Sydney is the weakest capital city market in the country right now. Values fell 1.4% in July, the largest single-month fall of any capital, and annual growth has turned negative at -2.0%.
Sydney peaked in January 2026 and sits 5.3% below that peak. But the falls are not evenly spread, and where they are not falling is the useful part.
Sydney median house price right now
Cotality’s Home Value Index at 31 July 2026 has Sydney houses at a median of $1,529,308, units at $889,617, and all dwellings at $1,244,617.
The direction across the three timeframes:
| Month | Quarter | Year | |
|---|---|---|---|
| Dwellings | -1.4% | -4.0% | -2.0% |
| Houses | -1.7% | -4.6% | -2.5% |
| Units | -0.8% | -2.5% | -0.6% |
Values are down 5.0% since the start of the year. PropTrack’s separate index has Sydney at -0.6% for July and -1.6% annually, so the two disagree on magnitude but not on direction.
Over five years Sydney has gained 9.5%. Perth gained 85.5% and Adelaide 68.5% across the same period.
Sydney has the lowest yields
Sydney’s gross yield is 3.3% on dwellings and 2.9% on houses, the lowest of any capital city. Units run 4.3%.
Vacancy sits at 1.60% as at June 2026, barely changed from 1.56% a year earlier. Median asking rent is $1,142 a week for houses and $759 for units.
Rents rose 6.5% over the year, which is real, but it starts from a base where a house yielding 2.9% needs an enormous amount of growth to justify itself. At a 4.35% cash rate, that arithmetic does not close on rent alone.
Where Sydney is not falling
Across the three months to July, upper-quartile values fell 3.2% nationally while the lower price tier rose 0.3%. The downturn is concentrated at the top.
Sydney’s western regions show it. The figures below are Cotality’s to 31 July 2026, two months fresher than most suburb data:
| Region | Median | 12m growth |
|---|---|---|
| Penrith | $1,057,034 | +6.1% |
| Campbelltown | $1,000,076 | +5.9% |
| Mount Druitt | $981,168 | +5.4% |
| St Marys | $1,069,324 | +4.5% |
Every one of those is positive while Sydney as a whole is at -2.0%. Cotality expects the worst-affected markets to be higher valued, with heavier investor concentration and more supply, which is a description of the eastern and northern suburbs rather than the west.
Western Sydney is no longer cheap
The west is holding up. It is also no longer cheap, and that is the part investors have been slow to accept.
Suburb medians, with yields computed from median rent against median price so the two reconcile:
| Suburb | Median | Rent | Yield |
|---|---|---|---|
| Campbelltown | $1,017,000 | $620 | 3.17% |
| Mount Druitt | $1,082,000 | $620 | 2.98% |
| Penrith | $1,110,500 | $630 | 2.95% |
| Blacktown | $1,175,000 | $650 | 2.88% |
| St Marys | $1,200,000 | $580 | 2.51% |
There is no entry point under a million dollars in that list, and no yield above 3.17%. Western Sydney was an affordable, higher-yielding alternative to the rest of the city for two decades. On these numbers it is neither.
Medians and growth above are to 31 May 2026, rents to 31 July.
What to weigh up before buying
The trend is still down. Cotality’s stated view is that the most likely outcome in coming months is further deterioration in values nationally. PropTrack says further falls are likely.
Rates went the other way. The RBA raised three times in 2026 and holds at 4.35%, and the Governor kept a tightening bias in July. Any modelling built on cuts needs redoing.
Supply has flipped. Capital city advertised stock is now 5.7% above its five-year average, having been 25.9% below average in January. Auction clearance rates have been under 50% since late May.
Negative gearing changed in the May Budget. Cotality’s read is that modest yield gains will not be enough to encourage purchases of existing property under the new framework. The 2027 negative gearing and CGT changes alter the arithmetic on anything bought now.
Where this leaves a Sydney brief
Sydney at 2.9% house yields is a growth play, and growth has been negative for a year. That is a hard case to put to an investor when other markets are paying materially more rent per dollar invested.
Sydney suits a specific buyer: one with a long horizon, the income to carry a heavily negative position, and a reason to want Sydney exposure in particular. For anyone building a portfolio on cash flow, the numbers point elsewhere, and we buy in every state for exactly that reason.
If Sydney is the market you want, the west is where the data still supports it, and our Sydney buyers agent page sets out how we approach it.
This is general information only and not financial advice. Speak to a qualified professional before making investment decisions.
If you want a view on whether Sydney or another market fits your budget and strategy, book a free discovery call.
Sources
- Median values, monthly, quarterly and annual change, peak dates, yields and the price-tier split: Cotality Home Value Index, August 2026 release, index results as at 31 July 2026
- Corroborating index: PropTrack Home Price Index, July 2026, published 3 August 2026
- Suburb medians and growth: Your Investment Property, CoreLogic data to 31 May 2026. Rents to 31 July 2026
- Vacancy and asking rents: SQM Research, June 2026 and week ending 4 August 2026
- Cash rate: RBA monetary policy decision, 16 June 2026
