2 hours ago
1
House rents in one Sydney suburb rocketed by over 40 per cent in the last 12 months, with several others shooting up more than 20 per cent.
While the median house rent in Sydney has hit a record of $850 a week, rising by 6.3 per cent over the last quarter alone, some suburbs logged much steeper climbs.
The steepest recorded by the latest Domain Rent Report was in Abbotsford in the inner west, where asking rents for houses jumped 41.3 per cent to a median $1300 a week.
It was followed by Milperra in the Bankstown area with a 29.4 per cent rise to $1100 a week, and Monterey in the south, up 28.9 per cent to $1225.
“The growth of rents in Sydney has been just extraordinary,” said Domain chief residential economist Dr Nicola Powell. “The vacancy rate remains at a record low for this time of year, and the supply of housing is just so tight.
“But we’re seeing that all the areas with the biggest growth in house rents have a smaller sample of house rentals as against units, so that scarcity is also driving up rents.”
Other surges in house rents have been in Dover Heights in the east, up 25 per cent to $3500 a week, nearby North Bondi and the south’s Brighton-le-sands, both up 22.4 per cent to $2600 and $1200 respectively, and South Coogee and inner-city Forest Lodge, each up 21.9 per cent to $1950 and $1280.
But there’s little relief for tenants when it comes to unit rents.
In Concord West in the inner west, the median unit rent soared 24 per cent to $645, while in Enmore it went up 19 per cent to $643, and in the inner city’s Millers Point up 18.2 per cent to $1300.
For those trying to escape Sydney’s sky-high rents by commuting from the Central Coast, the news wasn’t much better. The next biggest unit rent increases were in Wamberal, at 18 per cent to $590, and Gosford, at 16.4 per cent to $640.
Powell said the better affordability of units drives many tenants to them, which drives up rents.
“The tax changes coming through from the budget in negative gearing, capital gains tax (CGT) and self-managed super funds (SMSFs) not buying residential property will impact new investors significantly, so there may be fewer properties on the market to rent, although that hasn’t come through in the data yet. But that’s likely to push up rents in the future too, while it seems some landlords are raising rents in advance.”
That kind of forecast has persuaded renter Krista Bleakley, 29, to start looking for somewhere to buy.
She’s rented for the last four years, after moving to Sydney from the NSW North Coast. But after being forced to move three times in that period, and since the landlord of her shared unit in Fairlight tried to raise her rent by a third, she can’t face it any more.
“It’s a never-ending cycle of waiting for each new agreement, expecting an increase and then working out if you can afford it,” Bleakley, a dementia consultant, said. “You have no ability to plan for the future as you have no long-term security.
“I’m in the fortunate position of having family support to help me buy, and not everyone has that. But I can’t go home as my work is here, and while I understand people choose to invest to better themselves, I think housing security is a right that all Australians should have too.”
PRD chief economist Dr Diaswati Mardiasmo believes the increases in Sydney house rents are a result of demand and supply, with nearly all the new developments being units, making houses look even more desirable.
“So whenever a house comes up for rent, it’s being snapped up quickly with a lot of competition for the tenancy and the rent going up as a result,” she said. “We’re currently seeing a lot of people band together to rent houses together for the extra space and backyards, like two single mothers with kids, or two couples, with one having the upstairs and the other downstairs, to make the rent more affordable.”
Mortgage and finance advisor Enosh Tampoe, of Smartmove Professional Mortgage Advisors, believes the anticipated drop in supply of investor properties will lead to rents rising like they did in New Zealand when negative gearing was effectively abolished in 2021.
The policy was reversed by the new government when elected in 2023, although the Reserve Bank of New Zealand concluded the number of investors leaving the market was more a result of interest rates rising steeply.
“Here, pre-budget, we had three rate hikes this year, and so landlords have tried to increase their rental income to offset the difference in costs,” Tampoe said.
