‘Silver lining’ in Sydney’s rental crisis

Sydney rental prices have hit a record new high but there could be relief in sight for tenants.

Fiona Killman

@FionaKillman

2 min read

January 9, 2024 - 5:00AM

Weekly rental prices across Sydney have been climbing by “double digits”. Picture: Jeremy Piper

Sydney rental prices have recorded “double digit” growth over the past year to hit an all time high of $700 per week.

And while there are indications the rental crisis has started to ease across parts of the country, experts say the signs are not obvious for Sydney.

The latest PropTrack Market Insight Report reveals that continued demand and a lack of stock resulted in Sydney’s median advertised rents rising by 16.7 per cent in 2023 – with Sydney firmly hanging onto its title of the most expensive city across the country.

The December 2023 quarter alone saw a rise of 1.4 per cent in median rents to $700 per week.

Rents continue to climb across Sydney, with little hope conditions will ease. Picture: Lisa Maree Williams/Getty Images

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Both unit and house rents jump significantly over the past year, rising 17.2 per cent and 13.6 per cent respectively. The average house rent across Sydney is now $750 per week, while unit rents are $680 per week.

“We are heading into the new year with a similar story across Sydney,” PropTrack senior economist Angus Moore said.

“We are seeing strong growth in rents which are growing by double digits across houses and units. That’s extremely, extremely quick and driven by the fact there’s not that many available rentals. Vacancy rental rates in December were below 1.5 per cent.”

Mr Moore said growth was faster for house rents in 2023 compared to 2022, while unit growth was slightly slower.

Long line ups for rental inspections will continue to be the norm across Sydney. Picture: Adam Yip

“Sydney is in a different position where rents in general were soft in 2020 and 2021 and have grown quickly since,” he said.

“We are still seeing that fast growth.”

While the latest data indicates an easing of rental prices in many areas across the country, the same can’t be said for Sydney.

“Unfortunately it’s not so much the case for Sydney,” Mr Moore said.

“Quarterly growth rates are a little slower for units over the last couple of quarters.

PropTrack senior economist Angus Moore.

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“Sydney is continuing to see pretty strong growth. Maybe the fact that rental growth is starting to slow down across the country means we could eventually see things slow in Sydney. It’s a silver lining but not a big one.”

The rental market is heading into its busiest time of the year, with both availability and competition ramping up.

“It will be a busy time but unfortunately the reality on the ground remains to be a challenging time for renters,” Mr Moore said.

A 2 bedroom home in Leichardt is hitting the Sydney rental market for $850 per week in January

Meanwhile, regional NSW has seen conditions easing with both house and unit rents staying the same over the last quarter at a $520 per week.

Mr Moore said the outlook was “slightly better for regional renters” across Australia.

“Median advertised rents have been stable for two consecutive quarters, sitting at $500 per week since June,” he said.

LJ Hooker Group’s head of research Mathew Tiller said the supply/demand imbalance and a lack of new housing being constructed across Australia, whether it’s social, affordable, high-density, or granny flats, will continue to be an issue for housing markets over the coming year.