Mid-2025 Property Market Insights: Navigating the Inner City with Confidence

Mid-2025 Property Market Insights: Navigating the Inner City with Confidence

As we move through the second half of 2025, Sydney’s inner city continues to evolve as a highly nuanced, opportunity-rich property landscape. With rising buyer activity, varied performance across suburbs, and long-term confidence building, the current market presents both challenges and prospects for buyers, sellers and investors alike.

Drawing from the latest Domain market data and CoreLogic suburb reports for Pyrmont, Sydney CBD, Surry Hills and Barangaroo, here’s a breakdown of key trends shaping our apartment-focused inner-city market.

A Stabilising Market Backed by Demand

According to data from Domain from the May 2025 quarter, Sydney’s property market saw a notable rebound in listings—the highest on record for the month. Auction clearance rates hit 65.9%, the strongest since mid-2024, indicating renewed buyer confidence. However, private treaty sales are taking longer, and seller discounting has increased slightly, reflecting a more considered approach from buyers despite the easing of interest rates.

Apartments in Sydney’s Inner City (which includes Sydney CBD, Pyrmont, Surry Hills, Barangaroo and surrounds) are spending an average of 87.4 days on the market, a timeframe that’s reasonable considering high enquiry levels from out-of-area buyers—nearly 59% of demand is not local.

Pyrmont: Undervalued Luxury Meets Rising Demand

Pyrmont continues to show its strength as a lifestyle-led, investment-friendly precinct just 1.3km from the CBD. The suburb has seen modest population decline (-1.2% over five years), yet strong buyer interest, particularly in premium waterfront buildings.

The median apartment price now sits at $1,155,000, with upper quartile prices nearing $2 million. Standout transactions include $6.48 million and $6.3 million sales on Wharf Crescent and Darling Island Road, showcasing continued appetite for ultra-premium stock.

Rental demand is robust, with two-bedroom apartments commanding up to $1,380 per week and tight availability in 3-bedroom offerings. Investors can expect attractive gross yields, particularly in well-positioned complexes near the harbourfront.

Sydney CBD: A Market in Reset with Clear Upside Potential

The Sydney CBD (2000 postcode) offers a complex mix of prestige apartments, compact studios, and luxury penthouses. While the median unit price is holding at $990,000, there’s significant variation—recent Sydney CBD property sales ranged from $530,000 to $6.7 million, indicating a wide spectrum of buyer profiles.

Days on market remain higher than average, but many sellers are open to negotiation. This presents opportunity for buyers, particularly those seeking value in high-density precincts such as Kent, Bathurst and Elizabeth Streets.

Rental conditions are firming too. Ayre Real Estate is frequently leasing premium apartments upwards of $2,000 per week, reflecting increasing corporate and executive demand.

Surry Hills: Creative Energy and Inner-East Resilience

Surry Hills remains a vibrant and tightly held suburb, just 2.1km from the CBD. With an average ownership period of 14 years, turnover is low, but the area continues to appeal to owner-occupiers and investors alike.

Median unit prices sit at $950,000, while 3-bedroom apartments range upwards of $1.5 million. The upper quartile sale price for apartments is currently $1.375 million, suggesting strong competition for larger floorplans and unique warehouse conversions.

Rents are also climbing, particularly for character homes and architecturally updated terraces. Many terrace homes and large apartments are leasing for $2,000 per week and over, showcasing the suburb’s appeal to high-income professionals.

Barangaroo and Surrounds: Prestige and Position

While not detailed in CoreLogic’s latest suburb reports, Barangaroo continues to perform strongly across both the luxury owner-occupier and rental markets. Properties in One Sydney Harbour and surrounding towers remain highly sought after, with low days on market and consistent demand from expats, downsizers and executive renters. Ayre Real Estate recently secured a tenant for an unfurnished 4-bedroom apartment on level 82 of One Sydney Harbour (88 Barangaroo Avenue, Barangaroo) for $6,800 per week.

With the area now anchored by world-class amenities and a growing residential community, Barangaroo is positioning itself as one of Sydney’s most aspirational vertical villages.

Where to From Here?

For buyers, the current landscape offers opportunity—particularly for those with clear criteria and the ability to act when the right property arises. With seller discounting increasing slightly, private treaty transactions in the inner city can offer value, especially where there’s no competitive bidding.

For sellers, presentation, pricing strategy and timing remain critical. With more properties coming to market, standing out matters. Vendors who align price with market expectations are still achieving strong outcomes, especially at auction.

And for investors, now is the time to watch rental yields, particularly in suburbs like Pyrmont and Surry Hills where weekly returns remain strong. With population and rental demand forecast to rebound as city life continues to come back to life, the inner city remains a smart long-term investment.

Final Thoughts

Whether you’re buying your first apartment, upgrading to a waterfront address or investing in a growth precinct, the inner-city market is full of opportunity—if you know where to look and how to move forward strategically.

As always, expert guidance makes all the difference. If you’d like to discuss your property goals in Pyrmont, Sydney CBD, Surry Hills or Barangaroo, we’d be happy to help you navigate your next step.