Sydney property prices are falling, rents remain under pressure and borrowing costs have risen again. That combination is creating more choice for buyers, while making affordability harder to judge from the asking price alone.
The Reserve Bank increased the cash rate to 4.85% on 3 November. Alongside Westpac’s forecast of further national price falls and fresh evidence that Sydney homes are taking longer to sell, the decision reinforces the need for realistic pricing and current finance.
Sydney property prices face higher rates
The RBA’s latest decision lifted the cash rate by 0.25 percentage points. Its updated outlook puts inflation above the target range until late 2027, while acknowledging slowing economic activity and significant housing price falls.
For buyers, a lower purchase price can be partly offset by higher borrowing costs. Reconfirm your lending limit and repayments before negotiating, particularly if your approval was assessed before the latest increase.
The REA report published on 2 November puts Sydney dwelling prices down 0.4% in October and 6.6% over the year. Houses recorded a larger annual decline of 8%, compared with 2.9% for units.
Some apartment markets are reportedly below their 2021 levels. That does not mean every Sydney property has returned to 2021 pricing. Location, building quality, land and the type of home remain central to any comparison.
Westpac forecasts further falls
Westpac’s latest outlook forecasts a national dwelling-price decline of 10.9% from the March 2026 peak to March 2027. This is a projected total fall across that period, rather than another 10.9% decline from today, and it is not a Sydney-specific prediction.
The bank’s full-year results also warn that interest rates are likely to remain elevated into 2027. Its $6.8 billion statutory profit sits alongside uneven conditions for households and businesses; the bank’s profitability does not establish how much further property prices will move.
Forecasts help frame risk, but they cannot identify the bottom for an individual property. Buyers still need recent comparable sales and a budget that allows for holding costs, repairs and unexpected expenses.
Homes take longer to sell
Fresh SQM Research listings data adds an important detail to the downturn. Sydney’s advertised stock rose 9.3% in October to 42,699 properties, with listings more than 180 days old up 41.6% over the year.
New listings remained below October last year. The build-up therefore reflects homes remaining unsold, rather than simply a rush of new sellers.
For buyers, a long campaign is a reason to investigate the vendor’s position and revisit comparable sales. It does not automatically make the property a bargain. For sellers, pricing against today’s competing listings and recent results is more useful than relying on a valuation from a stronger market.
Rental pressure persists
The supplied rental report puts Sydney’s median weekly rent at $800 at the end of the September quarter, with increases across many suburbs but falls in others.
Falling sale prices and rising rents can occur together because the markets serve different immediate needs. More homes advertised for sale do not necessarily mean more rentals are available.
The timing of rent increases alone does not establish that tax reforms caused them. Nor can total observed rent growth be compared directly with a forecast of the additional effect of one policy change.
Investors should assess achievable rent alongside interest, strata levies, maintenance, insurance and vacancy. Higher rent can help cash flow, but it does not guarantee a positive return.
My view: this market rewards preparation. Use the extra choice to inspect carefully, negotiate from evidence and buy a property you can comfortably hold.
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. 5 November 2026
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.
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