The gap between what Sydney homebuyers can afford and what sellers are asking has widened sharply, with some of the city’s prestige areas listing homes millions above buyer budgets.
According to The Sydney Morning Herald, Domain’s latest Matching Demand Report shows listings exceed buyer search prices across nearly all regions, a clear sign that affordability pressures continue to weigh on the market.
Domain’s chief of research and economics Dr Nicola Powell said Sydney’s housing affordability has reached a breaking point. “Listings sit well above buyer searches in pretty much every ring, even on the outer fringe,” she said.
Buyers Struggling to Keep Up
The report compared buyer search prices with seller listings and found wide disparities:
- Inner ring: $2.8m listings vs $2.5m searches — $300k gap
- Middle ring: $1.75m vs $1.6m — $150k gap
- Outer ring: $1.28m vs $1m — $280k gap
The biggest mismatch was in the eastern suburbs-north, including Bellevue Hill, Bondi Beach, and Point Piper, where listings averaged $5.5 million, about $2 million above typical buyer searches.
Even in traditionally more affordable regions like Penrith, listings were $200,000 higher than buyer expectations.
Buyers’ agent Sam Green said many begin their search “a bit optimistically,” only to adjust expectations later. KPMG urban economist Terry Rawnsley added that even high-income earners are struggling to buy, as limited supply and rising prices push more buyers to outer areas.
Townhouses Bridging the Gap
As house prices remain out of reach, townhouses are becoming the “bridge between aspiration and attainability,” Dr Powell said.
In the inner ring, townhouse listings are about $100,000 higher than searches, while the middle ring shows no price gap, suggesting better alignment between sellers and buyers.
Buyers’ agent Henny Rahardja noted some clients are shifting from detached houses to townhouses closer to amenities. “They realised they didn’t need the big house,” she said.
Outlook
Experts say rezoning and development potential are influencing seller expectations, but not always aligning with buyer sentiment. As Powell noted, the data makes one thing clear, Sydney’s affordability gap isn’t just widening in prestige postcodes, it’s spreading across the city.
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