Best suburbs for tenants: where Sydney rents have dropped the most since Covid-19 hit

Tenants have been saving up to $4800 on annual rent in some Sydney suburbs, with research revealing where renters have the most power to negotiate a better deal with landlords.

They’re the Sydney suburbs where tenants hold all the cards and landlords have had to slash their prices.

Leasing data has revealed tenants in some Sydney pockets have been saving up to $4800 a year on rents despite rental prices beginning to surge across much of the city.

Tenants have been getting the biggest savings in inner suburbs, areas near universities and high-density locations where there is an abundance of newly built apartments.

MORE: Iconic stables up for grabs

How much average Aussie has in bank

These areas included a cluster of suburbs south of the CBD, such as Waterloo, Kensington, Kingsford, Beaconsfield and Mascot, according to the research by real estate technology group Juwai IQI.

The annual falls ranged from about 14.7 per cent in Kingsford to about 8.6 per cent in Beaconsfield.

There were also drops of about 7-14 per cent across much of the inner west, including in Leichhardt, Marrickville, Ashfield, Burwood, Concord West and Strathfield.

A unit in this building on Alison Rd in Kensington was renting for $630 per week before borders closed, now the rent is $500 per week, a drop of $130.

Juwai IQI executive chairman George Chmiel said the biggest drag on rents in most of these areas was the absence of international students, who used to form a sizeable part of the tenant pool.

“Every one of these suburbs has lost thousands of international students,” he said.

My Housing Market economist Andrew Wilson said tenants in high-rise pockets and regions impacted by fewer student numbers would be in a good position to negotiate lower rent.

“The supply is well ahead of demand in these areas,” he said.

The drops in average advertised rent in some areas came as rents rebounded in the rest of Sydney, especially across low density suburbs dominated by houses.

Unit 701 in this building on Anzac Parade in Kensington is for rent at $195 per week cheaper than last year.

This Rainbow St unit in Kingsford was renting for $625 per week pre-Covid, now the rent is $550 per week.

House rents for the Greater Sydney region rose 8.3 per cent over the past year and there were about 5000 fewer vacancies in June than the year prior, SQM Research showed.

Units for the Greater Sydney area dropped by about 1.5 per cent over the same period.

Realestate.com.au director of economic research Cameron Kusher said there was a general trend of tenants seeking out larger houses in further flung suburbs.

This meant there was a mismatch in house and unit rents – demand for rental houses was “very strong” but tenant demand for units was “much weaker”, Mr Kusher said.

It could take years for inner city landlords to recover from the closed international borders, he added.

“We can’t assume the overseas students will just come straight back when the borders reopen,” Mr Kusher said.

Source: Juwai IQI

“The longer our borders are closed the more students will look to the UK or USA, where it’s easier to get in so there could be scarring on those inner city apartment markets for some time.”

Mr Wilson said it was not year clear what impact the latest lockdown was having on the rental market but the supply of available listings would likely drop.

“There will be fewer tenants moving on so it may be harder to find a house, but that won’t really affect that inner city unit market. Rents will still be lower in those areas.”