Investor demand drives $155m in Sydney apartment block and townhouse sales

Sydney’s residential investment market has recorded $155 million in apartment block and townhouse sales over 2025, underscoring continued investor confidence in rental-led assets despite broader economic uncertainty.

The transactions were completed by Knight Frank’s Investment Sales agents James Masselos and Adam Droubi, who negotiated 19 sales across Sydney during the year.

Residential investments accounted for 75 per cent of their total sales activity, supported by more than 4,200 active purchaser enquiries.

Co-living deal sets national benchmark

Among the standout transactions was the off-market sale of 142 Carillon Avenue in Newtown, a 37-studio co-living apartment block located close to the University of Sydney and Royal Prince Alfred Hospital.

The property sold for $21.5 million, setting a new benchmark for the living sectors market nationally.

The deal achieved approximately $581,000 per bedroom, believed to be one of the highest per-bedroom results recorded for a co-living asset in Australia.

Inner-city assets trade in one line

Other notable sales included a group of 12 townhouses at 108 Illawarra Road in Marrickville, sold in one line for $14 million, and a block of 20 studio apartments at 171 Rowntree Street in Birchgrove, which changed hands for $6.7 million.

Both transactions reflected strong buyer competition for well-located residential assets with established income streams.

Supply constraints underpin momentum

Mr Masselos said Sydney’s apartment block market continued to benefit from tight supply and strong rental conditions.

“Apartment blocks and broader residential investments remain a robust asset class, underpinned by strong rental growth, record low vacancy levels and scarcity of stock,” he said.

He added that more than $25 million worth of residential investment opportunities are expected to come to market in 2026, with buyer enquiry remaining elevated.

Mr Droubi said competitive sales campaigns had become a feature of the market as investors sought secure income and long-term value.

“Supply constraints and ongoing population growth underpin market strength,” he said. “New approvals and completions lag demand, keeping stock tight and boosting both rents and prices.”

Vacancy rates keep pressure on rents

According to Knight Frank, rental demand across Sydney remains intense, with vacancy rates well below typical “healthy” levels.

Many middle and outer-ring suburbs are recording vacancies of around 1.5 per cent or lower, maintaining upward pressure on rents and reinforcing the appeal of residential investment assets.

Abadeen, the Lower North Shore’s most active and prominent residential developer, together with investment partner Phoenix Property Investors, has lodged a State Significant Development Application to transform the former Honeysuckle Garden and Midas site on Military Road into 100 premium new homes.

With an estimated completed value of $230 million, the proposed development will transform the former Honeysuckle Garden and Midas site into a landmark mixed-use residential community comprising 100 premium residences, activated ground-floor retail and a resort-style rooftop wellness and recreation precinct designed to become one of the Lower North Shore’s most exceptional resident amenities.

The proposal has been carefully designed to respond to the site’s varied street frontages and surrounding neighbourhood. The building comprises predominantly five and nine storeys, steppingdown towards Hale Road to reduce its visual impact, with the tenth level rooftop
wellness facilities rather than residential apartments. This built form remains below the 12-storey outcome identified through Mosman Council’s recently endorsed Masterplan process, demonstrating a considered approach to delivering much-needed housing while respecting the site’s context and neighbouring properties.

Designed by leading Australian practice DKO Architecture, under the direction of Senior Associate Matthew Ritchard, the proposal has been conceived as a contemporary response to Mosman’s unique landscape, history and community.

Occupying a prominent position on Military Road between Cremorne and Mosman villages, the site is close to boutique retail, acclaimed dining, harbour beaches, leading schools and excellent public transport connections. Upper-level residences would enjoy panoramic views stretching north across Middle Harbour, south to the Sydney CBD skyline, east to Balmoral and Sydney Heads, and west across the Lower North Shore.

Abadeen Executive Chairman Justin Brown said the project represented an opportunity to deliver a new generation of homes for Mosman that responded to changing buyer needs while remaining respectful of the suburb’s established character.

“This is one of the most significant sites to come to market on the Lower North Shore in many years,” Brown says.

“The apartments have been designed as genuine long-term homes, with efficient floor plans that maximise usable living areas, generous internal storage, strong natural light and practical connections between internal and external spaces. A diverse range of apartment sizes and configurations provide greater housing choice for individuals, couples, families and local downsizers.

“The focus has been on creating homes that caters for a broad range of buyers, from young professionals purchasing their first home, to couples establishing themselves, growing families and local downsizers who want to remain in Mosman.”

Investor demand drives $155m in Sydney apartment block and townhouse sales

Strong rental fundamentals and tight supply have driven more than $155 million in Sydney apartment block and residential investment sales over the past year.

Co-living deal sets national benchmark

Inner-city assets trade in one line

Supply constraints underpin momentum

Vacancy rates keep pressure on rents