Apartment completions in Sydney’s inner precincts are expected to slow in 2025

• The apartment market in the inner precincts of Sydney show signs of a slowdown in completions. To date, 804 apartments completed in the first quarter of the year.
• We are tracking a further 1,750 apartments that are under construction and due to complete in 2025. Should all projects complete on schedule, the total number of completions for the year are expected to total 2,554 apartments. This equates to a 13.0% decline in apartment completions compared to 2024.

The median capital value for Sydney units has reached AUD 799,990

• Sydney’s apartment market is experiencing growth in both capital values and rents.
• The median unit price has increased 2.6% year-on-year to AUD 799,990, while two-bedroom unit rents have risen 7.7% to AUD 700 per week.

Apartment rents grew 7.7% year-on-year

• This robust performance reflects strong demand and limited supply, particularly in the rental market.
• However, affordability constraints are beginning to slow the pace of rent increases, despite low vacancy rates.

Outlook

• Supply constraints and growing demand are expected to continue to exert upward pressure on both rents and property prices. However, affordability constraints are likely to temper the pace of growth.
• Further, the ongoing affordability issue in capital cities, where detached house prices have become prohibitive for many, is expected to drive demand to more affordable housing options, particularly units, as they offer lower entry points for homeownership, which may see the pace of growth for apartment rents and prices moderately outpace detached houses.