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Key insights from our Sydney business report
Sydney is in the midst of rapid growth and transformation
The people of Sydney are passionate about their city, for good reason. Sydney is a dynamic, diverse and globally significant city that plays a critical role in Australia’s economy and reputation on the world stage. While the city continues to face challenges, particularly around housing, infrastructure and cost of living pressures, there is also clear momentum as government, business and communities innovate and collaborate toward a thriving future.
In this report, we explore some of the powerful forces shaping Sydney’s future. From productivity, infrastructure investment and housing supply to artificial intelligence, social inclusion and sustainability. Most importantly, the analysis is grounded in real insights and lived experiences from Sydneysiders across business, government and community sectors.
Download it today.
CHAPTERS IN THE REPORT:
Sydney continues to be an economic powerhouse, underpinned by a large and diversified economy and a highly skilled workforce.
Real estate, education, energy, and technology continue to attract attention, even as investors take a measured stance.
Sydney remains an economic powerhouse for Australia, thanks to a diversified economy and skilled workforce.
Economic growth in 2024–25 was modest, at approximately 1–1.5% in real terms, reflecting the impact of elevated interest rates, cost-of-living pressures and subdued productivity growth.
While finance, services, health and education continue to support economic resilience, insolvency rates remain elevated, particularly across construction, hospitality and retail, with Western Sydney emerging as a key hotspot, highlighting the growing need for targeted policy and business support.
Devika Shivadekar
"Understandably, the approach to business investment has been cautious, and fairly muted, but overall, the Sydney economy is moving in a positive direction.”
Sydney is undergoing a transformative infrastructure boom, with investment set to exceed $30bn in 2025–26.
This infrastructure is essential to address some of the key issues impacting Sydneysiders:
- Growing disconnects between where people live and where jobs are located.
- Transport connectivity, particularly between the CBD and Western Sydney.
- Energy infrastructure and grid upgrades to support net zero ambitions.
Major milestones achieved or progressing include Sydney Metro West tunnelling completion, Parramatta Light Rail Stage 2, significant road infrastructure upgrades, and the ongoing development of Western Sydney International Airport ahead of 24-hour operations commencing in 2026.
However, large-scale infrastructure delivery is placing pressure on labour and materials, often constraining the residential construction pipeline. Major builds absorb labour and materials, squeezing smaller residential delivery just when affordability matters most.
Sydney needs to find the balance: delivering the big network pieces that enable scale without starving the local housing and community projects that make neighbourhoods liveable.
Read on for more details on infrastructure developments in Sydney >
Paul Nicolaou
“People living and working in Sydney have won the golden ticket, with significant positive policy progress that spans federal, state and local government responsibilities being delivered across the city.”
Leading Cities > Sydney > Wealth
Sydney’s wealth story is increasingly defined by housing pressure and widening inequality.
Sydney is the second most expensive city in the world to buy a home, with a median house price that hit $1.759,909m in December 2025.
Sydney remains one of the most expensive housing markets globally. As at late 2025, the median house price reached approximately $1.75–1.8 million, reinforcing barriers to home ownership for many households. Housing has increasingly functioned as an investment asset, contributing to rising wealth disparities.
The implications are significant:
- Dual income households continue to experience financial stress
- Women over 55 are among the fastest growing groups experiencing homelessness
- The gap between home owning retirees and renters has widened substantially
Looking ahead, an estimated $5.4tn intergenerational wealth transfer is expected nationally by 2050, largely driven by housing and superannuation, reshaping financial security and succession planning for future generations.
Grace Bacon
“There is a genuine question around the reality of a future where there are a growing number of ‘haves and have nots’ when it comes to wealth.”
Sydney ranks in the world’s top ten sustainable destinations as it continues to build on its sustainability strategy.
Sustainability is becoming embedded in how Sydney operates and grows.
Sydney continues to make progress toward its environmental objectives, supported by widespread rooftop solar adoption, electrification of public transport, growing renewable generation and mandatory climate reporting now in force for large organisations.
While opportunities are expanding, particularly around clean energy, digital infrastructure and ESG integration, challenges remain, including landfill capacity, climate risk management and the need for coordinated action across government, business and communities.
Productivity is in focus for Sydney businesses grappling with rising costs, skills shortages and regulatory hurdles.
Despite recent job cuts across banking, government, and tertiary education, business confidence is at a three-year high, with many planning to expand their workforce as short-term finance improves.
Falling overseas migration is causing concern for sectors reliant on temporary workers, particularly hospitality, retail, construction, and health care. The drop in international students is also straining our universities as they contend with unprecedented challenges. Looming shortages in health, aged care and social services could leave more than 60,000 older residents without support by 2041.
Yet, there are bright spots on the horizon.
As the home to Australia’s highest density of venture capital and leading technology firms, Sydney is poised to lead in digital tech, clean energy, medtech, and advanced manufacturing for years to come.
Get the full sector-by-sector breakdown inside the report >>
Jeremy Gill
“Sydney’s key to success is the fact that we have a network of innovation districts and clusters of innovative activity right across the city. Coherent innovation, from hubs like Tech Central, to Macquarie Park, Randwick to Westmead and Liverpool; there’s real strength in an innovation ecosystem like that.”
Sydney remains a ‘bucket list’ destination for tourists.
NSW led the nation in visitor numbers and expenditure in 2024-25, as the government unveiled plans to turbocharge the visitor economy.
Tourism, events and the 24 hour economy continue to generate strong economic contributions, supporting jobs and cultural vibrancy. However, the arts and creative sectors face ongoing pressure from rising costs and funding constraints, with some institutions and organisations experiencing staffing reductions and financial strain.
Despite these challenges, investment in major cultural institutions, events, precinct development and night time economy initiatives continues to reinforce Sydney’s global appeal.
A key constraint remains hotel capacity, particularly during major international events, underscoring the need for continued accommodation investment.
Learn how Sydney is making sure to stay at the top of everyone's travel list >
Carmen Pavlovic
“The theatre and musical theatre sector is a key driver of Sydney's economy, with a ripple effect that extends far beyond the box office and direct economic contributions; the sector helps shape the city's identity through dynamic storytelling and offers serious community cohesion and liveability credentials.”
FOR FURTHER ENQUIRIES, CONTACT OUR TEAM:
ACKNOWLEDGEMENTS
Thank you to the following individuals for their valuable input:
- Paul Nicolaou: Executive Director, Business Sydney
- Jeremy Gill: Head of Policy, Committee for Sydney
- Kelly Power: CEO Superannuation and Investments, Colonial First State
- Long-term RSM client: Father, grandfather, great-grandfather, academic, CEO-level consultant, Member of the Order of Australia (AM), wealth transferer
- Reverend Stu Cameron: CEO and Superintendent, Wesley Mission
- Ben Lloyd: Managing Director, Trinity Fitout & Construction
- Lisa Ffrench: Director of Strategic Projects, Powerhouse
- Anna Acopian: Founder and CEO, SafegateAI
- Carmen Pavlovic: CEO and Producer, Global Creatures
- Lauren Haas Jones: Head of Social and Environmental Impact, Sydney Opera House
- Matt Swieboda: Group Director, Love Tilly Group
- Carolyn Deornelas: Marketing Manager, RSM Australia
