Is now a good time to upsize? Why the real gap matters more than market timing
Most upsizers wait for a booming market before they move. That’s exactly backwards, and it’s not really about the market. It’s about a gap most people underestimate before they’ve even started looking.
Why does upsizing in Sydney cost more than you’d expect?
Here’s the pattern I see on repeat. Someone overestimates what their current place is worth, and underestimates what the next one actually costs. Not because they’re bad at maths. Because they’re not pricing in scarcity.
A two bedroom house or a two bedroom apartment in Sydney is relatively easy to find. A genuine three or four bedroom family home with two bathrooms is not. That property type is scarcer, so it holds a premium the market rarely gives up, even when everything around it is softening. The gap between what you’ll get for your place and what you’ll pay for that next one is almost always bigger than people expect, because they’re comparing percentages, not the actual property types on either side of the trade.
That’s the real reason a rising market punishes upsizers more than it helps them. When everything’s going up, the scarce end goes up in bigger dollars than the common end. The gap widens. A flatter market does the opposite. It’s not that upsizing gets “cheap”, it’s that the gap stops working against you.
What is the Sydney property market doing right now?
The Reserve Bank held the cash rate at 4.35% through its August 2026 decision [1], and the major banks are split on what’s next, with none forecasting a cut before 2027. That stretch of higher rates has already cut into what buyers can actually borrow, with typical borrowing capacity down around 7.0%, roughly $53,000 less than at the peak [2]. Off the back of that, Sydney dwelling values fell 1.4% in July, the steepest monthly fall of any capital city, down 4.0% over the quarter and 2.0% over the year [3].
Vendors are feeling it too. The average vendor discount, the gap between what a home is first listed at and what it actually sells for, has widened to 3.9% [2]. At the same time, auction clearance rates have been climbing back, from a low of 42.3% earlier in the year to 57.7% for the week ending 6 September, an 18-week high [4]. Vendors accepting more of a discount while more auctions are actually clearing is what a genuine, broad softening looks like in practice, not a market that’s stalled.
There’s one more detail worth sitting with if you’re upsizing specifically. Over the year to June, Sydney house sales volumes fell 5.5%, while unit sales volumes fell 6.9% [5]. Demand for the scarcer property type is holding up a touch more than demand for units, even while the broader market goes quiet. It’s not proof of anything on its own, but it’s consistent with what scarcity usually does: it keeps some floor under the thing that’s harder to find, even as everything around it softens.
That’s a genuine, broad softening, not a blip. It’s the kind of window where the gap stops widening against you, which is different from saying any specific part of the market is now “cheap”. I’m not going to pretend the citywide numbers tell you what’s happening to the exact three or four bedroom home you’re after, they don’t go into that much detail, and neither will I.
I want to be clear about what this isn’t. It isn’t a prediction that Sydney prices are about to fall further or rise again, nobody genuinely knows that, and anyone who tells you they do is guessing. It’s a description of where things actually sit this month, and what that means for the specific trade you’re weighing up.
Should you buy first or sell first when upsizing?
I had a client whose own sale fell through after they’d already committed to buying the bigger place. It was genuinely frightening for them. They found another buyer eventually, but they had to extend the settlement on their new purchase to make it work, and it’s the kind of situation that pushes people toward bridging finance out of necessity rather than choice.
Buy before you sell and you’re carrying two properties, hoping your sale lands where you need it to, on someone else’s timeline. Sell before you buy and you’re out of your home with a deadline, negotiating from a weaker position because everyone can see you need to move. Neither is comfortable. What actually helps is knowing your numbers before you’re in either position, not scrambling to work them out once you’ve already found the place. If bridging finance is genuinely on the table for your situation, that’s a conversation for your broker, not something to work out on the fly mid-negotiation.
What should you check before you decide to upsize?
Before you decide, get real numbers instead of guesses:
Get your current home properly appraised, not guessed at, so you know its realistic sale price today
Work out what that leaves you needing to find for the home you actually want, three or four bedrooms, two bathrooms, not a compromise
Compare the two in dollars, not percentages, since a small percentage move on a pricier home is a much bigger real cost
That number tells you whether now works. A headline about the market being “up” or “down” doesn’t.
If your family’s already spilling out of the house you’re in, ask yourself what waiting for a “better” market is really costing you. Another year of the kids sharing a room, another set of school holidays with everyone underfoot and nowhere to put them, that’s the real cost, and it doesn’t show up on any market report.
The best time to upsize was never about the market hitting a particular number. It’s about the gap being small enough to jump, and for a lot of Sydney families right now, in a market everyone assumes is the wrong time, it actually is.
If you’re weighing this up for real and want to know what your own numbers say rather than what the headlines say, that’s exactly what a Focus Session with Michelle May is for.
Frequently asked questions
Is now a good time to upsize in Sydney?
There’s no single right time for everyone. What matters is your own gap: what your current home will realistically sell for versus what the next one costs. A flatter market narrows that gap rather than widening it, which is different from saying prices are cheap.
Should you buy first or sell first when upsizing?
Buying first means carrying two properties while you wait for your sale to land. Selling first means moving out with a deadline and negotiating from a weaker position. Neither is comfortable, so work out your numbers and finance before you’re locked into either position.
How do I work out the real cost of upsizing?
Get your current home properly appraised, not guessed at, then work out what that leaves you needing to find for the home you actually want. Compare it in dollars, not percentages, since a small percentage move on a more expensive home is a much bigger real cost.
Why does a rising Sydney market make upsizing harder?
Scarce properties like a genuine three or four bedroom family home hold their premium even when the market softens, so when everything rises, the scarce end rises by bigger dollar amounts than the common end. That widens the gap between what you sell for and what you pay.
Do I need bridging finance to upsize?
Not always, it depends on whether your sale and purchase line up. If they don’t, bridging finance can cover the gap, but the mechanics and whether it suits your situation are a conversation for your mortgage broker, not something to work out mid-negotiation.
Sources
RBA Statement by the Monetary Policy Board, August 2026
Cotality Monthly Housing Chart Pack, August 2026
Cotality Home Value Index, July 2026 data, as reported by Property Investment Professionals of Australia, August 2026
Cotality Property Market Indicator Summary, week ending 6 September 2026
Cotality data, as reported in NAB Sydney Property Market Insights, June 2026
Michelle May is an independent buyer’s agent in Sydney and the host of the Buy Your Side podcast. She helps serious buyers buy smarter and protect the biggest investment of their life.