Until recently, the family were renting a $2,700,000 five-bedroom home in Bondi and the children were enrolled in top private schools.
"They [Sacha and Isla] are surprised by the public interest in their move to Sydney, they thought they left the headlines and paparazzi behind in Los Angeles," the source added.
In a recent chat with WHO to promote her Disney+ flick Godmothered, Isla shared a rare insight into her marriage.
"It was in a great window for me in terms of timing," she revealed when asked what stuck out to her about the role.
"So obviously, my husband is in show business, so we can’t work at the same time … and that was a window where he could help."
The couple tied the knot in March 2010 and Isla converted to Judaism in order to have a Jewish ceremony.
"He’s so kind hearted and it’s beautiful that he’s funny, but even more beautiful that he’s kind," Isla gushed to WHO of her husband as part of the 2019 Most Beautiful People issue.
"He’s really considerate of me even if I try and do something nice for him. I booked him a massage on holiday and I’d already had a massage but he said ‘No I’ll take less time, so Isla can have another little massage’. He’s just very thoughtful."
It seems as if the family are set to stay Down Under and Isla has nothing but good things to say of her home country.
"I have to say; the most beautiful country is obviously Australia and my favourite place is down south on the Margaret River in South Australia," the redheaded beauty revealed to WHO.
"It’s like my spiritual home, I love it so much and I feel so beautiful and confident when I’m there. It’s got such a link to my childhood and who I am."