Sydney Ranked Least Affordable Housing Market in the World – What It Means for You

As Director of Cumberland Realty, I wanted to share some important insights from the latest Demographia International Housing Affordability Report – and how it may affect homeowners, buyers, and investors in our local market.

According to the report, Sydney has now officially taken the title of the least affordable housing market in the world, surpassing global cities like Hong Kong, Los Angeles, and San Francisco. The median house price in Sydney currently sits at approximately 14.7 times the average local household income. This ratio places an extraordinary burden on those trying to enter the market, particularly first home buyers, and reflects a significant disconnect between income growth and property values.

A Tough Market for Buyers – But a Resilient One

While this news might appear discouraging to those looking to purchase their first home, it highlights a crucial point: Sydney’s property market remains remarkably resilient and in high demand, even amid economic challenges such as rising interest rates, inflationary pressures, and cost-of-living increases.

Western Sydney and Inner-West suburbs – including Greystanes, Lidcombe, and Marrickville – have demonstrated consistent capital growth over recent years. These areas continue to attract strong buyer and investor interest due to their proximity to transport, lifestyle amenities, multicultural communities, and evolving infrastructure.

As a real estate professional with deep local knowledge, I’ve seen firsthand how these suburbs are becoming hotspots for both families and investors who are seeking relative value in an otherwise expensive city.

What Does This Mean for You?

If you’re a property owner:
The current climate suggests that your asset is gaining value. Even with broader economic uncertainty, property in Sydney has proven to be a strong performer over the long term. Rising property values help build equity, which can be used to refinance, renovate, or invest further.

If you're considering investing:
Sydney’s affordability crisis is likely to fuel continued demand in the rental market, especially from those who are unable to buy. This creates opportunities for investors to secure solid rental returns, particularly in suburbs with good transport links, schools, and employment hubs. Areas like Greystanes and surrounding suburbs are already seeing high demand from renters seeking affordability and space.

If you’re a first home buyer:
It’s important not to lose hope. While prices are high, there are still entry-level opportunities in emerging areas and government incentives available for eligible buyers. Engaging a local agent who understands your goals can help uncover off-market or early-stage opportunities before they hit the wider market.

Why Prices Are So High – And May Stay That Way

Sydney’s affordability crisis is being driven by several key factors:

• Supply constraints: There remains a chronic shortage of new housing due to planning bottlenecks, high construction costs, and labour shortages.

• Population growth: Net overseas migration has returned to strong levels post-COVID, increasing demand for both rentals and housing stock.

• Land scarcity: Sydney is geographically constrained, limiting the ability to expand new housing at scale, particularly close to the CBD and established suburbs.

• Interest rate pressures: While rates have risen, many owners are holding on, reducing listings and intensifying competition for quality homes.

These fundamentals suggest that demand will remain strong well into 2025 and beyond, particularly in areas offering good value relative to the broader market.

Final Thoughts

Sydney’s ranking as the world’s least affordable housing market is a headline worth paying attention to — not just because of the challenges it presents, but also because of what it reveals about the strength, resilience, and long-term appeal of Sydney real estate.

Whether you're a homeowner, landlord, investor, or aspiring buyer, understanding these trends will help you make informed decisions. At Cumberland Realty, we’re committed to helping you navigate the market with confidence.

If you'd like to know more about your property's value, discuss a potential investment, or need tailored advice, feel free to reach out.

Warm regards,
Fran Luccitti
Director & Licensee-in-Charge
Cumberland Realty