Inner-City Sydney Market Holds Firm as Supply Tightens and Confidence Returns

Sydney's inner-city apartment market continues to show strength in the face of limited supply and rising buyer activity. From Barangaroo's prestige apartments to Pyrmont's tightly held investments and Surry Hills' cosmopolitan lifestyle draw, the fundamentals across the city's key precincts remain robust.

The most recent reports from the Domain inner-city market wrap indicate a continued pause in interest-rate movement, with the Reserve Bank of Australia (RBA) holding the cash rate at 3.60 per cent. (Reserve Bank of Australia)

Despite higher borrowing costs, demand for quality apartments remain resilient. Clearance rates across greater Sydney sit at around 71.2 per cent, but it is important to clarify this figure refers to the broader Sydney market, not exclusively the inner-city precincts.

Pyrmont: A Consistent Performer with High-Quality Stock

In Pyrmont, the medium unit value is currently estimated at $1.34 million. The suburb's average ownership tenure of around 15 years reflects long-term confidence, with demand driven by proximity to the CBD, harbour-front amenities and boutique modern developments.

While total listings remain limited, newer two- and three-bedroom apartments are achieving strong results, particularly in buildings offering resort-style facilities and water views. For tenants, Pyrmont continues to command healthy rents, making this a compelling investment segment.

Barangaroo: Prestige Market Showing Strong Momentum

Barangaroo stands out as Sydney's most exclusive precinct, underpinned by luxury apartment offerings and sustained demand from high-net-worth local and offshore buyers.

With a median unit value in the multi-million dollar bracket, this pocket of the city represents the pinnacle of apartment living. 

Population growth of approximately 16.4 per cent over the past five years confirms Barangaroo’s evolution as both a residential and commercial destination. That growth is largely due to the completion and opening of the One Sydney Harbour development, which has attracted new residents to the precinct. 

Rental performance remains impressive, with luxury apartments continuing to achieve strong weekly rental rates and yields that reflect an enduring appeal. 

For investors, Barangaroo offers rare exposure to a globally recognised precinct where limited new supply and sustained demand combine to underpin long-term capital growth potential. 

Sydney CBD: Core Market Resilience in Focus

The Sydney CBD continues to demonstrate its resilience as the economic and residential heart of the city. Apartment values remain stable, with a median unit price in the vicinity of $935,000 and consistent buyer demand for well-positioned buildings close to Barangaroo, Hyde Park and Darling Harbour.

The suburb's housing mix remains dominated by professional couples and investors, with only around 24 per cent of dwellings owner-occupied. Rental demand has surged alongside the return of international students and corporate tenants, driving strong weekly rents for one - and three-bedroom apartments.

With limited land and new project completions, the CBD remains a market defined by scarcity - a theme that continues to support both price and yield performance heading into 2026.

Surry Hills: Lifestyle, Culture, and Enduring Popularity

Surry Hills continues to attract buyers drawn to its village energy, cultural diversity, and connectivity to the city. With median unit and house prices at approximately $920 000 and $2.38 million respectively, it remains one of the city’s most dynamic markets for both owner-occupiers and investors. 

Its appeal lies in its walkability, café culture, and character architecture, balanced with modern apartment options and strong rental performance. One-bedroom apartments typically lease for around $750 per week, while larger properties can achieve $1 200 + per week, reflecting sustained rental demand from professionals and creative industries. 

Despite a modest population decline of 3.6 per cent over the past five years, the suburb continues to outperform on rental yields and capital growth consistency — making it a key focus for investors seeking both lifestyle and longevity. 

Market Outlook: Balanced Momentum Through 2025

Across the inner city, the fundamentals remain clear: limited new supply, high buyer intent, and a deepening rental pool. The Domain data also shows that approximately 59.2 per cent of all enquiries for Sydney inner-city apartments now come from outside the area, confirming the city’s continued magnetism for investors, downsizers and relocators. 

As inflation stabilises and confidence improves, steady price growth and competitive rental yields are expected to carry the market into 2026. For sellers, this represents an ideal window to capitalise on constrained stock levels; for buyers, a chance to secure prime property in tightly held precincts; and for investors, an opportunity to leverage one of Australia’s most resilient apartment markets. 

Smarter. Made Simpler.

Sydney’s inner-city apartment market continues to evolve — but its appeal endures. 

 At Ayre Real Estate, we specialise exclusively in apartments, offering unmatched local knowledge across the inner city suburbs including Pyrmont, Barangaroo, Sydney CBD and Surry Hills. Whether you’re looking to buy, sell or invest, our team delivers informed, strategic advice that keeps you ahead of the curve.  

We’re for apartments.