The Sydney suburbs where you should be renegotiating rent
Landlords are under renewed pressure to cut rents and many are now offering weeks of free rent to attract tenants – but renters’ chances of getting a bargain vary across suburbs.
Tenants are being urged to renegotiate their rent as international border closures during the COVID-19 pandemic continue to put downward pressure on the rental market.
Advertised apartment rents in Sydney have dropped by nearly 10 per cent over the past year, while house rents dropped by an average of 6.4 per cent, data from SQM Research revealed.
It comes as close to 27,000 rental properties sat empty across the Harbour City at the end of December – roughly 3.6 per cent of the city’s stock of rental housing.
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The higher vacancies have been attributed to a drop in international student arrivals and lower migration intake, which thinned competition for rentals. There has also been a surge in first homebuyer activity, with more tenants leaving rentals to move into their first homes.
The suburbs with the biggest drops in rents tended to be the areas that had previously attracted the most overseas arrivals.
Apartment rents in the CBD dropped by nearly 26 per cent and nearly 8 per cent of the properties remain vacant.
There were similar drops in some of the suburbs surrounding the University of NSW, including Kensington, Randwick and Kingsford.
Apartment rents in these areas dropped by 14-18 per cent annually. Randwick had an additional 23.9 per cent drop in house rents.
Vacancies and falls in rent were rare in many other markets across the country.
Just 0.7 per cent of the rental housing in Adelaide was vacant, while in Brisbane it was 1.8 per cent, according to SQM Research.
Melbourne’s rental market, meanwhile, has been the worst hit by the pandemic: about 4.7 per cent of rentals were empty in December.
SQM Research director Louis Christopher said Sydney and Melbourne were at odds with the rest of the country.
“It’s clear Sydney and Melbourne apartment investors were the losers of 2020 with rents and prices falling,” he said.
“However, if you owned an investment property in Darwin or Perth, or indeed regional Australia, you have had one of the best years ever.”
Real Estate Institute of NSW chief executive Tim McKibbin said the year ahead would be difficult to predict and it was not known what impact reductions in government assistance would have.
“The job market continued to strengthen during December, but as we begin 2021, many tenants may still be faced with tough financial decisions to make due to the drop in government (payments) from January 1,” Mr McKibbin said.
It was also hard to predict what affect sea- and tree-changers would have on the market, he said.
Families making a move to outer suburbs or regional markets was one of the notable trends for the housing market in 2020.
“(We) may see tenants either returning to the most popular city areas or abandoning the city altogether for a search change to regional NSW or elsewhere in Australia,” Mr McKibbin said.
Finder.com.au insights manager Graham Cooke said tenants who wanted cheaper rent should review rents offered for comparable properties. “Compare what similar properties in your area are going for and negotiate with your landlord on a rental price that more accurately reflects market rate,” he said.
SUBURBS WITH SIGNIFICANT ANNUAL DROPS IN UNIT RENTS
Sydney CBD -26%
Parramatta CBD -9.7%
Mascot -15%
Wolli Creek -14.6%
Kensington -18.3%
Rosebery -22.7%
Randwick -15.4%
Zetland -16.8%
Alexandria -19.6%
Darlinghurst -23.5%
Source: SQM Research
Originally published as The Sydney suburbs where you should be renegotiating rent