Sydney’s housing market is expected to record moderate growth over the next six months, but gains will vary widely between suburbs, according to the latest Shore Financial State of Sydney Report.
The quarterly report divides Sydney’s 600-plus suburbs into five quintiles based on their current median asking prices for houses:
From there, suburbs are benchmarked on recent trends in asking prices, days on market, inventory levels and sales volumes, before being ranked for expected growth in the next six months.
The latest leaders are Mount Druitt (Heartland Sydney), Westmead (Suburban Sydney), Kogarah (Rising Sydney), North Narrabeen (Professional Sydney) and Randwick (Affluent Sydney).
Shore Financial CEO Theo Chambers (pictured) said the six-month forecasts issued in February proved accurate in the more affordable quintiles.
“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,” Chambers 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.”
Chambers noted that while some commentators are predicting strong citywide growth, Shore Financial’s analysis points to a more mixed outlook.
“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,” he said. “Many of those suburbs have low levels of inventory, which will force buyers to bid hard, especially for A-grade properties.
“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.”
Chambers added that further monetary easing would provide some uplift but not the type of boom seen earlier in the decade.
“If interest rates fall further in 2025, buyers’ confidence and borrowing power will increase, which should lead to a rise in demand,” the Shore Financial boss said.
The outlook follows the RBA’s latest 25bp rate cut to 3.6%, which it said reflected easing inflation and a tight labour market. Cotality noted the move will lift borrowing capacity and confidence, though affordability constraints remain a cap on growth.
“That said, buyers don’t have unlimited piles of cash to spend,” Chambers said. “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.”
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