Landlords slash rents in popular inner city suburbs as number of vacant homes climbs

A SPIKE in the number of vacant rental homes has forced landlords to slash prices in some of Sydney’s most popular suburbs.

RENTING an inner Sydney home has become easier the past year as a spike in the number of vacancies pressures landlords into dropping prices.

Falls in rents have been most visible in Bondi Junction, Waterloo, Neutral Bay and Manly, where average weekly advertised rents dropped by $50 or more — saving new tenants as much as $2600 in annual rental payments.

The average weekly rent on houes in Manly has dropped over the past year. Photo: Bob Barker.

Cheaper rent was matched by a rise in vacant inner city homes, which encouraged landlords to advertise their properties at cheaper rates or risk having them vacant for longer periods.

The vacancy rate went from 1.7 per cent of rentals in April to the current 2.6 per cent, Real Estate Institute of NSW data shows.

Apartment rents in Milsons Point have also dropped.

REINSW president Malcolm Gunning said it was the highest vacancy rate since 2005 and showed that a glut of apartments were released onto the market last year, many of which failed to attract tenants quickly.

It is a different situation in Sydney’s outer suburbs, where the proportion of rentals without a tenant fell to 1.7 per cent.

“There are declining vacancy rates in outer-western Sydney because the construction cycle has lagged the inner city and big infrastructure projects are driving demand,” Mr Gunning said.

“We are seeing people moving from the mines to these areas because there are many jobs in construction.”

Rent on 45 Ben Boyd Rd, Neutral Bay is currently advertised at $850, a fraction short of the suburb's $900 average weekly rent.

SQM Research’s Louis Christopher explained that regions with low vacancy rates will usually see an increase in rents. The opposite is true for suburbs with a high vacancy rate.

“The vacancy rates we’re seeing in outer Sydney show there is a lot of demand for property,” he said.

Pyrmont renters Jacques van der Merwe and Maria Carrara welcomed the ease in inner city prices, but say rental properties were overpriced to begin with.

“You don’t get a lot of value from a rental home these days,” Mr van der Merwe said. “Decent homes are usually expensive, while the cheaper homes are not the kind you’d want to live in.”

12-MONTH FALLS IN AVERAGE WEEKLY ADVERTISED RENTS

Manly houses $125

Bondi Junction houses $75

Killara houses $70

Milsons Point units $53

Avalon Beach houses $50

Neutral Bay houses $50

Little Bay houses $43

Peakhurst units $27

Surry Hills houses $25