This month, Sydney’s property market was shaped by debates over stamp duty reform, rising affordability pressures, and evolving dynamics between construction costs, buying activity, and rental demand. Analysts and economists highlighted both the challenges of affordability and the opportunities that shifting conditions may create for buyers, investors and policymakers. The following summaries highlight ten of the most significant stories influencing the market in September 2025.

Stamp Duty Burden Near-Tripled in a Generation

https://www.domain.com.au/news/how-the-stamp-duty-burden-near-tripled-in-a-generation-1414136/

New research by Domain has revealed that the cost of stamp duty in Sydney has soared dramatically compared to household incomes over the past 25 years. In 2000, stamp duty on a median-priced house equated to 44.5 per cent of gross household disposable income per capita, but by 2024 this had jumped to 119.7 per cent, with a typical bill of $74,005. Similar patterns were observed in Melbourne and Brisbane, where stamp duty rose much faster than incomes. Experts including Domain’s Dr Nicola Powell and the e61 Institute’s Dr Nick Garvin warn that stamp duty distorts the housing market by discouraging mobility, pushing people to renovate rather than move, and penalising younger buyers more heavily than previous generations. Economists argue that a switch to a broad-based land tax could provide a fairer alternative, but such a reform would require transitional support and faces political challenges. The ACT’s gradual phase-out of stamp duty is being closely watched as a test case, although experts note the political sensitivity of annual land tax bills compared to one-off charges at purchase.

A group of Paddington terraces

Wentworthville Swimming Centre with Parramatta in the background; around the corner from Girraween

Girraween: Sydney’s Closest Suburb Under $1 Million

https://www.domain.com.au/news/girraween-the-closest-suburb-to-sydneys-cbd-for-under-1-million-is-24km-away-1408376/

Girraween, 24 kilometres west of the CBD, is the nearest Sydney suburb with a median house price below $1 million, currently sitting at $976,250 according to Domain’s latest report. Prices have risen by 5.8 per cent in the past year and more than 30 per cent over five years, with agents predicting the suburb will soon break the $1 million threshold. Townhouses dominate the market, typically priced between $750,000 and $950,000, which has helped keep the overall median lower than neighbouring areas such as Parramatta and Toongabbie. Agents including Lekita Maitland, Matt Mazzei and Abhi Pandey note that free-standing houses in good condition now sell closer to $1.2–$1.5 million, while townhouses aged five to 20 years with three bedrooms and two bathrooms remain the most common sub-$1 million option. With demand fuelled by quality schools, community appeal and limited housing supply, experts believe it will soon become increasingly difficult to secure anything other than a unit in Girraween for under $1 million.

Houses Taking Longer to Sell Despite Rate Cuts

https://www.domain.com.au/news/three-interest-rate-cuts-later-houses-are-taking-longer-to-sell-than-last-year-1414044/

Despite three interest rate cuts and consumer sentiment reaching its highest point in more than three years, Domain data shows that houses across most capitals, including Sydney, are taking longer to sell than 12 months ago. Auction clearance rates remain strong – Sydney recently reached 75 per cent and Melbourne 70 per cent – but analysts say the lag in sales data reflects rapidly shifting conditions. Ray White economist Nerida Conisbee suggests homes may be overpriced, with vendors buoyed by rising sentiment, while Domain’s Dr Nicola Powell notes that it takes time for market momentum to filter through. Some expensive areas, such as Manly and Pittwater, are among the slowest-selling, while more affordable regions like Marrickville-Sydenham-Petersham and St Marys are moving much faster. Agents on the ground, such as Michael Richardson in Melbourne, observe that motivated buyers are keen to purchase before competition intensifies, though overpriced listings continue to linger. Experts agree that if stock remains low, properties will likely start selling more quickly by year’s end, with Sydney and Melbourne expected to lead the recovery.

