Domain released its Q2 house price report last week, which showed that the median Sydney house was valued at an extraordinary $1,722,443 at the end of June, up 2.6% over the quarter and 4.2% year-on-year.
This was the fastest quarterly rise in two years and the third straight gain in median house prices.
Sydney unit prices also rose by 1.5% ($12,610) in Q2 2025 to a record $834,791, the strongest quarterly gain in 15 months.
A decade ago, Sydney’s median house price was around 70% lower at approximately $1 million, and two decades ago, it was about 220% lower at roughly $550,000.
Sydney’s median asking rents are also the highest in the nation at $780 for houses and $740 for units as of Q2 2025.
Last month, Mark Litwin, Head of Investment Sales (NSW) at Knight Frank, published a report on Sydney’s housing market fundamentals, which are supported by “persistent undersupply”.
“Sydney’s most powerful tailwind remains its chronic housing shortage”, Litwin argued. “Population growth—fuelled by the return of overseas migration—has outpaced dwelling completions for much of the past decade”.
“The result is an imbalance that continues to support pricing across almost every residential submarket”.
“Rental vacancy hovers near historic lows; median house prices, despite cyclical fluctuations, remain among the highest in the world”, Litwin.
Litwin’s diagnosis is reinforced by the most recent forecasts from the National Housing Supply and Affordability Council (NSAC), which predict that New South Wales will fall short of its agreed-upon housing objective by 130,000 over the next five years.
The reality is that excessive net overseas migration is the primary cause of New South Wales’ housing shortages.
In 2024, New South Wales’ population increased by 108,000 individuals, owing nearly entirely to net overseas migration of 106,700.
In the decade leading up to December 2024, NSW’s population increased by 983,000, with net overseas migration accounting for 882,000 (88%) of the increase. Migrants bearing children also drive net births in NSW.
Given that net overseas migration is the primary cause of the state’s housing shortfall, the state government should recommend that the federal government reduce immigration to reasonable, sustainable levels that are readily absorbed.
Every other policy solution is a sideshow.
High migration will never resolve the state’s housing crisis, and young, prime Sydneysiders will continue to leave.
