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Tenants are facing record high rents across much of the country, but there are still select few pockets where homes are being advertised for less than they were five years ago.
Median asking rents in a handful of suburbs were below 2018 levels last year, while costs in more than a dozen others have only increased marginally over the five-year period, data from the latest Domain Rent Report shows.
Sydney rents are at record highs, but asking rates in some suburbs have changed little since 2018, while some have moved lower. Credit: Peter Rae
Most were Sydney and Melbourne suburbs that were hard hit earlier in the pandemic, and had yet to recoup their losses – despite sharp rent increases last year. However about half were pricier suburbs that offer little opportunity for average renters.
Domain’s chief of research and economics Dr Nicola Powell said rents in suburbs popular with students, tourists and new arrivals were particularly affected when COVID-19 hit.
“That five year growth is really capturing the dips that occurred in the pandemic,” she said.
“Those locations where there were [typically] a lot of international students or visitors had some of the largest rent declines.”
A change in the types of housing available for rent, could also affect the median, Powell noted.
Median house rents in Sydney’s affluent Bellevue Hill last year were still 8.3 per cent below 2018 levels, at a weekly asking rent of $2200, despite sharp rises over the 12 months to December. Houses in Greenwich were also down marginally, 0.4 per cent lower than five years earlier.
Meanwhile, apartments in waterfront Milsons Point, McMahons Point and Hunters Hill were among those with comparatively limited rental growth, up less than 5 per cent, as were houses in Millers Point. Only suburbs with a minimum of 30 advertised rentals in both 2018 and 2023 recorded a five-year change.
In Melbourne, rents for units in Albert Park and houses in Ashburton and East Melbourne had limited increases, while apartment rents in Macleod were down 20 per cent – though local agents said the drop in the median was affected by an increase in available student housing options.
That’s despite record high house and unit rents across Greater Melbourne and Sydney in the December quarter, and five-year gains upwards of 25 per cent in Melbourne and about 30 per cent in Sydney.
Agents largely attributed the declines and marginal growth to steep pandemic losses. Demand declined in popular tourist and student areas, as international visitors returned home and new arrivals halted, while supply increased as short-term accommodation converted to the longer-term rental market, some of which had yet to revert.
Inner, and more expensive suburbs were also affected, as remote working, as well as job losses, prompted tenants to look to more affordable properties further afield, that could also offer more space.
Raine & Horne Double Bay’s property management team leader Matthew Serrao said the rent achieved for houses in Bellevue Hill took a hit as the spending power from professionals relocating to Sydney eased, first because of cuts to accommodation allowances and then because of closed borders.
“We had a lot of expats [previously] getting allowances that were a lot higher than they are now … then we had the pandemic hit,” he said, but noted rents had been catching back up to where they were and appeared, at least on the ground, to have fully recovered.
In Melbourne, Caine Real Estate business development manager Jordan Palma said demand for East Melbourne houses had been through the roof of late, but had previously seen sharp declines.
“During the pandemic we had quite a few more rental listings, especially from short-term accommodation companies … but that’s all dissipated now, but those landlords are less inclined to go back to short-term stays,” he said.
“There was obviously a drop in rents … and afterwards it took a good year or more to get back to where they were.”
Ray White Macleod asset manager Tara Lawson said units in the suburb took a hit in lockdowns as people sought more space, but felt rents had recovered since, and that the median was being skewed down by student accommodation – with 135 properties in one student housing development in the suburb.
“Any normal renter would tell you there’d be nothing available [at the median of $260 per week],” she said, noting two-bedders were renting from upwards of $400 to $440 per week.
Rents were also weaker in Malua Bay on the NSW South Coast, down 14.3 per cent to $600.
My Agent Team property manager Sarah McQueen said Malua Bay was now a tenant’s market due to increased supply. But it had come after a tough few years, with the region hit by bushfires in 2019, and subsequent rental shortages which were exacerbated by a surge in sea-change activity during the pandemic.
”Three years ago, when I was looking myself, I had to take what I could get,” she said.
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