Urban areas have broad ecological footprints with complex impacts on natural systems. In coastal areas, growing populations are advancing their urban footprint into the ocean through the construction of seawalls and other built infrastructure. While we have some understanding of how urbanisation might drive functional change in terrestrial ecosystems, coastal systems have been largely overlooked. This study is one of the first to directly assess how changes in diversity relate to changes in ecosystem properties and functions (e.g. productivity, filtration rates) of artificial and natural habitats in one of the largest urbanised estuaries in the world, Sydney Harbour. We complemented our surveys with an extensive literature search. We found large and important differences in the community structure and function between artificial and natural coastal habitats. However, differences in diversity and abundance of organisms do not necessarily match observed functional changes. The abundance and composition of important functional groups differed among habitats with rocky shores having 40% and 70% more grazers than seawalls or pilings, respectively. In contrast, scavengers were approximately 8 times more abundant on seawalls than on pilings or rocky shores and algae were more diverse on natural rocky shores and seawalls than on pilings. Our results confirm previous findings in the literature. Oysters were more abundant on pilings than on rocky shores, but were also smaller. Interestingly, these differences in oyster populations did not affect in situ filtration rates between habitats. Seawalls were the most invaded habitats while pilings supported greater secondary productivity than other habitats. This study highlights the complexity of the diversity-function relationship and responses to ocean sprawl in coastal systems. Importantly, we showed that functional properties should be considered independently from structural change if we are to design and manage artificial habitats in ways to maximise the services provided by urban coastal systems and minimise their ecological impacts.