Sydney buyers have more time to negotiate this spring, yet the city’s housing affordability problem remains severe. Properties are taking longer to sell, some suburbs are accumulating unsold stock, and the gap between house and unit prices has widened. Together, these developments give buyers more choice in parts of the market, but no simple route to an affordable home.
Sydney housing affordability remains a long-term problem
The Committee for Sydney’s 2026 benchmarking report estimates that buying a Sydney home costs 14 times median household income. Of the English-speaking markets it measured, only Hong Kong was less affordable. Sydney has gained transport capacity and retained many of its liveability strengths, but housing costs limit who can share in them.
A softer market does not quickly undo years of price growth. In August, the Reserve Bank reported that Australian housing prices were 1.6% below their March peak, yet still about 50% higher than at the start of the pandemic. Sydney and Melbourne had recorded the largest recent falls. The 1.6% figure is national, not a measure of Sydney’s fall.
Sydney homes are taking longer to sell
Domain figures supplied for this newsletter show a Sydney house sold by private treaty took about 70 days to sell in August, the longest in six years. That measure excludes auctions. Buyers are taking longer to decide, while some owners are holding to price expectations set when conditions were stronger.
The shift is uneven. Well-located, well-presented homes can still attract serious interest; compromised or overpriced properties may need more time or a revised asking price. A long campaign does not reveal the discount a seller will accept, but it gives buyers a reason to check the campaign history and recent comparable sales.
A separate September analysis by FoundIt flagged rising inventory and weaker demand in several Sydney areas, including Parramatta houses, Baulkham Hills and Blacktown units, and houses around Merrylands-Guildford and Fairfield. It reported Parramatta house listings up by roughly a third since May. These are risk indicators, not confirmed forecasts of falls for every property in those areas.
The house and unit divide changes the choices
Research supplied from realestate.com.au shows the median house-to-unit price gap has widened substantially in selected Sydney suburbs over the past decade. In Bellevue Hill, the reported gap reached about $9.4 million. This compares suburb medians; it does not mean two equivalent homes differ in price by that amount.
Scarce house land and additional apartment development help explain why buyers can face very different entry prices within the same suburb. A unit may offer access to a preferred location, though its building condition, strata records, levies, floor plan and likely resale market all matter to its value.
AMP economist Shane Oliver’s price-to-rent analysis, also supplied this week, suggests houses are more stretched than units in many capitals. The measure compares prices with historical inflation-adjusted rents. It is not a prediction that prices will fall by the stated valuation gap.
What does this mean for Sydney buyers and sellers?
Buyers can use longer campaigns and higher local stock to negotiate, provided an offer is grounded in recent comparable sales and the property’s condition. Bargaining power will still vary by suburb, property type and quality.
Sellers should price against today’s competing listings, rather than an earlier peak. A longer campaign can reflect a gap between expectations and what buyers can finance. The RBA held the cash rate at 4.35% in August after three increases this year. Its next scheduled decision is 29 September, and the outcome is not yet known.
The practical lesson is to assess each property and its competition carefully. Sydney’s affordability problem is long term, while negotiating conditions can change street by street and week by week.
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. 24 September 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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