M:
Research
Spring/26 Sydney Prestige Residential
Headlines Sydney recorded a lower number of prestige residential sales over the past year, whilst homes are taking less time to sell than one year ago.
The number of residential rental homes in Sydney is currently undersupplied. Sydney rental vacancy was recorded at 1.8% at the end of Q2/26.
Less Sydney homes have been newly listed for sale than this time last year. Overall, the total number of homes listed for sale in Sydney is up on last year.
Prestige residential rents across Sydney trended 10.8% above last year's weekly rate, with prestige rents forecast to rise 8% at the end of 2026.
Sydney prestige prices have trended 0.1% lower than a quarter ago, with 2.8% lower annual growth. Price change of -6% is forecast by the end of 2026.
The construction delivery of new homes in NSW was 1.5% below a year ago, whilst the cost to build in Sydney escalated 4.6%.
Economy Key drivers
Interest rate
Spring/26
4.35%
Interest rates were last set at 4.35% after the Reserve Bank of Australia (RBA) lifted the cash rate target by 25 bps in May 2026. At this time, most lenders adjusted their mortgage lending rates for homeowners and investors accordingly. By setting borrowing costs, interest rates strongly influence both housing affordability and demand for home loans. Westpac forecasts the cash rate target to be 4.60% by the end of 2026 and 4.10% in 2027, with inflation, energy costs and the global economy being closely monitored as a leading indicators for any possible adjustments during this time.
Stock market return
+2.1%
Economic growth
Australia recorded annual economic growth of 2.1% at the end of Q2/26, following a five year annual average performance of 2.2%. A growing economy fuels the property market by generating employment, lifting household incomes and strengthening overall demand. In general, sustainable annual economic growth is viewed as trending between 2% and 3%. Looking forward, Westpac forecasts economic growth of 1.5% by the end of 2026 and 1.7% in 2027.
+2.8%
Ultra-high-net-worth population growth
The stock market has returned sustainable annual growth. Australia’s stock market performance on the S&P/ASX 200 saw total growth of 2.8% over the past year, although the last quarter recorded growth of 3.5% in Q2/26. Looking back, the five year average return was 4.0%. Historically, strong stock market performance has been a leading indicator for future wealth creation and potential upside for prestige residential property, though current global uncertainty suggests a more cautious stance.
+12.2%
The ultra-high-net-worth (UHNW) population across Australia continues to expand despite the world adjusting to renewed, geopolitical uncertainty and ongoing inflationary pressures. Australia’s ultra-wealthy population grew by 32.5% between 2021 to 2026, to 16,460 people with net wealth of more than US$30 million. This population is forecast to grow by a further 58.5% by the end of 2031 (or an average 12.2% per year) when almost one in every thousand Australians will be considered an UHNW individual. According to the Knight Frank Wealth Sizing Model, Australia is considered to be the fifth fastest forecast during this time.
Economic outlook, Q2/26
2021
2022
2023
2024
2025
2026F
2027F
Interest rate target
0.10%
3.10%
4.35%
4.35%
3.60%
4.60%
4.10%
Economic growth in Australia
4.9%
3.3%
1.3%
1.2%
2.6%
1.5%
1.7%
Business investment in Australia
8.8%
6.2%
8.9%
0.4%
7.0%
4.3%
3.2%
Source: McGrath Research, Knight Frank Research, RBA, ABS, Westpac
2
Prestige residential sales Update
Prestige sales
Spring/26
-19%
Rolling tally of annual prestige residential sales Sydney prestige ($5m+)
Sydney recorded a lower number of prestige residential sales above $5 million over the past year. Sales trended down 19% with a total of 1,323 transactions in the year ending Q2/26, being outpaced by the five year annual average of 1,413 sales. Sales activity tends to shift with interest rate movements and changes in economic confidence, whilst ongoing global uncertainty continues to influence decisionmaking. Isolating the 310 sales in the Q2/26 quarter, this was 26% below the previous quarter whilst lower than the 342 five year quarterly average.
Source: McGrath Research
Super-prestige sales
30%
The share of super-prestige sales (above $10 million) was recorded at 30%, after analysing the total number of prestige sales (above $5 million) across Sydney in the year ending Q2/26. This was higher than one year ago when the proportion was 24%, and remains above the 24% share recorded five years ago. Over the past year, Sydney’s super-prestige sales volume has increased by 2%, and grown by 44% over the past five years.
Share of super-prestige sales ($10m+), by number Sydney prestige Source: McGrath Research
Sydney prestige, Q2/26
Houses
Apartments
Residential
Number of homes ($5m+) sold in past quarter
252
58
310
Change from a quarter ago
26%
26%
26%
Number of homes ($5m+) sold in past year
1,105
218
1,323
Change from a year ago
-19%
-14%
-19% Source: McGrath Research
3
Prestige residential sales Update
Sales velocity
Spring/26
-1 day
Average days on the market Sydney prestige
Sydney prestige homes are taking less time to sell than one year ago. Prestige homes across Sydney averaged 41 days on market in the year ending Q2/26, from the time they were listed to the day they went under contract. This duration was 43 days a quarter ago (-2 days) and 42 days one year ago (-1 day). A lower number of days on market typically indicates that homes are selling more quickly, often reflecting strong buyer demand and well‑priced, desirable properties. In contrast, a higher number of days on market may signal slower buyer activity. Looking back over the five-year average, it has taken 40 days to sell a home.
