Sydney is leading the national downturn. Values fell 1.4% in August, the largest monthly fall of any capital on Cotality’s index. Annual growth is negative at -4.6%.
Sydney peaked in February 2026 and sits 7.1% below that peak. The falls are not evenly spread, though. Some parts of Sydney are still rising.
Sydney median house price right now
Cotality’s Home Value Index at 31 August 2026 has Sydney houses at a median of $1,494,878, units at $878,176, and all dwellings at $1,222,718.
The direction across the three timeframes:
| Month | Quarter | Year | |
|---|---|---|---|
| Dwellings | -1.4% | -4.7% | -4.6% |
| Houses | -1.8% | -5.4% | -5.5% |
| Units | -0.4% | -2.9% | -2.3% |
Values are down 6.7% since the start of the year. PropTrack’s separate index has Sydney at -0.3% for August and -3.6% annually. The two disagree on magnitude but not on direction. Over five years Sydney has gained 5.6%. Perth gained 79.7% and Adelaide 64.0% 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 4.4%. SQM puts vacancy at 1.71% in August 2026, up from 1.38% a year earlier. Median asking rent is $1,143 a week for houses and $755 for units.
Asking rents rose 5.2% over the year. But a house yielding 2.9% still needs a lot of growth to make sense. At a 4.60% cash rate, the rent alone doesn’t come close to covering the loan.
Where Sydney is not falling
Higher-value housing is still falling faster than the lower-priced end, Cotality says. Lower-quartile values are now falling too. The gap between the two has narrowed as the downturn broadens.
Sydney’s western regions show where values are still up. The figures below are Cotality’s to 31 August 2026, two months fresher than most suburb data:
| Region | Median | 12m growth |
|---|---|---|
| Penrith | $1,040,334 | +3.8% |
| Campbelltown | $967,625 | +2.1% |
| Mount Druitt | $947,930 | +1.0% |
| St Marys | $1,031,409 | +0.8% |
Every one of those is positive while Sydney as a whole is at -4.6%. Growth has slowed sharply, though, with St Marys barely above zero.
Western Sydney is no longer affordable
The west is holding up, but it is no longer affordable.
Suburb medians, with yields computed from median rent against median price so the two reconcile:
| Suburb | Median | Rent | Yield |
|---|---|---|---|
| Campbelltown | $1,018,500 | $620 | 3.17% |
| Mount Druitt | $1,072,500 | $628 | 3.04% |
| Penrith | $1,120,000 | $630 | 2.93% |
| Blacktown | $1,171,000 | $650 | 2.89% |
| St Marys | $1,200,000 | $575 | 2.49% |
There is no entry point under a million dollars in that list, and no yield above 3.17%. Sydney houses as a whole yield 2.9%. Yields in the west are now close to the city average, with no premium for buying there. Medians above are to 30 June 2026, rents to 31 August.
What to weigh up before buying
The trend is still down. Cotality expects the market to stay under downward pressure over the coming months. PropTrack says further price falls are likely, particularly across the capital cities.
Rates went the other way. The RBA has raised the cash rate four times in 2026, most recently to 4.60% on 29 September. Any modelling built on cuts needs redoing.
Supply has flipped. Capital city listings in the four weeks to 30 August were 24% higher than a year ago and 8% above the five-year average. Auction clearance rates have held below 50%.
Negative gearing changed in the May Budget. Cotality expects investors to put more weight on higher-yielding property than they did before the 12 May budget. It also says yields would need to rise substantially before rent offsets holding costs. 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, in a market down 4.6% over the 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. They have a long horizon, the income to carry a heavily negative position, and a reason to want to own in Sydney in particular. For anyone building a portfolio on cash flow, the numbers point to other states.
If Sydney is the market you want, the west is where the data still supports it. For units, we screened 151 markets on new supply, vacancy and yield in best Sydney suburbs to buy units. Our page on hiring a buyers agent in Sydney 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, annual and five-year change, peak date, yields, listings and the price-tier commentary: Cotality Home Value Index, September 2026 release, index results as at 31 August 2026
- Corroborating index: PropTrack Home Price Report, August 2026, published 1 September 2026
- Suburb medians: Your Investment Property, CoreLogic data to 30 June 2026. Rents to 31 August 2026
- Vacancy and asking rents: SQM Research, August 2026 vacancy and week ending 20 September 2026 rents
- Cash rate: RBA monetary policy decision, 29 September 2026
