Sydney’s median house price has fallen by another $82,000 in just 90 days as the property downturn deepens and spreads across Australia’s most expensive housing market.
It’s been a rapid descent from when Sydney’s house prices peaked in December last year, topping out at $1,804,229. At the time, it was predicted Sydney would hit $2 million by the end of 2026 .
But the latest quarterly Domain House Price Report, released on Thursday, shows Sydney’s median house price has slipped to $1.661 million.
This figure winds Sydney’s housing market back by two years to December 2024 levels , when the cash rate was 4.35 per cent. The current cash rate is now even higher, at 4.6 per cent, and could go higher .
Meanwhile, Sydney’s median unit price has dropped by 3 per cent, or $25,377, to $820,890 over the September quarter — the steepest quarterly fall for Sydney units in four years.
The price decline isn’t isolated to prestige markets either – 132 property markets, including 78 house markets and 54 unit markets across Greater Sydney, have seen a drop in median prices over the last 12 months.
Domain chief residential economist Nicola Powell says Sydney’s housing market downturn is now broadening and gathering momentum, with weak buyer confidence underpinning the decline.
“I think a lack of confidence is at the core of everything, and it’s almost this kind of mix of psychology and economics,” she says.
“You’ve seen all of these headwinds clash and collide all at once, and what that’s coming out as is [steeply] falling prices [gaining] momentum.”
The Reserve Bank of Australia has already lifted the official cash rate four times this year, with the possibility of a further rate hike before the end of the year — which Powell says in itself weakens confidence.
“ Sydney, in particular, is very exposed to changes in investor activity, and we saw large structural changes to policies as a result of the budget, and that’s given investors jitters, and they have just retreated,” she says.
“A I think the impact in Sydney is evident. It’s coming out in not only house prices, but also unit prices.”
Marsfield in the city’s north has seen the steepest year-on-year house price drop ($418,000) of any Sydney suburb, with its median house price plunging by 22 per cent to $1.485 million..
The Ryde-Hunters Hill statistical area, which includes Marsfield and other neighbourhoods such as Ryde, North Ryde, Macquarie Park, Eastwood, Gladesville and Hunters Hill, saw an overall median house price decline of 8 per cent in the September quarter.
Local agent Catherine Murphy of The Agency Epping points to one home in Marsfield that sold for $2.67 million in March 2024, and sold again last month for just $2.18 million.
The flipside of falling house prices in Marsfield and surrounding suburbs is an uptick in demand, Murphy says, especially for properties that present good value.
“I have seen developers drop right off and certainly I haven’t really met an investor since the budget announcement in May,” she says. “So, those two markets have certainly gone incredibly quiet.
“However, if you do have a home that is well presented, it doesn’t have to have all the bells and whistles in terms of a new kitchen or bathrooms, but the key is well-priced … then I am still finding that there is a good appetite.”
Localities associated with prestige properties have also experienced price declines in the last 90 days. The Manly statistical area, which includes the eponymous Northern Beaches neighbourhood and surrounding inland suburbs, has seen unit prices drop by 12.1 per cent in the last quarter, according to the report.
The Eastern Suburbs-North statistical area, where exclusive neighbourhoods like Bondi, Rose Bay and Vaucluse can be found, recorded a steeper quarterly median house price fall than any other Sydney SA3 area at 9.3 per cent.
Despite the downturn, Sydneysiders are still facing significantly higher prices than they were when rates last peaked 15 years ago , with the city’s median house price still sitting over $1 million higher than it did in September 2011.
Property prices also remain higher than they were in September last year in many other Sydney areas, with the report showing nearly 400 Sydney house or unit markets have recorded at least a slight annual median price increase.
The suburb with the highest median unit price increase since September 2025 is Wahroonga on Sydney’s upper north shore at 25.1 per cent, while the western suburb of Prospect posted the largest house increase of 23.7 per cent.
Ray White chief executive of performance and value Thomas McGlynn says those who have held property long-term in Sydney over the past two or three decades have, by and large, done well off their investment.
“ I think for most people in Sydney, this is a little bit of a blip, and those that can put themselves in a great position to hold onto their real estate will still do well; for those who can upgrade in this market, that’s going to be very, very positive for them,” he says.
“There might be some people who don’t have favourable results at the moment, but, by and large, I think most people who are in a position to be able to hold onto their property and hold onto their real estate are going to do quite well over the course of the next few years.”
McGlynn also says that although recent price figures may not look good for home owners, this period may eventually be remembered as one of the best for buyers.
“I think what we’ll probably see in the years to come, people will look back at this period and see it as one of the great periods to be purchasing good real estate in Sydney,” he says.
Matt Hampson Matt is a Residential News Reporter based at Domain's Sydney office. He writes about the housing market and property issues impacting renters, mortgage holders and Australians hunting for their next, or first,
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