Inside Sydney’s Ultra-Luxury Property Market: What’s Driving Demand in 2025
Simon Cohen, one of Australia’s top luxury property buyers, discusses the growing appeal of family homes, the rise of technology in high-end properties, and the neighbourhoods to dominate Sydney’s ultra-luxury market this year.
2 min
Q: Simon, what major trends do you think will shape Sydney’s ultra-luxury property market in 2025?
A: One of the most significant trends is the growing interest in family homes. People are increasingly looking at luxury homes not only as great places to live but also as sound investments. The demand for spacious properties, especially those catering to multi-generational living, will only grow in 2025.
Q: Do you think the preferences of luxury property buyers have evolved over the past few years?
A: Absolutely. Luxury property buyers today are far more discerning. While investment potential is still important, there’s been a noticeable shift towards a home prioritising lifestyle. Buyers are seeking properties that offer a balance of functionality and indulgence, a change from years past when location alone was often the deciding factor.
Q: What about the types of properties people are purchasing? Are buyers prioritising investment properties or homes to live in?
A: The trend is definitely leaning more towards family homes as primary residences rather than purely investment properties. Buyers are looking for homes that suit their needs now but also offer long-term value, both financially and in terms of lifestyle.
Last year, we saw this with the sale of Elaine, a historic mansion in Point Piper, which sold for $130 million, matching the national record. This was a prime example of a property that combines heritage, luxury, and the appeal of family living. Another noteworthy transaction was Rockleigh, also in Point Piper, which sold for $85 million.
Q: Are there any areas in Sydney that will gain prominence in the ultra-luxury market next year?
A: Suburbs like Vaucluse, Bellevue Hill, and Mosman continue to dominate the ultra-luxury market, but I think areas like Woollahra are gaining even more prominence. These neighbourhoods combine prestige with accessibility, and they’re becoming increasingly sought after by affluent buyers.
Q: What features or amenities are non-negotiable for buyers in the ultra-luxury market?
A: Quality is everything in this market. Buyers expect premium finishes and high-end features, such as smart home technology, custom-designed interiors, and amenities like home cinemas, temperature-controlled wine cellars, and private gyms. However, simplicity in technology is key. Buyers want features like automated curtains or heated floors, with a focus on ease of use.
Q: Since you founded Cohen Handler in 2009, what has been the most significant change in the luxury property market?
A: The biggest change is the sheer scale of what buyers are willing to spend. In 2009, we thought we’d seen big numbers, but those pale compared to today. The level of competition and the international interest in Sydney’s luxury market have driven prices to unprecedented levels.
Q: If you could give one piece of advice to someone looking to invest in the luxury property market in Sydney in 2025, what would it be?
A: Do your homework and seek expert advice. In this market, there’s a right purchase and a wrong purchase, and the difference could mean tens of millions of dollars. Knowing what you’re buying and understanding the potential value is absolutely critical.
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The typically busy spring season for the housing market was a dud, and the summer isn’t looking much brighter.
Housing services companies like Zillow Group and Rocket RKT +3.78% were loud and clear last week on earnings calls: Rocket CEO Varun Krishna called the quarter through June “one of the toughest spring housing markets in years.”
Jeremy Hofmann, Zillow’s chief financial officer, said on a conference call that the company predicted earlier this year that the market for mortgages would be flat. “We actually now think it’s going to be down low-to-mid-single digits,” he said.
The rest of 2026 will remain challenging for mortgage origination volume, says KBW analyst Bose George. The question now is what happens in 2027. “If mortgage rates remain [around] 6.75%, I think that’s going to be challenging even for next year,” he says.
But what’s bad news for mortgage companies could be a positive for bargain hunters. Buyers can expect prices to grow more slowly—or mildly decline—with less competition as long as mortgage rates remain unpredictable.
Mortgage rates at the beginning of the year were solidly below year-ago levels, notes Zillow senior economist Kara Ng. But they surpassed last year’s levels recently, she adds, referencing Freddie Mac’s weekly survey of 30-year fixed mortgage rates. Last week’s reading, at 6.69%, was higher than year-ago levels for the first time in 2026.
“From the affordability point of view, it’s going to get more challenging in the second half of the year,” she says. “And when affordability gets more challenging, that impacts sales and home price appreciation.”
Mortgage application data tracked by the Mortgage Bankers Association has cooled since the beginning of the year. The trade group expects that the number of mortgage originations in the remaining two quarters will lag behind last year’s levels, after exceeding 2025 levels in the first half.
Rocket’s early-stage data—which the company told Barron’s it derives from its brokerage Redfin, demand for its mortgage products, and signs in its servicing portfolio that a homeowner is preparing to refinance or move—“leads us to expect the third quarter mortgage market to be smaller than the second,” Chief Financial Officer Brian Brown, said on the company’s call. He added that such an occurrence is “something the industry has not seen since 2022.”
Prices will be about flat nationally, Ng says. Zillow’s most recent forecast, which shows how values are expected to change in the year ending June 2027, show them dropping in roughly half of the 100 largest U.S. metros for which data is available.
Buyers aren’t rushing in at a time when mortgage costs are rising and unpredictable. But those with the right combination of patience and cash could stand to benefit. “If you are financially qualified to buy a starter home, you are facing less competition and you’re more likely to get a price cut,” Ng says.
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