House prices in Sydney have increased substantially over the last ten years. The median price of established houses was $473,630 in 2003 and reached up to $811,837 in June 2014, an increase by around 70 per cent. Many families are forced into the rental market as they cannot afford to own a home at such high prices. According to Demographia (2014), the Median Multiple (median house price divided by gross annual median household income) for Sydney is nine times, compared to 6.2 times in New York and 7.3 times in London. This research studies the main determinants of house price increased in Sydney using the quarterly data collected from Australian Bureau of Statistics and Reserve Bank of Australia. By applying the multiple regression analysis, it is found that the fundamental elements such as population growth, interest rate and the number of house supply were the main factors that contributed to price increased for the last ten years in Sydney.