Sydney’s home ownership rate has fallen to its lowest level in around 70 years. That’s not a headline exaggeration, it’s the finding of new KPMG analysis that combines Census data, ABS housing surveys and rental bond records, and it puts the city’s ownership rate at levels not seen since the 1950s.
For anyone who owns property, rents in Sydney, or is trying to buy their first home here, this is worth understanding properly, not just as a headline, but as a structural shift with real implications for where the market goes from here. Here’s what the data actually shows, why it’s happening, and what it means depending on where you sit in the market.
The headline numbers
According to KPMG’s analysis:
- Sydney’s home ownership rate fell from 61.1% in 2021 to 59.9% in 2025, the first time it has dropped below 60% since the 1950s.
- Nationally, the ownership rate slipped only slightly, from 66.3% to 65.9%, with Sydney and regional NSW identified as the primary drivers of that decline.
- Greater Sydney’s renter households grew from 703,553 in 2021 to 786,802 in 2025, an increase of more than 83,000 households, or 11.8%.
- The share of Sydney households renting climbed from 36.8% to 37.9% over the same period, meaning close to two in five Sydney households now rent rather than own.
- Home ownership in Greater Sydney grew at just 1.6% annually in 2025, against 2.8% growth in renting households.
KPMG urban economist Terry Rawnsley summed it up bluntly: Sydney has gone backwards on home ownership by more than half a century, a reflection of how far affordability has moved against households trying to buy where they live.
Why Sydney specifically, and not the rest of the country
This is the part of the story that gets lost in the headline. Home ownership isn’t declining everywhere in Australia. Western Australia’s ownership rate actually rose from 69.2% to 69.9% between 2021 and 2025. Queensland’s climbed from 63.9% to 64.9%. Victoria held steady at 68.7%.
Rawnsley’s explanation is straightforward: Western Australia and Queensland offered a genuinely rare combination during the pandemic years, relatively affordable homes, ultra-low borrowing costs, and remote work flexibility that let people relocate without sacrificing their income. Many households effectively cashed out of expensive markets like Sydney and bought into cheaper ones, entering ownership somewhere they couldn’t have afforded to in Sydney.
The underlying driver in Sydney, according to KPMG, isn’t a lack of buyer appetite or a shortage of government support schemes. It’s supply. As Rawnsley put it, there are plenty of schemes, including the federal government’s 5% deposit scheme, which had its Sydney price cap lifted from $900,000 to $1.5 million in October 2025, but Sydney “just hasn’t produced enough houses over the last 20 years.” Buyer demand and government incentives can only do so much when there isn’t enough housing stock for people to actually buy.
What this means for renters and the rental market
An extra 83,000-plus renter households in Greater Sydney over four years puts sustained pressure on an already tight rental market. That pressure has shown up clearly in rent data through 2025 and into 2026.
Rental growth has moved in phases. Through much of 2025, growth was easing from the sharp increases of 2022–2024, Sydney house rents reached a record $780 per week by mid-2025, with annual growth slowing to around 8%, the softest pace since 2020. But more recent data shows renewed acceleration: Domain’s June 2026 quarter report found Sydney house rents jumped 6.3% to a record $850 per week, the city’s largest quarterly rent increase since 2022, with unit rents also climbing to a record $780 per week.
Vacancy rates remain structurally tight. Longer-range forecasting from CBRE suggests Sydney’s apartment vacancy rate could fall from around 2.0% to 1.2% by 2030, as annual apartment delivery of roughly 11,700 dwellings continues to fall well short of the roughly 30,000-dwelling annual demand for total housing stock.
Put simply: more households are being pushed into renting, and the supply of rental stock isn’t expanding fast enough to absorb them comfortably. For tenants, that means continued competition for well-located, well-presented rentals, which is exactly the segment we manage across Darlinghurst and Surry Hills.
What this means for property investors and landlords
There’s a case to be made that a structurally larger renter population is, from a purely commercial standpoint, good news for property investors, more renters chasing a constrained supply of rental stock supports both occupancy and rental growth. Cotality’s Q2 2026 Rental Review found the national gross rental yield rose to 3.7%, with Sydney’s yield climbing to 3.3%, still below many other capital cities, but moving in the right direction for investors after years of yield compression.
