Buyers with tighter budgets are driving a noticeable shift in Sydney’s market dynamics. Homes priced under the First Home Buyer Guarantee Scheme cap — up to $1.5M in Sydney — have surged faster than prestige homes, thanks to strong demand from first home buyers and investors alike.
Core data reveals houses in the lower quartile of the market rose 3.4% in the past quarter, outpacing the 1.7% increase in top-tier properties. This trend isn’t new — affordability and lending constraints have steadily redirected competition to mid-market suburbs with family-friendly price points.
The result? Fierce auctions under the cap and increasingly heated buyer competition.
🔍 What This Means for Prestige Buyers & Sellers
While affordable properties gain ground, the upper end of Sydney’s market remains stable, particularly in blue-chip suburbs where limited listings meet consistent buyer demand. Homes with water views, luxury amenities, or architectural appeal are still commanding strong results — but buyers are becoming more selective.
We’re now seeing prestige properties sitting longer on the market unless priced in line with revised buyer expectations.
🏗️ Supply Continues to Choke Demand
Although listings rose slightly this month, they’re still well below what’s needed. New builds are falling short, with NSW tracking more than 70% behind its housing approval targets in key LGA zones. Supply constraints will likely continue to fuel price growth — particularly in tightly held pockets.
đź“Š Migration, Inflation & Market Pressure
Strong migration levels, rising construction costs, and lingering inflation are compounding pressure on buyers. Many first home buyers are panic-buying to beat the crowd, while others are getting priced out of desirable suburbs.
This is not a market for hesitation — and that applies at both ends of the spectrum.
Real Estate Newsletter
This article is a curated summary of various news stories from the past week, offering insights and updates on the real estate market. 14 November 2025.
Rodney McLoughlin is a trusted real estate professional with deep insights into the Australian property market. For personalised advice and market expertise, reach out to Rodney today.