Rents for Modest Apartments Surge Amid Crisis

https://www.domain.com.au/news/the-modest-type-of-housing-where-rents-have-soared-1417290/

Rents for one-bedroom apartments have soared across Australia, with Sydney’s median asking rent now $675 per week – up from $470 a decade ago – according to Domain. Similar steep rises have been recorded in Melbourne, Brisbane and Perth, driven by population growth, a shift towards smaller households, and the return to office-based work. Domain’s Dr Nicola Powell explained that rents remained steady until the pandemic, when demand and restricted supply pushed costs up sharply, while wages have failed to keep pace. This has left many renters struggling to save for a deposit, often relying on family support or moving back home. SQM Research’s Louis Christopher noted that while extreme annual increases may ease, rental prices remain significantly elevated, and many tenants are now considering buying with government assistance. However, advocates like Maiy Azize from Everybody’s Home warn that the situation is devastating for low-income renters, forcing them to cut essentials or move further away, and call for investment in social housing and caps on rent hikes to provide stability.

REIA Welcomes Early Start to First Home Guarantee Scheme

https://www.therealestateconversation.com.au/news/2025/08/25/reia-welcomes-early-start-first-home-guarantee-scheme/1756079125

The Real Estate Institute of Australia (REIA) has praised the federal government’s decision to fast-track the expansion of the First Home Guarantee Scheme, now commencing in October instead of January 2026. The program allows eligible first home buyers to purchase with a five per cent deposit without paying lender’s mortgage insurance, while also lifting income caps and property thresholds to better reflect market conditions. REIA president Leanne Pilkington described the move as a practical response to affordability pressures, estimating it will help 70,000 buyers in its first year. She stressed, however, that support for first-time buyers must be matched by measures to boost supply, noting the government’s commitment to deliver 100,000 homes exclusively for this cohort. Pilkington also highlighted the importance of reducing regulatory barriers in planning and approvals to accelerate new housing delivery, arguing that a balance between easing financial entry barriers and increasing housing stock is central to addressing Australia’s affordability crisis.

Buying Still Cheaper Than Building – But Gap Narrowing

https://www.therealestateconversation.com.au/news/2025/08/25/it-still-cheaper-buy-than-build-only-just-ray-white/1756074865

Ray White chief economist Nerida Conisbee reports that while it remains cheaper to buy established homes than to build new, the gap between house price growth and construction cost inflation has narrowed significantly since 2023. Nationally, construction costs have risen 35 per cent over four years compared to a 32 per cent rise in house prices – down from a 16 percentage point gap identified in late 2023. Perth, Adelaide and Brisbane now show house prices outpacing construction costs, making new builds more viable, with Perth recording a 66 per cent house price rise against a 56 per cent cost increase. In contrast, Sydney, Melbourne and Canberra remain constrained, with construction costs far exceeding modest house price growth – just 4 per cent in Melbourne against a 25 per cent cost rise. Conisbee argues these diverging trends will shape housing supply: western and northern capitals may see renewed construction activity, while the eastern capitals face ongoing affordability and supply challenges. Despite current economics favouring buying, she notes the shift marks the first real progress towards improving national housing supply in years.

Claiming Depreciation Could Save Investors Thousands

https://www.realestate.com.au/news/a-beginners-guide-to-investment-property-depreciation/

Property investors who fail to claim depreciation may be missing out on thousands in tax deductions each year, experts warn. Depreciation allows investors to offset the wear and tear of a property against taxable income, split between capital works (the structure) and plant and equipment (fixtures and fittings). According to Washington Brown’s Tyron Hyde, brand new two-bedroom units can generate $20,000–$25,000 in depreciation deductions in the first year alone, compared with about $8,000 for a two-year-old property. Rules changed in 2017 restrict claims on plant and equipment for second-hand properties, although older purchases remain grandfathered. MCQ Quantity Surveyors’ Mike Mortlock explains that each asset has an “effective life” set by the ATO, which determines depreciation calculations. While higher construction costs have pushed up depreciation values, both Hyde and Mortlock caution that depreciation should be treated as a financial bonus rather than an investment strategy. They stress that the fundamentals of a property should drive purchasing decisions, with depreciation serving as “the icing on the cake.” Engaging a quantity surveyor and seeking financial advice are recommended to maximise eligible claims, particularly when renovating or buying recently renovated homes.

