Priced out of Sydney? Here’s where the market is actually moving

Key takeaways

• Sydney is softening, not crashing, with dwelling values down 0.2% over the March 2026 quarter according to the Cotality Home Value Index, April 2026

• Borrowing power remains a major affordability pressure, as higher interest rates continue reshaping what buyers can afford

• Perth, Brisbane and Adelaide are outperforming Sydney, driven by tighter supply, affordability and interstate migration

• More buyers are making geographic trade-offs, reconsidering where they buy rather than whether they buy

• Aussie can help buyers explore options nationwide, with access to brokers, buyer’s agents, conveyancing support and over 4,000 loan products

For years, Sydney property prices stretched borrowing power to its limits. But after a prolonged period of higher interest rates, many buyers are now finding the numbers simply don’t stack up the way they once did.

Even relatively small rate increases can significantly reduce borrowing capacity, changing what buyers can afford and where they can afford to buy.

For some buyers, that has meant reconsidering preferred suburbs, delaying upgrade plans or reconsidering property types altogether.

According to the Reserve Bank of Australia (RBA), the cash rate remains well above the emergency lows seen during the pandemic, continuing to shape affordability across the market.

The RBA’s May 2026 commentary has reinforced expectations that borrowing conditions are likely to remain tighter than many buyers were used to during 2020 and 2021.

At the same time, the market is becoming more divided. While Sydney has cooled, other parts of Australia continue to record strong growth, particularly smaller capital cities and some regional markets.

For many buyers, the conversation is shifting from “Can I still buy in Sydney?” to “Where does my budget now give me more options?”

What’s happening in Sydney’s property market?

Sydney’s property market is cooling, but the data doesn’t point to a crash.

According to the Cotality Home Value Index (April 2026), Sydney dwelling values fell 0.2% over the March 2026 quarter and remain 1.0% below their November 2025 peak.

Nationally, housing growth is also slowing, with dwelling values rising 2.1% in Q1 2026 compared to 2.8% in Q4 2025.

That slowdown reflects a market recalibrating after years of rapid growth and higher borrowing costs.

Importantly, softer conditions are also creating a more balanced environment for buyers than many experienced during the peak competition of 2021 and 2022.

What today’s buyers are experiencing

• More time to compare listings

• Less pressure to rush offers

• Greater room for negotiation

• Improved listing availability compared to recent tighter market conditions

If you’re reassessing your budget, Aussie’s Borrowing Power Calculator can help estimate what you may be able to borrow based on today’s rates and lending conditions.

You might also be interested in: Rates are back near pre-cut levels - How Australians are adapting

Market snapshot: where growth is happening

Sources: Cotality Home Value Index April 2026, Cotality Monthly Housing Chart Pack April 2026, Global Property Guide, Which Real Estate Agent.

Which markets are outperforming Sydney?

Australia’s property market is becoming more varied across regions with different cities responding differently to higher rates, migration trends and housing supply shortages.

Perth

Perth remains one of Australia’s strongest-performing property markets.

According to the Cotality Monthly Housing Chart Pack (April 2026), Perth dwelling values increased 7.3% over the quarter and are up 91.2% over the past five years.

Key drivers include:

• Listing volumes sitting more than 40% below the five-year average

• Ongoing population growth

• Tight rental conditions

Brisbane

Brisbane has continued outperforming many larger east coast markets. The city recorded 5.1% quarterly growth, with dwelling values up 85.3% over five years.

Contributing factors include:

• Stock levels sitting roughly 29% below average

• Continued interstate migration

• Relative affordability compared to Sydney

Adelaide

Adelaide recorded quarterly growth of 3.6%, with dwelling values rising close to 79% over the past five years.

Buyers continue to be drawn to:

• Lower entry prices than Sydney

• Different lifestyle opportunities

• Interstate migration trends supporting demand

Regional markets

Regional Australia continues to show strong long-term momentum.

According to Global Property Guide, regional markets recorded annual growth of 11.1%, compared to 9.6% across capital cities.

Meanwhile, Which Real Estate Agent data shows regional property values have increased 53% over five years, compared to 36.5% across capital city markets.

It’s important to remember that regional Australia is not one single market. Conditions vary significantly between states and local economies.

At the same time, tight rental supply remains a national theme. The Cotality Monthly Housing Chart Pack (April 2026) reported a national vacancy rate of just 1.6%.

