A market in motion.

The start of the 2026 Sydney property market has laid the groundwork for a busy first quarter, with buyers and sellers prioritising opportunity, quality, and location in their purchasing decisions, according to BresicWhitney.

The transition from late December through January has provided our first read on buyer and seller sentiment for the year ahead. BresicWhitney sales totalled $71 million across January, with 101 new listings coming to market - an 11% increase year-on-year for the month. A 100% auction clearance rate reflects active buyer participation, while the continuation of off-market activity on bw.com.au – 13% of January’s total sales shows – reflects the continued resonance of this method of sale.

Domain's House Price Report (December Quarter, 2025) confirms momentum carried through to year's end. Sydney house prices rose 2.0% to reach a record $1.76 million, with annual growth at 6.4%. Unit prices climbed by 2.1% to a record $844,390 – the strongest quarterly rise in 2.5 years. With average Sydney house prices now more than double the price of units, BresicWhitney expects demand for higher-density housing to remain over 2026.

BresicWhitney CEO Thomas McGlynn expects housing affordability, and economic indicators such as interest rates, to remain the most prevalent theme for buyers and sellers over 2026. With the RBA announcing an interest rate rise today, Mr McGlynn noted the immediate impact on market sentiment. "The increase in rates will place additional pressure on mortgage holders and may pause decision-making among buyers planning to enter the market in the early stages of the year. We'd expect some caution to return as buyers reassess their borrowing capacity and affordability in light of higher repayments."

“In the sought-after lifestyle suburbs of Sydney, the economic settings play a huge role in not only how the market performs, but how buyers and sellers relate to the market," he said. "It influences sentiment and how Sydneysiders think about homeownership, whether that’s a first-time purchase, upsizing or downsizing, investing, or renting. Therefore, interest rates, house prices, suburbs of comparable affordability: all these will remain topical in the Sydney property market this year.”

However, buyers and sellers are familiar with this cycle and its fluctuations, he concluded. "Many are staying close to opportunity and taking a long-term strategic outlook, which supports stability. Sydney's underlying dynamics – tight supply, lifestyle appeal, and strong employment – play an important role in the long-term value proposition of property."

What will drive demand in 2026?

Looking at where buyer activity was concentrated across 2025, properties with certain characteristics are positioned to attract strong interest this year.

Premium family homes continue to demonstrate resilience, most notably those ranging from $5,000,000 and above. Throughout 2025, quality listings in established markets commanded competitive buyer attention, even amid broader market uncertainty. Sales such as 30 Viret Street, Hunters Hill ($12,350,000, Sep 2025) which sold at auction, alongside 30 Beauty Point Road, Mosman ($11,000,000, Nov 2025) and 147 Paddington Street, Paddington ($6,000,000, Oct 25) evidence this appetite for quality homes in established postcodes. While this segment of the market won’t be immune to macroeconomic forces over 2026, buyers will continue to prioritise long-term property value, lifestyle and land size in their purchasing decisions.

Properties with development potential have become increasingly sought-after, particularly in suburbs across the Eastern Suburbs, Lower North Shore and Inner West, with zoning changes allowing for higher-density residential development. With construction costs for new homes remaining elevated - residential building costs rose 3.4% annually, according to the Australian Bureau of Statistics - buyers are recognising the value proposition in purchasing established homes with upside potential. As the NSW Government's housing supply reforms gain momentum in 2026, properties positioned to benefit from planning changes will attract those looking beyond the immediate offering.

Lifestyle amenities, particularly pools and gardens, remain highly coveted by Sydney buyers. Homes across 2025 that commanded strong interest - including 36 Allen Street, Glebe and 3 Dickinson Avenue, Croydon - offered private outdoor spaces, family-focused living, and flexible work-from-home environments. Search data from Domain also affirmed the city’s affection for these features, with searches including key words of “pools” and “granny flats” dominating Sydney property queries throughout 2025. However, the unit market's strong quarterly performance suggests that as house prices reach $1.76 million, some buyers are prioritising entering the market or medium-density options in well-connected locations, that support their lifestyle ambitions.

Views remain a defining drawcard for purchasers and it’s no longer a typical water view that’s in demand: a cityscape, landscape, ocean or harbour view, even from afar, remain highly valuable. “Sydney is globally recognised for its skyline and its natural environment, and collectively as residents, we feel an emotional connection to these. Properties with views remain a real value-add for buyers across all price points and we’re expecting that to remain evident this year,” said Mr. McGlynn. The BresicWhitney sale of 28 Ruby Street Mosman (circa $40m in December 2025) demonstrates this, with its city skyline view supporting competitive interest and appeal from a diverse buyer pool. Homes such as 70 Waterview Street, Balmain, and 79/1 McDonald Street, Potts Point evidence that views command premiums across all market segments.

Rental market conditions solidify   

The rental market has entered 2026 on steadier ground following the legislative reforms introduced in 2025 - including the end of 'no grounds' evictions, easier pathways for pet ownership, and capped rent increases. The year ahead will test whether these protections can coexist with sustained investor participation. BresicWhitney leased 163 properties in January, a 20% increase year-on-year, indicating sustained tenant demand and tight rental supply.

"For property investors, the question remains one of balance," said BresicWhitney's Head of Property Management, Chantelle Collin. "Ownership costs and interest rate settings continue to influence whether investors enter, remain in, or exit the market - and we continue to see a combination of all three. For investors across the lifestyle markets, confidence can be had in strong tenant demand, established amenity, and infrastructure investment including the Metro expansion. 2026 has certainly started with strong enquiry which indicates tenants are actively seeking quality rental stock, particularly in well-connected suburbs."

‘Rentvesting’ – the term for when an individual purchases an investment property and rents elsewhere – continues to gain traction as a strategic pathway for those living in key lifestyle hubs. This trend supports both rental demand in premium lifestyle suburbs and investment activity, and the housing pipeline for tenants across wider Sydney.

Australia's rental market is expected to undergo 4% growth for houses and 5% growth for units nationally across 2026, according to Domain. For Sydney, rental growth is expected to align with national trends, supported by tight vacancy rates and ongoing population growth.

Looking Ahead

With Australia's housing market now having recorded 12 consecutive quarters of price growth (Domain's December Quarter Report), the nation has recorded its longest uninterrupted upwards cycle since in over a decade (2012-2015). Sydney’s house price growth of 6.4% annually, and 3.2% for units, will see the continued appetite for higher-density housing more broadly.

A growing diversification in how properties are bought and sold will remain, particularly off-market, indicating buyers and sellers are staying close to opportunity. It also reflects a market prioritising efficiency, discretion, and direct access to properties, before they reach broader public exposure - further supported by the 20% of BresicWhitney properties sold exclusively on bw.com.au across 2025.