What buyers, sellers, landlords and tenants need to know about Sydney’s changing property market
Sydney’s property market continues to shift, with changes affecting both property owners considering selling and landlords reviewing their rental investments. From surcharge land tax obligations to continued pressure on Sydney’s rental supply, understanding where your property sits in the current market is increasingly important.
Property owners
For some NSW property owners, surcharge land tax is becoming an important consideration when deciding whether to hold or sell.
Foreign persons who own residential property in NSW may be required to pay surcharge land tax in addition to any regular land tax liability. The surcharge is currently 5% of the property’s unimproved land value and there is no tax-free threshold.
This can also affect some Australian permanent residents. Revenue NSW generally considers a permanent resident a foreign person for surcharge land tax purposes if they have not been in Australia for at least 200 days during the relevant period. Australian citizens are not considered foreign persons for this surcharge. There are exemptions in some circumstances, including certain principal place of residence situations.
For owners who spend significant periods overseas, it is important to understand their status rather than assume an exemption applies. Revenue NSW requires relevant property owners to keep their foreign status up to date, and permanent residents living overseas for more than 165 days in a calendar year may become liable unless an exemption applies.
Anyone who thinks they may be affected should speak with their accountant or tax adviser and ensure their details with Revenue NSW are current. Addressing any potential liability early can help avoid unexpected issues when preparing a property for sale.
Rental market
The rental market presents a different set of considerations. Sydney continues to have limited rental availability, despite some improvement in supply during 2026. Sydney’s vacancy rate was 1.7% in July, while asking rents remained elevated. More recent SQM Research data shows Sydney asking rents in September remain higher than a year earlier for both houses and units.
In a competitive rental market, many tenants are choosing to stay where they are. Moving involves more than finding another property. Removal costs, transport, petrol and the broader cost of living can all influence a tenant’s decision, while proximity to public transport, work and essential services remains highly valuable.
For landlords, stable tenancies can be positive, but they should not mean a property is simply left on autopilot. Regular routine inspections remain important for understanding the condition of the property and identifying maintenance requirements. It is also worth reviewing the rent against comparable properties to understand whether it remains appropriate for the current market.
Market conditions can change quickly, and the value of a property as both a sales and rental asset can shift with them. Regular professional advice gives owners a clearer picture of their position and helps them make informed decisions about what comes next.
Find out what your property is worth
Whether you are considering selling, reviewing your investment or simply want to know whether your current rent reflects today’s market, speak with Trish at SydneyLinks. Arrange a free sales or rental appraisal to understand your property’s current value, review its condition and make sure your investment is keeping pace with the Sydney market.
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