Sydney Property Prices Surpass Salaries Sydney property owners are now out-earning the average Australian wage through house price growth alone. PropTrack’s latest data shows Sydney house prices rose $89,300 in the past 12 months, outpacing the average annual salary of $88,400.
The median house price has reached a new record of $1.602 million, while units have climbed to $868,000. Though Sydney’s price growth (5.11%) lags behind cities like Darwin (11.4%) and Brisbane (10.2%), a renewed boom is expected in 2026, fuelled by rising borrowing capacity and returning buyer competition.
Rodney McLoughlin notes that while Sydney leads in absolute value, momentum is now shifting, with key indicators pointing to accelerated growth ahead.
Rate Cuts, Rising Credit & Bank Competition With three rate cuts delivered this year, mortgage demand is soaring. Credit growth has hit its highest pace in more than two years, and banks are growing their home loan books faster, particularly through government-backed schemes.
The Home Guarantee Scheme—launched October 1—enables first homebuyers to secure loans with just a 5% deposit and no Lenders Mortgage Insurance. It’s expected to be a major demand-side driver in the months ahead. Rodney McLoughlin warns that without a matching boost in housing supply, this will further inflate prices, especially in entry-level segments.
Meanwhile, banks like Westpac and ANZ are leveraging the upswing despite tighter margins, with credit quality holding strong and bad debt charges remaining low.
RBA Holds Steady But Cuts May Come The Reserve Bank held the cash rate at 3.60% at its latest meeting, citing mixed signals: slowing job growth and rising headline inflation (3.0%) due to expiring energy rebates.
While labour market softening gives the RBA flexibility, concerns over inflation keep it cautious. Analysts suggest a possible rate cut in November, depending on upcoming employment and inflation data. Rodney McLoughlin advises clients to stay ahead of the curve and budget for rate swings on both ends.
Affordability Crisis Meets First Homebuyer Reforms The expansion of the 5% deposit scheme is a game-changer for younger Australians. First homebuyers can now purchase a $1M property with just $50,000 saved and avoid up to $25,000 in LMI costs.
But McLoughlin points out the flipside: increased demand without new housing supply adds pressure to prices. Unless land release, planning reform, and construction capacity improve, these incentives may benefit buyers early in the cycle but worsen affordability for others.
The Bottom Line
- Sydney’s property market is still the most expensive in the nation
- Housing credit is surging as banks lend more
- Government schemes are making deposits easier to overcome
- But without supply reform, affordability will remain elusive
Rodney McLoughlin continues to advise buyers and investors to act with clarity, not just confidence. Timing, financial preparation, and long-term perspective are key to navigating this next phase of market momentum.
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. 3 October 2025.
Rodney McLoughlin is a trusted real estate professional with deep insights into the Australian property market. For personalized advice and market expertise, reach out to Rodney today.
