Sydney New Apartment Market Report | Spring 2026

The Sydney new apartment market enters Spring 2026 against a backdrop of constrained supply, steady apartment pricing and continued rental demand. While the development pipeline remains significantly below historical levels, population growth, tight rental conditions and an undersupplied housing market continue to support demand. New apartment prices have remained resilient despite broader market challenges, with limited future supply expected to remain a key factor shaping Sydney's property market over the coming years.

Market snapshot

Sydney's new apartment pipeline remains well below historical averages, with the annual average supply due for completion between 2026 and 2029 tracking 37% lower than the previous five-year average. A total of 37,928 apartments are forecast to be completed by the end of 2029, averaging 9,482 apartments per year. In 2026, 8,578 new apartments are expected to be delivered. Two-bedroom apartments continue to dominate future supply, accounting for 53% of the current pipeline.

New apartment prices

New apartment prices across Sydney increased 1.3% over the year to Q2 2026, reaching an indicative average of $16,100 per square metre. While prices declined 0.6% during the quarter, the market has remained relatively stable, supported by limited supply. Sydney's inner suburbs recorded the strongest annual growth, with average new apartment prices increasing 3.9% to $21,300 per square metre.

Residential property market

Sydney residential property prices remain above year-ago levels despite recent softening. Median residential values increased 3.1% over the year to Q2 2026, reaching $1.26 million, although values declined 2.9% during the quarter. Looking ahead, McGrath Research forecasts Sydney residential property prices will decrease by 9% by the end of 2026, followed by a further 3% decline in 2027.

Rental market performance

Rental conditions remain tight across Sydney, with vacancy rates recorded at just 1.8% in Q2 2026, well below balanced market conditions. Median rents increased 6.2% over the year to reach $775 per week, supported by ongoing housing undersupply and tenant demand. McGrath Research forecasts rents will rise by a further 5% by the end of 2026 and continue increasing in 2027.

Economic drivers

Several factors continue to influence Sydney's new apartment market. Population growth remained solid at 1.4% in 2025, while unemployment was recorded at 4.1%. Construction costs increased 4.6% over the year, while the delivery of new homes remained below previous levels. These conditions continue to place pressure on housing supply and support demand for both established and new apartment stock.

Outlook for Sydney new apartments

Sydney's new apartment market is expected to remain supported by ongoing housing undersupply and a significantly reduced development pipeline. While broader residential property prices are forecast to soften, constrained apartment supply, population growth and tight rental conditions are likely to continue supporting demand for quality new housing. Explore the full Spring report for detailed insights into apartment supply, pricing, rental performance and the key drivers shaping Sydney's new apartment market.