Hamish Blake’s dilemma shines light on Sydneys rent crisis

Logie winning funny man Hamish Blake’s experience with Sydney’s rent market, shows the price squeeze might not be all it seems.

Despite all the data driven headlines about huge rental price increases, the anecdotal evidence from many individual landlord situations does not show any significant price growth.

Indeed it seems that many landlords only just manage to get the same rental income they had been pocketing before the pandemic which triggered dramatic rent falls.

Hamish Blake, the comedian, has a Kings Cross rental which was recently put up for rent at $750 a week. That was the same asking rent he was getting in 2019, but less than the $850 he was seeking when it came up for rent between 2015 and 2018.

The $750 a week was however up on the $675 asking rent of May 2020 when the pandemic had prompted the marked exodus from rental markets.

Gold Logie winner Hamish Blake gives a thumbs up to the Logies on the Gold Coast. But his rental investment isn’t travelling as well. Picture: Nigel Hallet

Blake’s circumstances are typical – and of course there’s been sizable capital growth since he bought the top floor 1925 two bedroom apartment 12 years ago for $760,000.

But the annual holding costs will have spiralled, and returns have shrunk.

Sydney has the lowest gross rental yields of all the capital cities at 3.2 per cent according to PropTrack’s Cameron Kusher who noted that with fewer investors purchasing to rent out, the limited supply of stock coupled with strong renter demand was leading to the current heightened circumstances.

Blake’s Potts Point apartment building.

Median weekly advertised rents increased by 4.3 per cent over the September 2022 quarter to be 10.3 per cent higher year-on-year, the strongest growth over the past seven years.

This week saw the response by the NSW Fair Trading minister Victor Dominello that he’s looking into banning rent bidding.

It’s not a particularly enduring practice by property management agents and is certainly putting vulnerable people at risk of over paying.

Queensland and Victoria already have laws that rents have to be advertised at a fixed price.

There won’t be much of an outcry at the Dominello proposal, even if it comes from the party that has historically represented market forces on Macquarie Street, rather than the interventionist approach by government south and north of our borders.

Rent for the home is down on what it was seven years ago.

But many landlords – and not the avaricious ones – won’t take kindly to the government further regulating their lot.

Church Point was pinpointed by The Daily Telegraph this week as having the state’s highest annual rent increase – up 46 per cent to $1425 a week.

But scratch beneath the Church Point median movement and its landlords face a similar scenario as Blake

There’s only been a handful available, but a $1200 a week rental had been a $1200 rental offering in June 2020, so no change in the rent whatsoever.

But it had been a $1350 a week back in 2018.

According to data from the Tax Office, NSW has 524,000 investors owning one rental property. That drops off to 150,000 owning two, 48,000 with three, 18,000 with four, and 7,600 owning five and 7800 owning six or more.

Originally published as Hamish Blake’s dilemma shines light on Sydneys rent crisis