A select few Sydney suburbs are expected to outperform an otherwise stagnant market in 2026, according to a new report from Shore Financial.
According to Shore Financial’s State of Sydney Report, Randwick, Bayview, Barden Ridge, Spencer and Silverdale are the suburbs to watch this year, based on research that splits Sydney’s 600-plus suburbs into five distinct groups.
The report claims that Sydney house prices are “likely to tread water” in 2026 due to a combination of rising interest rates, affordability pressures and low buyer confidence.
Sydney’s top suburbs to watch have been revealed. Picture: iStock
Yet, the top five suburbs in each quintile, ranked based on expected growth in asking prices over the next six months, are expected to buck this trend.
Shore Financial CEO Theo Chambers said that while Perth, Brisbane and Darwin were currently experiencing strong momentum, the research underpinning the report found that the Sydney housing market was likely to record only minimal growth over the six months to August.
There were four key reasons for this outlook, according to Mr Chambers.
“First, rising interest rates are reducing borrowing capacity,” he said.
“The Reserve Bank of Australia lifted the cash rate in February and has signalled that at least one further increase may occur this year,” he said.
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Shore Financial’s Sydney suburbs to watch in 2026.
Mr Chambers noted that “arguably the most important factor” was rising rates weighing heavily on buyer confidence.
“The power of sentiment in the property market can sometimes be more impactful than the actual commercial effect of a rate rise,” he said.
“In many cases, a single rate increase may only make a marginal difference to a particular buyer’s borrowing power, but what it does change is psychology.”
Mr Chambers said buyers become “less bullish” when they believe rates may rise again.
He added that affordability remaining “stretched”, along with a small uptick in listings – particularly in the mid-tier to upper-tier housing markets – were also contributing factors to the Sydney’s minimal expected growth this year.
Shore Financial’s report groups suburbs into five quintiles based on the current median asking price for houses: Heartland Sydney, Suburban Sydney, Rising Sydney, Professional Sydney and Affluent Sydney.
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This home on Kilimanjaro St, Silverdale sold for $1.25m in December last year
The top performing suburb identified by the report in the ‘Heartland’ quintile was Silverdale, a westerly town close to the Blue Mountains.
The report forecasts 3-4 per cent growth for the suburb upon its current median of $1.4m.
According to the report, freestanding houses make up 99 per cent of the Silverdale market.
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This Wisemans Ferry Rd acreage in Spencer was sold for the suburb’s median of $1.055m in October
Ranking top of the ‘Suburban’ Sydney quintile was Spencer, in The Central Coast.
Owner-occupiers currently make up 95 per cent of the suburb, where the median house price sits at $1.055m.
According to the report, houses in the area last an average of just 22 days on the market.
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12 Gatenby Place, Barden Ridge sold for $1.735m in August 2025
Top of Sydney’s ‘Rising’ quintile was Barden Ridge.
The Sutherland Shire suburb has risen 10 per cent in the last 12 months, and the report expects it to grow a further 3-4 per cent over the next six.
This strong year of growth has brought the median house price up to $1.825m.
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This home on Bayview’s Pittwater Rd sold for $3.3m in December
Top of the ‘Professional’ group was Bayview in Sydney’s Northern Beaches.
The median house price currently stands at $3.225m, a figure expected to grow 3-4 per cent in the next six months.
Households in the waterside suburb bring in $2,202 per week, according to the report, while homes last an average of 35 days on the market.
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64 Cowper St, Randwick sold for $3.8m in December
The report expects Randwick to grow the most of Sydney’s ‘Affluent’ suburbs over the next six months.
The home of racing in Sydney’s east has a median house price of $3.95m, which is predicted to grow by 2-3 per cent.
Freestanding homes make up just 14 per cent of the suburb where the average household weekly income is $2,829.
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