Insights for Sydney Property Buyers
The Sydney property market has evolved considerably in recent years, particularly in the Inner West, where the median house price now regularly meets or exceeds $2million. For buyers seeking to navigate the increasingly complex and competitive landscape, understanding the relationship between price guides, actual sale outcomes, and auction trends has become essential. We at Buyer’s Domain continuously analyse sales data, market commentary and regulatory insights to provide clarity for those considering a property purchase at this price point.
Indeed, recent media articles have highlighted the extent of buyer confusion caused by the price guides provided by some selling agents.
Current Legal Framework & Agent Obligations
The legislation that governs underquoting in New South Wales is the Property, Stock and Business Agents Act 2002 (NSW), as amended in 2015:
- Estimated selling price requirement
Agents must include a reasonable estimate of the likely selling price in the agency agreement with the vendor which is either a single figure or a price range. If using a range, the top value may not exceed the bottom value by more than 10%. For example, a range of $2m – $2.2m is acceptable but a range of $2m – $2.5m is unacceptable. - Maintaining and revising estimates
Agents must ensure that this estimate is reasonable and up to date. If circumstances change, they must (a) notify the seller in writing, (b) amend the agency agreement accordingly, and (c) promptly update or retract marketing that contains outdated prices. - Evidence requirement
Agents must provide evidence to sellers supporting the reasonableness of their estimated selling price NSW Legislation. - Advertising restrictions and verbal and written communications
It is unlawful for agents to advertise or state that a property will likely sell below the estimated selling price. Common phrasing such as “offers above,” “offers over,” or using symbols like “+” is explicitly banned.
Price Guides in Practice
In practice, property buyers need to understand the difference between auction price guides, private treaty price guides and for sale prices.
- Auction Price Guides: These are intended as a starting point for bidding at an auction rather than a ceiling; competitive auctions frequently exceed them, sometimes by hundreds of thousands of dollars. Low price guides are designed to attract multiple bidders to drive up the selling price. It is common practice for the price guide to be approximately 10% less than the final selling price so a property with a $2m price guide might be likely to sell for $2.2m. However, in a rising market, it is not uncommon for the underquoting differential to blow out by 20% or more.
- Private Treaty Price Guides: The listed price is negotiable but does not guarantee the final outcome — blind auctions and off-market negotiations can see prices drift considerably and in these instances the same principles for Auction Price Guides may apply. However, without the mechanics of an auction process, Private Treaty Price Guides generally tend to be a little more conservative.
- For Sale Prices: Sometimes the property is listed for sale with an asking price. This is the starting point for negotiations and the final selling price could easily be lower than the For Sale Price. Caught out is the buyer who adds 10% or more to a For Sale Price! With off market properties, our experience is that sometimes the agent’s price guide amounts to a For Sale Price and other times, depending upon the strength of the market and competition for the property, the off market price guide is more akin to a Private Treaty Price Guide.
Recent Examples: Properties Guided at $2million with Final Sale Prices
One way for property buyers to decipher a price guide is to look at recent examples of similar properties that have sold whilst comparing the original price guide against the final selling price. This can also be done specifically for each agent to better understand each individual agent’s common practices.
Here are some well-referenced examples:
- 21 The Parade, Enfield
- Price Guide: $1.98m
- Sold: $2.41m
- Gap: ~+$430k (~+22%)
- Source: 9News, 1 July, 2024.
- Marrickville — renovated 2-bed house
- Price Guide: $1.5m
- Sold: “more than $2.1m”
- Gap: ≥ $600k (≥ +40%)
- Source: ABC News feature on NSW underquoting, 10 August, 2024
- Redfern terrace
- Price Guide: $2.6m
- Sold: $3.21m
- Gap: +$600k (~+23%) over reserve
- Source: Daily Telegraph, 16 December, 2024
Market Forces and the $2million Barrier
Recent analytical forecasts suggest that sub-$2million houses are swiftly disappearing from Sydney’s inner suburbs, pushing the baseline for prospective buyers ever higher. With only 152 houses listed for sale with a price guide up to $2m across the whole of the Inner West on realestate.com.au as at 14 August, 2025, many agents now warn that $3million has already become the entry price for detached dwellings in desirable Inner West locations.
The drivers behind these price trends are clear:
- Historic and chronic undersupply
- Sustained population growth and migration
- Interest rate reductions boosting buyer sentiment
- Heightened competition from both investors and owner-occupiers
- Rezonings, infrastructure changes and development continuously demolishing and removing houses from the supply chain.
Typical Price Guide vs. Actual Sale Price: What Should Buyers Expect?
Given the competitive pressures, it is critical for buyers to approach the price guide as a starting point, not a ceiling. Our advice:
- Expect Sale Prices to Exceed the Auction Price Guide: Properties guided at $2million in the Inner West often sell for at least $150,000–$400,000 above the price guide, dependent on market momentum, property uniqueness and competitive dynamics.
- Do Your Own Due Diligence: Analyse recent comparable sales from trusted platforms such as Domain and Real Estate, review auction outcomes, and consider engaging a buyer’s agent for expert advice and negotiation support.
- Prepare for Auction Volatility: While auction guides aim to reflect market fairness, emotional bidding, unique property features and market scarcity drive premiums. Set your budget with a margin for escalation above the published guide.
- Be Careful with Off Market Listings: For buyers who have exhausted traditional property searches, off market listings can provide exclusive access to additional opportunities. However, bear in mind that off market properties are not being tested on the open market and can be a trap for unsavvy buyers, particularly in instances where a seller might be attempting to offload a property with problems.
How Buyers’ Agents Add Value
At Buyer’s Domain, our buyers’ agents play a critical role in managing our clients’ price expectations, uncovering off-market opportunities, assessing realistic value, and ensuring ethical conduct from sellers. Buyers’ agents also assist in comparative analysis, which is vital in environments prone to underquoting and escalating bids.
Conclusion: Navigating the $2million Guide in Sydney
In summary:
- The $2million price guide is a reflection of current vendor expectations and market comparables but is rarely the final sale price in the Sydney property market.
- Most Inner West properties currently guided at $2million will attract a significant premium when sold.
- Comprehensive market research, auction preparation, and expert support are essential to secure the right property without overpaying.
We at Buyer’s Domain recommend engaging early with buyers’ agents to leverage both market intelligence and negotiation skills, thereby ensuring that your next Sydney property purchase is both successful and rewarding.
For more tailored insights and up-to-date market analysis, contact our team directly for a strategic property consultation.
