PHOTO: Sydney Opera House. FILE
Sydney’s Housing Market is Crashing – Here’s Who’s Getting Hit the Hardest
For decades, Australians have been told that property is the safest long-term investment, but Sydney’s most expensive suburbs are now leading the downturn. If you bought at the peak of the Covid boom, your home may have already lost tens of thousands in value—and it could get worse.
Sydney’s Wealthiest Suburbs Are Losing Value – Fast
In the last three months, Sydney’s median house price has dropped by 1.6%, wiping out $23,968 in value since November. While this might not sound catastrophic, the trend is concentrated in high-end coastal and harbourside suburbs—often a leading indicator of wider market declines.
On the Northern Beaches, Narrabeen’s mid-point house price has fallen by 7.7 per cent during the past year to $2.775million
In exclusive areas like Narrabeen, Vaucluse, and Cronulla, prices have dropped between 7.7% and 8.5% in the past year. The reason? Even Australia’s top 1% of earners can’t afford to buy there anymore.
Prices are falling along the coast from the Northern Beaches to the Sutherland Shire – and the ultra-expensive eastern suburbs in between. (Pictured: Newport on the northern beaches)
Why Luxury Markets Are Falling While Outer Suburbs Boom
Traditionally, mortgage stress hits lower-income areas first, but in 2025, even high-income Australians are struggling to secure loans in Sydney’s top-tier suburbs.
Here’s why:
- Sydney’s median house price is $1.474 million, requiring a $227,000 income to qualify for a mortgage with a 20% deposit.
- At this price point, even high earners are spending over a third of their salary on mortgage repayments—officially in mortgage stress.
- With banks restricting lending to 5.2 times pre-tax income, many buyers are simply priced out of the top end of the market.
As a result, demand is drying up, leaving sellers with fewer buyers and driving prices lower in Sydney’s most expensive postcodes.
Where Prices Are Falling – and Where They’re Rising
🚨 Falling Suburbs (Luxury Markets)
- Vaucluse: ⬇️ 7.8% ($8.334M)
- Narrabeen: ⬇️ 7.7% ($2.775M)
- Cronulla: ⬇️ 8.5% ($2.883M)
📈 Rising Suburbs (Affordable Markets)
- Sydney’s outer south-west is seeing double-digit price growth, as homes remain within reach for buyers securing mortgages.
Sydney house prices have been falling in the wealthier postcodes by the beach, even as they continue to climb in more affordable, outer suburbs
The “Red Rooster Line” and the Housing Divide
A quirky but telling trend: house prices are falling in suburbs without a Red Rooster outlet—a marker of Sydney’s most exclusive areas. Meanwhile, property values are climbing in western suburbs, where incomes are lower but mortgages remain achievable.
What’s Next for Sydney’s Property Market?
The Reserve Bank of Australia holds the key. Until interest rates are cut, lending restrictions will keep limiting buyer demand in high-end areas, continuing to put downward pressure on prices.
For now, luxury homeowners may be in for more pain, while first-home buyers and investors may find better value in Sydney’s growing outer suburbs.
💬 What do you think? Will Sydney’s luxury market keep falling, or is this just a temporary dip?
SOURCE: THE DAILY MAIL