That said, the economics remain genuinely difficult. Cotality’s head of research, Gerard Burg, has noted that even with improving yields, gross returns in Sydney remain well below the cost of capital for many investors, particularly with negative gearing changes for existing housing stock purchases set to take effect from July 2027. Investors are increasingly factoring policy change into rent-setting decisions now, which is part of what’s driving the sharper rental growth seen through mid-2026.
For existing landlords, the practical takeaway is that rental demand in inner Sydney is not going anywhere in the near term, if anything, it’s intensifying. That makes active management, correct pricing and minimising vacancy periods more valuable than ever, not less. We’ve written previously about how rental yield in the inner Sydney market currently compares across suburbs, and how that picture looks when you compare a suburb like Redfern against Surry Hills specifically.
What this means for first home buyers
The picture here is genuinely mixed. On one hand, government support has expanded meaningfully, the 5% deposit scheme’s Sydney price cap now sits at $1.5 million, opening the door to median-priced properties rather than only the cheapest end of the market, and income caps have been removed. On the other hand, KPMG’s own analysis is clear that expanded demand-side support, without a matching increase in supply, risks simply adding fuel to an already undersupplied market rather than solving the underlying affordability problem.
Rawnsley’s view is that the dream of home ownership isn’t dead, but the path to it now looks different than it did a generation ago, often involving relocation, a longer savings runway, or entering the market somewhere other than where a buyer might have originally planned to live.
What it means locally, in Darlinghurst and Surry Hills
Inner-ring suburbs like Darlinghurst and Surry Hills sit at the sharp end of this trend. These are suburbs where home ownership has always required a significant income, and where the gap between renting and buying has arguably never been wider. That reinforces two things we’re seeing on the ground: sustained, resilient rental demand for well-located apartments and terraces, and a sales market where scarcity, not just demand, is doing a lot of the work on price. We’ve covered this dynamic specifically for Surry Hills’ current market conditions, where house stock-on-market sits at just 0.22%, an extraordinarily tight figure even by inner-Sydney standards.
For owners in these suburbs, the practical implication is straightforward: whether you’re planning to sell into a tightly held market or hold and lease into a deepening pool of renters, both sides of that decision are currently supported by the same underlying supply shortage. The decision comes down to your own circumstances and goals, not which side of the market is “better” in the abstract.
Our take
This data doesn’t point to a housing market in crisis so much as a housing market that has been under-supplied relative to demand for two decades, with the consequences now compounding. Sydney isn’t simply expensive, it has structurally shifted toward being a city where a much larger share of the population rents long-term rather than transitions through to ownership. That shift has real implications for how landlords, tenants, buyers and sellers should each be thinking about the market in 2026, and it’s not a trend that reverses quickly.
If you want to talk through what this means for a property you own, whether that’s pricing a sale into current conditions or getting the most out of a rental in a market where renter demand keeps climbing, we’re happy to have that conversation. You can find out more about how we manage rental properties across Darlinghurst, Surry Hills and the Eastern Suburbs on our property management page.
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Disclaimer
The data, figures, and market statistics referenced in this article were current at the time of publication and are sourced from third-party providers including CoreLogic/Cotality, Domain, realestate.com.au, HtAG Analytics, PropTrack, and NSW Fair Trading, among others. Property market data changes frequently, median prices, rental yields, vacancy rates, clearance rates, and days on market figures are updated regularly by their respective providers and may have changed since this article was published. Readers are encouraged to verify all figures directly with the cited sources before making any decisions.
This article is intended as general information only. It does not constitute financial, investment, legal, or taxation advice. The information provided does not take into account your individual circumstances, objectives, financial situation, or needs. Before making any property investment, purchase, sale, or management decision, you should seek independent advice from a qualified financial adviser, solicitor, or property professional licensed in your state.
Murray Property is a licensed real estate agency operating in NSW. We are not financial advisers. References to rental yields, capital growth, or investment returns are based on publicly available market data and historical performance, which is not a reliable indicator of future results.
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