of 3.60%, interest rates remain a factor — but they are no longer the dominant one.
The market divide is now clearer:
- Rate sensitivity affects entry-level buyers
- Planning sensitivity affects mid-to-upper price brackets within LMR catchments
- Scarcity sensitivity defines the top end
In 2026, planning overlays may influence buyer behaviour more than monetary policy.
What to Expect in 2026
The market is likely to move in two phases:
First Half of 2026
- Residual confidence from 2025
- Prestige homes outside LMR zones continue to attract strong demand
- Limited immediate impact from new apartment supply
Second Half of 2026 and Beyond
- Increased scrutiny of streets affected by density
- Longer selling periods for homes near approved developments
- Greater price dispersion between protected and exposed locations
Final Thoughts
Woollahra remains one of Australia’s most resilient residential markets — but it is no longer uniform.
The approval of luxury apartments across LMR zones introduces an untested dynamic. Some areas will adapt smoothly. Others may see slower buyer interest and softer pricing as the market recalibrates.
