Key Takeaways
- Sydney’s apartment market is experiencing noticeable price declines as buyers retreat due to affordability pressures and a shift in market sentiment, creating new dynamics for Sydney property buyers.
- Suburbs like Ultimo, Darlinghurst, and Eastwood experience double-digit drops in median unit values, presenting opportunities for cautious buyers.
- Investors may still benefit from solid rental demand despite falling purchase prices in oversupplied areas.
- Effective negotiation and strong fundamentals are crucial for navigating a declining market and securing good value.
- Research and adaptability remain key for buyers aiming to take advantage of the shifting market conditions.
Sydney’s apartment market is shifting. For the first time in years, a growing number of buyers are stepping back, resulting in noticeable price declines.
From Ultimo to Darlinghurst, several suburbs have seen double-digit falls in median unit values. For some, this creates nervousness. For others, it opens the door to opportunities not seen in a decade.
Understanding where and why prices are falling is crucial to making informed property decisions in today’s market.
Why Property Buyers Are Retreating in Sydney
Several factors are driving the slowdown:
- Affordability pressures: Sydney remains one of the world’s priciest markets, even after recent falls.
- Oversupply of units: Apartment-heavy suburbs are most affected.
- Market sentiment: Many buyers are cautious, preferring to “wait and see.”
These shifts mean less competition at auctions and more room for negotiation, changing the way buyers approach the market.
Sydney Suburbs Where Prices Fell the Most
Domain’s June quarter 2025 figures show the steepest five-year declines in these suburbs:
- Ultimo: Units $684,000 (–17.6%)
- Eastwood: Units $695,000 (–17.5%)
- Crows Nest: Units $917,500 (–13.4%)
- Darlinghurst: Units $895,000 (–13.3%)
- Leichhardt: Units $845,000 (–11.1%)
- Sydney Olympic Park: Units $671,000 (–11.1%)
- Edgecliff: Units $1,088,000 (–10.3%)
Inner-City Retreat (Ultimo, Darlinghurst, Crows Nest)
These suburbs, long considered desirable for lifestyle and proximity to the CBD, are showing double-digit falls. Dense apartment stock in Ultimo and shifting affordability in Darlinghurst have contributed to softer values.
Lifestyle Suburbs Under Pressure (Leichhardt, Edgecliff)
Both suburbs appeal to professionals and families, but prices are adjusting as buyers resist stretching budgets.
Oversupply Zones (Sydney Olympic Park, Eastwood)
Large apartment developments in these areas have increased supply, driving sharper price declines.
What This Means for Buyers and Investors
The cooling market brings mixed outcomes:
- First-home buyers may find new opportunities in suburbs that were previously unaffordable.
- Investors are seeing rental demand remain solid, even as purchase prices fall.
- Upgraders and downsizers can benefit from softer conditions when making their next move.
The key lies in identifying suburbs where declines may be temporary versus those facing longer-term structural challenges.
How to Approach a Declining Market
Timing the bottom is near impossible, but buyers can still protect value:
- Negotiate firmly: Softer demand often means more flexible sellers.
- Prioritise fundamentals: Properties with good locations, layouts, and transport access will recover faster.
- Be cautious in oversupplied areas: Not all price drops represent good value.
Independent advice and strong negotiation skills can make a significant difference in securing the right outcome.
Sydney property buyers are stepping back, particularly in suburbs such as Ultimo, Darlinghurst, Eastwood, and Crows Nest, where prices have fallen by more than 13%.
For cautious buyers, this trend signals risk. For strategic ones, it marks a chance to secure property in locations that were previously out of reach.
Success in this environment depends on careful research, measured decision-making, and a willingness to adapt to new market conditions through negotiation.
Frequently Asked Questions About Sydney Apartment Market
Which Sydney suburbs saw the biggest property price falls?
Ultimo, Eastwood, Darlinghurst, and Crows Nest recorded the sharpest five-year declines.
Is now a good time to buy property in Sydney?
It depends on your strategy; some suburbs present value, while others face ongoing challenges.
Why are Sydney property buyers holding back?
Affordability pressures, rising interest rates, and oversupply of units are the main drivers.
How should buyers approach a cooling market?
Focus on fundamentals, be cautious in oversupplied suburbs, and negotiate carefully.
Book a Call With One of Our Experts
Paul Mulligan is the Principal Buyers Agent & Expert Negotiator at MULLIGAN Buyers Agents, Sydney. One of only two buyer’s agents in Australia to complete Negotiation Mastery at Harvard Business School, Paul combines advanced negotiation skills with over 30 years of market expertise to achieve outstanding results for property buyers. Passionate about helping clients avoid costly mistakes, he provides expert guidance throughout the buying process from search to settlement.
