Greater Sydney’s housing market is increasingly divided, with price growth continuing in more affordable suburbs while higher-priced areas experience a slowdown.
Recent data from PropTrack shows Sydney’s overall home prices dipped by 0.3 per cent in December, reflecting a shift in buyer confidence following months of interest rate uncertainty. Although expectations of an imminent rate hike have eased, the earlier impact on sentiment has been enough to moderate activity across many parts of the city.
Premium regions have recorded the most noticeable declines. Sydney’s eastern suburbs saw the median price of all dwellings fall by 2.11 per cent over the final three months of 2025. The north also showed signs of softening, with North Shore values down by an average of 1.31 per cent, while Ryde slipped 0.13 per cent into negative territory over the same period.
In contrast, growth remains strong in Sydney’s more affordable outer regions. The outer west and Blue Mountains recorded the sharpest quarterly rise in the city, with dwelling values increasing by 2.6 per cent. Areas such as Penrith continue to rank among the city’s most accessible markets for both houses and units.
The outer southwest, including Campbelltown and Camden, posted a 1.7 per cent rise in dwelling values, while the broader southwest region, including Liverpool and Fairfield, also recorded steady gains. The Central Coast rounded out the top performers, with values rising 1.59 per cent, reinforcing its position as one of Greater Sydney’s fastest-growing and more affordable markets.
Economists point to a combination of investor activity and first-home buyer demand as key drivers behind the growth in lower-priced areas. With competition intensifying for properties under the $800,000 mark, both groups are targeting the same suburbs, supported in part by government incentives such as the First Home Guarantee Scheme, which allows eligible buyers to enter the market with smaller deposits.
Local agents report that affordability remains the primary drawcard. Buyers who have been priced out of inner and premium suburbs are increasingly willing to compete more aggressively in outer regions simply to secure a foothold in the property market.
At the same time, large-scale infrastructure investment across Western Sydney is boosting investor confidence. Improved transport links, commercial development, and long-term planning are positioning these suburbs as emerging hubs, with expectations of rising rental demand and capital growth in the years ahead.
If you’re considering your next move in the property market, now is the time to explore opportunities in growth-focused and high-demand areas. To discuss your investment property plans, contact Positive Income Properties (PIP) by phone or email. Our team can assist you from start to finish, from strategy and property selection to settlement and long-term portfolio support.
