What are urban NSW market predictions for 2025? 

Article by Camilla Jones 3 June 2025

Urban NSW’s real estate market is in for a thrilling time in 2025, with difficulties and opportunities defining the environment for buyers, sellers and investors. 

Sydney’s frantic city to the growing regional hubs — the real estate market is defined by population growth, interest rates and housing on offer. 

Demographic considerations 

NSW is anticipating massive population growth, with Sydney alone set to absorb more than 650,000 new residents by 2034, the Centre for Population reports. 

That factor alone means a constant flow of pressure on the already compressed property market — particularly in cities. 
 
Additionally, as housing demand rises, rivalry among buyers and speculators may intensify and drive-up property prices.  

Economic factors 

Despite interest rates remaining unchanged throughout 2024, economists predict possible rate drops in the first half of 2025. This would help to revive buyer confidence and property prices late in the year. 
 
But for all that, affordability remains a problem — particularly in Sydney, which has among the country’s highest median property values. 
 
Government measures and small wage rises attempt to make housing more affordable, lightly reducing the burden on first-time buyers and low-to-middle class families. 

Rent market trends 

With record-low vacancy rates, the Sydney rent market and other NSW metropolitan areas are still under pressure. 
 
Increased rents at the same time have nudged tenants to consider house purchase as a more stable and longer-term option. 
 
Though this shift can drive more intense demand for property, particularly where growth is strongest, rental growth remains to remain in slowdown mode — which can ease some heat off renters over the short term. 

Policy drivers 

Since Premier Chris Minns came to office, the NSW government has committed to delivering 1.2 million new dwellings in the next five years — with a focus on addressing supply in city suburbs.
 
Even though construction costs and labour shortages remain a problem, these developments can temper price rises and offer consumers more options. 
 
There could be a greater variety of houses on the market this year particularly in new suburbs and city renewal projects. 

Challenges and risks 

Whilst there is optimism and the effort, the NSW property market does have several problems in throughout this year. 
 
Testing buyers’ and sellers’ resolve and mindset in the state are affordability tensions, constrained supply and economic doubts. 
 
Also, reducing migration limits would slow housing demand in some areas of the state — possibly ending price increases. 

Conclusion 

The property market of Urban NSW this year is a complex and dynamic landscaped — driven by a combination of policy, economic and demographic drivers. 
 
For sellers and buyers, investors, surviving this market successfully will depend on being informed of these trends and being kept informed. 
 
With an understanding of what is occurring in the market and with expert guidance, buyers can be poised to take advantage of opportunities that present themselves in the urban property market in 2025.