Paddington’s Enduring Appeal as a Lifestyle Suburb

https://www.domain.com.au/news/why-paddington-is-one-of-sydneys-most-desirable-neighbourhoods-1416011/

Once known for its artisans and creatives, Paddington has transformed into one of Sydney’s most desirable neighbourhoods, blending historic terrace charm with cosmopolitan living. The suburb now attracts a wide demographic, from billionaires to studio apartment dwellers, drawn by its village atmosphere and vibrant community. Local fixtures like Paddington Markets, Oxford Street retail and dining, and William Street’s boutiques and wine bars sustain its cultural vitality, while hospitality group Merivale’s investment has reinvigorated the area’s dining and nightlife. With a median house price of $3.675 million, prestige sales regularly exceed $10 million, but the suburb remains diverse in offerings, from period terraces to compact apartments. Long-time residents highlight the strong sense of community and support among local retailers, while landmarks such as Trumper Oval and the bustling Fiveways intersection add further appeal. As agent Ben Collier notes, demand is no longer confined to Woollahra’s end of Paddington, with the Boundary Street precinct also surging in desirability, reinforcing the suburb’s standing as a lifestyle hub in Sydney’s east.

Hundreds of Disability Homes Left Empty Under SDA Scheme

https://www.abc.net.au/news/2025-08-25/specialist-disability-accommodation-sda-empty-homes-four-corners/105685946

An ABC Four Corners investigation has revealed that more than 1,000 purpose-built Specialist Disability Accommodation (SDA) homes across Australia remain vacant, despite billions in investment and significant unmet housing need. Designed to provide people with profound disabilities an alternative to group homes or aged care, the scheme attracted private investors with promises of high rental returns. However, many properties were built in outer suburban areas with limited amenities, making them unsuitable for potential tenants. Families like Tony Wilson’s, who borrowed heavily to invest in SDA, are now facing financial ruin as they struggle to find eligible tenants. Experts including SDA Alliance CEO Jeramy Hope and consultant Brent Woolgar argue that poor planning, a lack of NDIA transparency, and weak regulation have led to oversupply in some areas while demand elsewhere goes unmet. Although success stories exist – such as Gold Coast resident Bruce Camplin, whose SDA apartment transformed his independence – the broader program risks being labelled a “market failure.” Advocates warn that unless regulation, data transparency and community housing engagement improve, a once-in-a-generation opportunity to deliver meaningful housing outcomes for people with disabilities may be squandered.

Building Beats Buying in Select Capitals

https://www.realestate.com.au/news/revealed-the-capitals-where-building-beats-buying/

Ray White chief economist Nerida Conisbee reports that, for the first time in years, house price growth is outpacing construction cost inflation in some capitals, creating conditions more favourable for new builds. Nationally, construction costs rose 35 per cent between 2021 and 2025, while house prices increased 32 per cent, narrowing a once 16-point gap to just 2.3 points. Perth, Adelaide and Brisbane now show house price growth exceeding construction costs – 66, 64 and 58 per cent respectively – encouraging renewed building activity. By contrast, Sydney, Melbourne and Canberra remain challenged, with construction costs rising far ahead of sluggish house prices. Sydney’s house prices are up just 19 per cent compared to a 32 per cent rise in building costs, while Melbourne lags badly at 4 per cent against 25 per cent. Conisbee notes this divergence will shape housing supply: western and northern capitals are likely to see more construction, while eastern markets may face continued constraints. She concludes that although it still remains cheaper to buy than build in most cities, the momentum is shifting in a positive direction for supply.

Conclusion

Sydney’s September property market highlights the continuing challenges of affordability, shifting dynamics between buying and building, and the pressure renters face amid soaring costs. While targeted government policies and positive construction trends in some capitals offer glimpses of progress, Sydney remains a difficult market for both first home buyers and developers. With stamp duty reform, housing supply, and rental affordability at the forefront, these issues are likely to dominate debate in the months ahead.