Fiona Killman, Real Estate Reporter
First published 5 Jul 2023, 5:00am
There is more “unfortunate news” for renters across Sydney. Picture: Jeremy Piper
Sydney units have recorded the biggest annual rent increases of any market across Australia.
Rental pain across the Harbour City continues to grow as scarce supply drives up competition, resulting in rent increases.
The latest PropTrack Market Insight Report has revealed that median advertised rents in Sydney rose 3.3 per cent to $620 per week over April to June – $100 more than the national median. This is up 13.8 per cent compared to the June quarter of 2022.
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Sydney unit rents rose a staggering 3.5 per cent over the quarter to be 19 per cent higher year on year, which PropTrack described as “the most notable annual increase of any property type and market nationally.”
Competition continues to ramp up at rental inspections. Picture: Jeremy Piper
Median unit rents are also 19 per cent higher than pre-pandemic in Sydney.
Sydney house rents remained stable over the June quarter however are up 6.3 per since the same time last year.
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“The unfortunate news for Sydney renters is we are continuing to see brisk growth,”
PropTrack Economist Angus Moore said.
PropTrack economist Angus Moore.
“If you are looking compared to a year ago rents are up double digits which is brisk by any standard. That’s particularly true for units where prices are up nearly 20 per cent over the past year which is pretty staggering growth.”
He said part of the story for units was a catch up from when rents fell during 2020-2021.
“The other reason is just extremely strong demand for rentals and very few available,” he said.
“We like to use rental vacancy rates as a measure of rental availability. Depending on the month you are looking but they are sitting broadly at 1.5 per cent in Sydney over the first half of this year. That’s about half or even less than it was pre pandemic.
Rents have increased at an “eye-watering pace” over the past year. Picture: Joel Carrett
Rents have increased at an “eye-watering pace” over the past year. Picture: Jeremy Piper
“It means there’s not a lot of rentals and when they do become available they are leasing very quickly and that means it’s more competitive and rents are growing as a result.”
Mr Moore said with vacancy rates low, rents would continue to increase over the coming months.
“Whether they grow at the same eye-watering pace we saw over the past year is a different question,” he said.
However he said the silver lining was that rental stock was growing.
Regional rents have dropped 3.6 per cent. Picture: Gaye Gerard
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“We are seeing a larger share of new mortgage lending than there was during the pandemic, we are also seeing more new to the market rental properties coming in and fewer being sold,” he said.
“It’s a slow adjustment, the number of new investors in any given month is pretty small relative to the total size of the rental market. So it will take a while for that to have a big impact on rental availability.”
Meanwhile regional NSW house rents dropped 3.6 per cent over the quarter to sit at $530 per week.
“The good news for regional renters is rent growth looks to be moderating after three years of brisk growth,” Mr Moore said.
“Median rents were flat in the June quarter, with rents for units even declining modestly. That
slowing in rent growth is consistent with improving
rental availability in regional markets.
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