‘It's challenging': Sydney's median house price hits record high $1.7m

Sydney Morning Herald

23-07-2025

'House prices are soaring in western areas which are more affordable for houses, but it's challenging for first home buyers as that's where we are seeing the greatest rates of price growth,' she said.
The strongest house price growth was in the south-west region, up 10 per cent to a median $1.21 million over the year to June.
That was followed by Parramatta, where the median rose 8.8 per cent to $1.45 million.
The outer south-west recorded the strongest median price growth for units – up 6.7 per cent to $570,000. That was followed by more affluent regions including the northern beaches (up 4.4 per cent) and North Sydney and Hornsby (up 4.2 per cent).
Powell said while affluent regions tend to lead price cycles, a surge in more affordable areas in the west is pushing prices up.
'First home buyers are going there, they're using government schemes such as Help to Buy, and they're being supported by a reduction in the cash rate and a boost in borrowing capacity,' she said.
ANZ economist Madeline Dunk said housing affordability would remain a challenge if supply is not addressed.
'Supply and affordability are the long-term factors that are likely to shape the market. They are interlinked in many ways because a lack of supply does tend to drive up prices,' she said.
'Listings aren't particularly strong, so I don't think demand is overwhelmingly strong either. But there's just a lack of supply in the market to support house prices right now.'
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Equilibria Finance managing director Anthony Landahl said rate cuts had given some buyers a false sense of security.
'There's been a shift in sentiment and buyers are looking for opportunities. Their borrowing capacity is up by say $70,000, and while it's not insignificant, it's created an increase in demand in some areas,' he said.
'It's almost like there's concentrated competition in some of the more affordable areas, whether houses or units.'
Landahl said sellers could sense competition is back.
'People are making offers that might have been accepted six months ago when the market was quieter. Vendors are now knocking these back, making counteroffers or deciding to go to auction.'
Annie Li, 29, began looking for a unit in Sydney's inner west in January, and never considered a house.
'I knew it was going to be a unit from the get-go,' the speech pathologist said.
Li hopes to purchase a two-bedroom unit with car space, but after being priced out of Ashfield and Dulwich Hill she is looking in Croydon Park or Earlwood.
'I know that I might have to sacrifice a balcony or an internal laundry in the areas I want,' she said.
Li has noticed a lack of supply and is researching comparable sales and attending auctions.
'As a first home buyer and doing this on my own, it almost feels like you're in the middle of a game where everyone knows the rules except you and you have to fake it until you make it,' she said.
Her buyer's advocate, Inner West Nest's Hamada Alameddine, said some first home buyers are compromising on apartment size, balconies and internal laundries.
'If it's got two bedrooms and a bathroom, an internal laundry is something they can compromise on,' he said.
'Many people want a balcony, but it could cost you an extra $50,000 to $70,000 in some cases, so giving that up puts you in a better position.'