Sydney vs interstate: what buyers are weighing up

For many households, the decision is no longer simply financial. Lifestyle, career, family and long-term flexibility all play a role.

You might also be interested in: What younger buyers look for in a home

The questions a smart buyer should be asking

As the market conditions vary more across Australia, buyers are increasingly focusing less on “where everyone else is buying” and more on what makes sense for their own circumstances.

What can I realistically borrow today?

Questions worth asking include:

• Has my borrowing power changed since rates increased?

• What would repayments look like at current rates?

• Would a different loan structure help improve flexibility?

Helpful tools:

• Borrowing Power Calculator

• Repayment Calculator

• Interest Rate Tracker

What trade-offs am I comfortable making?

For many buyers, affordability pressures are influencing where buyers choose to live. That could mean:

• Buying a smaller property in Sydney

• Moving further from the CBD

• Considering Brisbane, Adelaide or regional areas

Am I buying a home or building an investment strategy?

Different goals can lead to very different decisions.

Owner-occupiers may prioritise:

• Lifestyle

• School catchments

• Family proximity

• Long-term stability

Investors may focus more heavily on:

• Rental demand

• Supply constraints

• Affordability metrics

Am I prepared for interstate buying complexity?

Buying interstate can create opportunity, but it can also introduce additional complexity.

Considerations may include:

• Different stamp duty rules

• Different conveyancing requirements

• Varying settlement processes

• Local market knowledge gaps

Support available through Aussie:

• Buyer’s agents

• Conveyancing services

• Aussie Brokers nationwide

What this means for different types of buyers

Different buyer groups are responding to the market in different ways.

You might also be interested in: Fixed rates in focus after RBA move, but fewer borrowers rush to lock in

First home buyers: trading location for entry

First home buyers have been among the most affected by borrowing constraints.

The continued growth seen in Brisbane (+5.1%) and Adelaide (+3.6%) reflects ongoing affordability-driven demand from buyers seeking lower entry points than Sydney.

For some first home buyers, getting into the market may now mean rethinking not just the property, but the location entirely.

Upgraders: recalibrating expectations

Many upgraders are reassessing plans due to higher repayments and reduced borrowing capacity. Some are delaying upgrades, while others are compromising location or property size.

At the same time, Sydney’s softer conditions may provide slightly more negotiating power than buyers experienced during the peak market years.

Investors: responding to tighter rental conditions

Investors are increasingly focusing on markets with tight supply and stronger rental demand.

With the national vacancy rate sitting at 1.6%, many regional areas and smaller capitals continue to face limited rental availability.

Markets such as Perth (+7.3%) and Brisbane (+5.1%), with tighter supply and rental conditions, continue to see stronger investor activity.

Interstate movers: balancing opportunity and complexity

For some Australians, affordability pressures and flexible work arrangements are making interstate moves more realistic.

Regional markets have continued to record strong long-term growth compared to many capital city markets.

But interstate purchases also involve:

• Different tax rules

• Different legal processes

• Different property regulations

The opportunity may be broader geographically, but so is the complexity.

Sources: Cotality Home Value Index April 2026, Cotality Monthly Housing Chart Pack April 2026, Global Property Guide, Which Real Estate Agent.

The case for staying in Sydney

Despite softer conditions, there are still strong reasons many buyers choose to stay in Sydney.

Sydney has historically led recovery cycles following slower market periods. The city also continues to face long-term supply constraints driven by population growth and limited housing availability in established areas.

But property decisions are rarely purely financial.

Many buyers also weigh up:

• Career opportunities

• Family support networks

• Lifestyle preferences

• Community connections

• Schooling considerations

For homeowners staying put, the Aussie App can help track estimated property value, monitor equity and stay across interest rate changes over time.

What this means for your next move

There’s no single right answer in today’s property market, only better-informed decisions, with the right support to help navigate changing conditions.

For some buyers, that may mean waiting. For others, it could mean compromising property type, moving further out or considering a completely different state altogether.

With more than 1,000 brokers across 230+ locations, access to over 25+ lenders** and more than 4,000 loan products, Aussie can help buyers explore home loan and property support options across Australia, whether that’s around the corner or interstate.

Alongside brokers, Aussie also offers access to:

• Access to property listings

• Buyer’s agents

• Conveyancing support

If you’re weighing up your next move, book a free^ chat with an Aussie Broker or find an Aussie store near you.

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