Source: McGrath Research
New listings Sydney
-8.2%
+12.4%
Total listings Sydney
Less Sydney homes have been newly listed for sale than this time last year. Newly advertised listings in Sydney were 8.2% lower in the month of June 2026 than the equivalent period last year, according to Cotality. This change in new listings trended below the Australian average of 2.1% and below the 2.0% across Australian capital cities.
Overall, the total number of homes listed for sale in Sydney is up on last year. Sydney's total number of listings in the month of June 2026 were 12.4% above the equivalent period last year, according to Cotality. By comparison, the Australian average change for total listings was 8.4% and across Australian capital cities was 15.9%.
Sydney prestige, Q2/26
Houses
Apartments
Residential
Number of days homes on market
37 days
47 days
41 days
Change from a quarter ago
-1 day
-3 days
-2 days
Change from a year ago
+0 days
-1 day
-1 day Source: McGrath Research
4
Prestige residential prices Update
Prestige prices
Spring/26
-2.8%
Tracking prestige prices Sydney prestige
Sydney residential property prices have trended lower than a year ago across the prestige market. Sydney prestige property prices fell by 2.8% in the year ending Q2/26, with a fall of 0.1% recorded in the last quarter. Looking back at price growth since Q2/21, prestige houses (8.7%) were outpaced by prestige apartments (11.9%) over the five years. In Q2/26, prestige house prices were lower by 0.4% and lower by 3.7% on the previous year. In the same quarter, prestige apartment prices rose by 0.1% after declining 1.6% in the past year. Annual residential price growth has averaged 2.1% over the past five years.
Source: McGrath Research
Prestige price outlook
-6%
Forecast for prestige prices Sydney prestige
Looking ahead, Sydney residential prestige prices are likely to fall over the coming year. McGrath Research forecasts Sydney prestige residential prices to compress by 6% by the end of 2026, followed by price stability in 2027. Factors taken into consideration include the projection of a challenged economy and business environment, a solid performing stock market, anticipated pressure on the interest rate target, as sales volume remain stable.
Source: McGrath Research
Sydney prestige, Q2/26
Houses
Apartments
Residential
Price change from a quarter ago
-0.4%
0.1%
-0.1%
Price change from a year ago
-3.7%
-1.6%
-2.8% Source: McGrath Research
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Prestige residential rents Update
Prestige yield
Spring/26
+43 bps
Gross rental yield Sydney prestige
Sydney prestige gross rental yields have trended higher over the past year. Residential gross rental yields rose 4 bps in the Q2/26 quarter to be 3.01% across the Sydney prestige market, whilst being 43 bps more than a year ago. Gross rental yields are a good initial measure of comparing the return of a property investment before expenses are deducted. A yield greater than 3% tends to be considered most desirable for prestige properties located in capital cities, while below this, tends to indicate high property prices relative to rent, or low rental demand. Gross rental yields have averaged 2.50% over the past five years.
Source: McGrath Research
Vacancy
1.8%
Residential rental vacancy Sydney
The number of residential rental homes in Sydney is currently undersupplied. Sydney rental vacancy was recorded at 1.8% at the end of Q2/26, changing 0 bps in the quarter whilst rising 10 bps over the past year according to REIA. Generally, around 3% vacancy is considered a balanced market between rental supply and demand. Below this equilibrium is considered to be an undersupplied pool of rental homes, which places upward pressure on weekly rents. For the past five years, Sydney residential rental vacancy has averaged 1.9%.
Source: McGrath Research, REIA
Sydney prestige, Q2/26
Houses
Apartments
Residential
Gross rental yield
3.26%
2.71%
3.01%
Change from a quarter ago
+6 bps
+1 bp
+4 bps
Change from a year ago
+60 bps
+21 bps
+43 bps Source: McGrath Research
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Prestige residential rents Update
Prestige rents
Spring/26
+10.8%
Tracking prestige rents Sydney prestige
Residential rents across Sydney trended above the weekly prestige rate recorded a year ago. Sydney prestige property rents rose by 10.8% in the year ending Q2/26, with a rise of 1.0% recorded in the last quarter. Looking back at rental growth over the five years since Q2/21, prestige apartments (74.5%) outpaced prestige houses (48.7%). Prestige apartment rents in Q2/26 were 0.7% above a quarter ago, and were 6.1% higher over the year. In the same quarter, prestige house rents rose by 1.2% after rising 14.7% in the past year. On average, over the past five years, prestige rents grew 10.0% per year.
Source: McGrath Research
Prestige rental outlook
+8%
Forecast for prestige rents Sydney prestige
The Sydney prestige residential market is continuing to experience upward pressure on weekly rents. Only a modest number of new homes have been built in Sydney, reducing the share of prestige rental homes available as the city continues to attract a large portion of the country’s wealthy population. As a result, McGrath Research forecast there will remain upward pressure on rents of 8% at the end of 2026, with a further 4% rental growth likely in 2027.
Source: McGrath Research
Sydney prestige, Q2/26
Houses
Apartments
Residential
Rental change from a quarter ago
1.2%
0.7%
1.0%
Rental change from a year ago
14.7%
6.1%
10.8% Source: McGrath Research
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Definitions
Prestige property The most desirable and most expensive property in a given location, generally defined as the top 5% of each market, by value. Prestige sales Sydney prestige sale transactions hold a threshold of A$5 million. Super-prestige sales Sydney super-prestige sale transactions hold a threshold of A$10 million. UHNWI An ultra-high-net-worth individual (UHNWI) is someone with a net worth of US$30 million or more.
Guiding you home
Michelle Ciesielski National Head of Research, McGrath Research www.mcgrath.com.au/research
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