First published 23 Oct 2026, 5:30am
Buyer demand remains depressed, but the market is expected to bottom out in the second half of 2027. Picture: Sam Ruttyn
House prices of $3m will be the norm in major parts of Western Sydney within the next decade if they continue on their recent trajectory, including in some suburbs more than 50km west of the Sydney CBD.
Exclusive modelling by realestate.com.au has revealed the longer term outlook for the market is continued growth, with experts explaining the current downturn is likely to come to an end midway through 2027.
Home prices across Sydney have been falling for close to seven months and are expected to drop further, but economists warned chronic housing shortages and pent up demand would limit how far they could fall.
Sydney prices are currently down about 6 per cent below the level they were last year.
In the short-term, they are predicted to keep falling, with global financial services team Morgan Stanley this week tipping a 10-15 per cent total fall in prices, peak to trough, by the second half of 2027.
“This would be Australia’s largest nominal housing downturn in over 40 years,” the group said.
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But once the market bottoms out, growth in prices could return to a rate similar to the long-term average recorded over the past 20 years – a period marked by booms, corrections and more balanced conditions.
Realestate.com.au modelled what prices would look like in five years and 10 years if the 20-year annual growth rate of each suburb was repeated, showing some of the largest price gains would likely be in the west.
REA Group economist Angus Moore said housing shortages would keep a floor under prices.
REA Group economist Angus Moore said the figures did not represent a forecast but were a useful thought exercise in measuring where the market would soon be if longer-terms trends continued.
He noted that the more affordable prices across Western Sydney, coupled with improving infrastructure, suggested more upside growth.
Suburbs across Greater Western Sydney where house prices would average over $3m by the middle of the next decade were northwest areas Cherrybrook, Carlingford and Castle Hill.
Median house prices above $3m would also appear in Oatlands, in the Parramatta area, while being just shy of $3m in nearby North Parramatta, Ermington, Telopea, Rydalmere and North Rocks.
Further west, on the current fringes of the city, prices were primed to surpass $3m in Londonderry and East Kurrajong.
Up-market acreage suburbs such as Dural, Kenthurst and Glenorie, already home to some of the highest prices in Greater Western Sydney, would also be in the over $3m club.
Kenthurst would top the entire region, with a median house prices of $4.77m. Bella Vista, another upmarket suburb in the Hills, would have a median price of $3.5m.
Prices would average $2.7m-$2.9m in Beaumont Hills, Baulkham Hills, Kellyville, Lidcombe and Westmead, along with Voyager Point, a waterfront suburb on the Georges River in southwest Sydney.
Mr Moore said houses priced under $1m would be rarer over coming years, including across much of Greater Western Sydney – historically a cheaper region.
“Prices will not keep falling forever. We expect them to bottom out next year and as prices grow, more and more suburbs will get pushed out (past $1m),” he said.
Mr Moore said the market would likely bottom out in the second half of 2027.
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He pointed to a short pipeline of new housing projects, strong population growth and potential changes in interest rates keeping a higher floor under prices.
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