When I moved to Sydney from the UK in 2004, it was in the after-glow of the 2000 Sydney Olympics. In just over 20 years, the city has grown considerably and it is now undergoing a period of profound transformation. The interplay of rapid population growth, ambitious government planning reforms, and shifting demographic trends is fundamentally reshaping the Sydney property market.
As experienced buyers’ agents, we at Buyer’s Domain are witnessing these changes first-hand and are committed to guiding property buyers through this evolving landscape.
Unprecedented Population Growth: Where Will Everyone Live?
Sydney’s population has reached historic highs, with the metropolitan area now home to over 5.5 million people in 2025, with a growth rate of approximately 2 percent in 2023 – 2024. Projections indicate that Greater Sydney will see its population swell by an additional 1.4 million people by 2041, reaching 6.3 million. Nationwide, Australia is forecast to grow by 4.2 million people over the next decade, with Sydney absorbing a significant share of this influx.
This surge is driven by both natural increase and robust overseas migration, which is expected to remain the primary contributor to population growth in New South Wales. Net overseas migration will add 1.7 million people to the state by 2041, more than offsetting the net loss of 400,000 residents to interstate migration. There will also be a natural increase of about 700,000 more births than deaths. The result is mounting pressure on Sydney’s housing market, infrastructure, and services.
Housing Demand Outstrips Supply
The affect on the Sydney property market is immediate and pronounced. Demand for housing continues to outpace supply, fuelling price growth and intensifying competition among buyers. In February 2025, the Housing Industry Association (HIA) predicted that NSW will fall short of its share of the national 2029 target by approximately 120,000 new homes.
Government Intervention: Rezoning and Housing Policy
In response to these pressures, the New South Wales Government has enacted sweeping rezoning reforms designed to accelerate the delivery of new homes and address the housing shortfall.
State Significant Rezoning Policy
The State Significant Rezoning Policy streamlines the planning process, reducing rezoning timeframes by up to 200 working days and prioritising strategically important sites that can deliver large numbers of dwellings and jobs.
Key features include:
- Two rezoning pathways: state-led rezonings for large precincts and state-assessed proposals for delayed or strategically significant sites.
- Preference for proposals delivering at least 500 dwellings in metropolitan Sydney or 100 in regional areas, with a focus on affordable housing and well-serviced locations.
- A target of delivering 377,000 new homes across metropolitan Sydney and regional NSW by 2029.
Low and Mid-Rise Housing Policy
Complementing the rezoning reforms is the Low and Mid-Rise Housing Policy, which aims to unlock 112,000 homes over the next five years. Planning controls have been relaxed within 800 metres of 171 town centres and stations, permitting terraces, townhouses, and low-rise residential flat buildings in areas where such developments were previously restricted. This policy seeks to reintroduce housing diversity and fill the “missing middle” between high-rise apartments and greenfield developments.
The Three Cities Plan: Reshaping Greater Sydney
The Greater Sydney Region Plan, known as “A Metropolis of Three Cities,” is a bold vision to restructure the city into three interconnected urban centres: the Eastern Harbour City (CBD and surrounds), the Central River City (Parramatta), and the Western Parkland City (centred on the new Western Sydney Aerotropolis). This approach aims to:
- Rebalance growth and distribute economic and social benefits more equitably.
- Ensure that most residents can access jobs, services, and public spaces within 30 minutes of home.
- Align land use, transport, and infrastructure planning to support sustainable population growth.
As the population of Greater Sydney approaches 8 million over the next 40 years, with nearly half residing west of Parramatta, the Three Cities Plan is critical to managing urban expansion and enhancing liveability.
Demographic Shifts: Who is Living Where?
Ageing and Wealth in the CBD
The State’s median age is projected to rise from 39 to 41 by 2041, with the proportion of residents aged 65 and over increasing from 17 percent to 21 percent. The City of Sydney itself is forecast to grow from 232,438 in 2025 to over 304,000 by 2046, with a concentration of wealthier and older residents in the CBD and eastern suburbs. Income inequality is most pronounced in the northern and eastern suburbs, reflecting the clustering of high-income earners and professionals in these areas. Accordingly, Sydney is experiencing notable demographic shifts.
Young Families and Growth Corridors
Young families are increasingly gravitating towards Sydney’s outer growth corridors, such as Camden, Wollondilly, and The Hills, which are projected to experience some of the highest annual growth rates in the next two decades:
- Camden: 3.5%
- Wollondilly: 3.3%
- The Hills: 2.7%
Central and Western Sydney are also attracting young couples and families, driven by more affordable housing and expanding infrastructure.
Who is Leaving Sydney?
While Sydney continues to attract international migrants, there is a net loss of residents to interstate migration, particularly to regional NSW and other states. Many of those leaving are seeking more affordable housing, lifestyle changes, or retirement options outside the metropolitan area.
Implications for Property Buyers and the Role of Buyers’ Agents
Navigating a Complex Market
The Sydney property market is more complex and competitive than ever. Population growth, planning reforms, and demographic shifts are creating both opportunities and challenges for property buyers. The rapid pace of change underscores the importance of expert guidance in securing the right property, at the right price, in the right location.
Why Engage a Buyers’ Agent?
As experienced buyers’ agents, we provide:
- In-depth market analysis: Understanding local trends, price movements, and future growth prospects.
- Access to off-market opportunities: Leveraging networks to identify properties before they reach the open market.
- Negotiation expertise: Securing the best terms in a competitive environment.
- Strategic advice: Guiding buyers through rezoning changes, infrastructure developments, and demographic trends.
Our role is to ensure that property buyers are well-informed and well-positioned to make confident decisions in a rapidly changing Sydney property market.
Conclusion: Sydney at a Crossroads
Sydney stands at a critical juncture. Unprecedented population growth, ambitious government reforms, and shifting demographics are reshaping the city and its property market. The challenges of housing supply, affordability, and equitable growth are significant, but so too are the opportunities for astute property buyers. Smart buyers will recognise the changes and ensure they are well placed to benefit from them whilst moving to areas that are most aligned to their long term life needs.
As buyers’ agents, we are dedicated to helping our clients navigate this evolving landscape, providing the expertise and insight necessary to secure their place in Sydney’s future. Whether you are seeking your family home, an investment property, or a foothold in one of Sydney’s emerging growth corridors, we are here to guide you every step of the way.
For tailored advice and expert representation in the Sydney property market, contact Buyer’s Domain today.
