Sydney suburbs experience rent increases of 30%,
Some landlords in Sydney are increasing rent by as much as 30 percent compared to this time last year.
This surge is creating difficulties for tenants amid the ongoing cost-of-living crisis affecting many households across the region.
According to Domain’s latest Rent Report released on Thursday, both houses and units have seen double-digit increases through September.
The overall Sydney market recorded the slowest quarterly growth in four years.
However, asking rents remain unaffordable, with a median of $775 per week for houses and $720 for units.
The current vacancy rate is 1.1 percent, which is an increase from 0.9 percent this time last year.
Despite this increase, the vacancy rate remains relatively low in the market.
Dr. Nicola Powell, head of research and economics at Domain, noted that growth rates in Sydney suburbs are quite scattered.
Some areas experiencing growth are more affordable, particularly west of the city, while others are sought-after inner suburbs.
“People are reevaluating their choices, compromising on both location and property type due to affordability concerns,” she explained.
As a result, many are opting for suburbs with lower rents or better supply options.
Some individuals are even considering housemates or returning to live with their parents for financial relief.
Collaroy, located on the northern beaches, saw the highest increase in house rents, rising 30.6 percent to $1,600 weekly.
Following this, Wiley Park in Canterbury-Bankstown experienced a 29.7 percent increase, bringing rents to $720 per week.
Next, Warwick Farm in the south-west saw a 27.9 percent rise, with asking rents reaching $550 weekly.
Villawood, Illawong, and Beaconsfield also experienced significant increases in house rents, each rising by at least 24 percent.
In terms of units, Roselands in Canterbury-Bankstown recorded the highest increase, up 31.8 percent to $580 per week.
St Marys, located in the west, saw a 28.9 percent increase, with rents now at $480 weekly.
Revesby, also in Canterbury-Bankstown, followed closely with a 27.4 percent rise to $685 per week.
Dr. Powell mentioned that different markets across Sydney will continue to rise at varying rates and speeds.
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“In the upcoming months and quarters, we are likely to see a slowdown in the annual change of rents,” she explained.
She predicted fewer suburbs would see increases of 20 percent or 15 percent, with more hitting the 10 percent or 5 percent range.
However, Dr. Peter Tulip, chief economist at the Centre for Independent Studies, disagreed with this assessment.
He predicted that rents will likely continue to rise significantly over the coming months and quarters.
“Rents show strong persistence in their growth rates,” Tulip noted, indicating a trend that is unlikely to change soon.
He added that a higher Consumer Price Index (CPI) signifies increased inflation, which exceeds wage growth, impacting rental prices.
Some renters are relocating to rural areas in search of more affordable options, affecting the overall economy significantly.
Tulip expressed concern, stating, “We’re losing many of our brightest and most entrepreneurial young people to these moves.”
He emphasized that this misallocation of labor is problematic, especially when the most productive jobs are in Sydney.
“It’s most productive in Sydney, but we’re encouraging young people to move to rural areas lacking jobs and opportunities,” he said.
Sarah Elkordi, director of the renter’s agency The Rent Fairy, mentioned that renters are increasing their chances of securing properties.
“In areas like the south-west, west, eastern suburbs, and inner west, clients are targeting properties below their maximum budgets,” she said.
For example, one family had a budget of $800 per week but targeted homes around the $700 mark.
They then offered an additional $50 to $100 to secure the property they wanted, which is becoming more common.
Elkordi shared that some clients are willing to pay up to six months of rent in advance, increasing their approval chances.
In fact, six out of ten applications with this strategy get approved, highlighting a competitive rental market.
Sydney renter Trent Foo, a 23-year-old actor, hopes to renew his lease in February for his share house in Glebe.
His three-person household has experienced one rental increase since moving in early 2023, making them feel fortunate.
They have secured a three-bedroom house with a back garden for a total of $2,000 per fortnight in rent.
Despite this, Foo has to be careful with his spending and avoids Ubers, only using them for airport trips.
He also needs to budget carefully for groceries and other living expenses to manage his finances effectively.
Upon arriving in Sydney from Perth, he initially rented a share house in Balmain for $350 per week.
It took him three months of couch-surfing and Airbnb stays before securing a more permanent property.
After inspecting and signing the lease, Foo and his housemates found the Balmain property in poor condition.
They encountered cockroaches, animal hairs, and cigarette butts upon arrival, which was disappointing and concerning.
Foo stated, “My housemates and I had a terrible experience, leading us to terminate the lease and go to tribunal.”
The situation highlighted the importance of proper living conditions and the challenges renters face in the current market.
