Some Sydney landlords are asking for as much as 30 per cent more rent than this time last year, making it tough for tenants amid a broader cost-of-living crisis.
Houses and units in suburbs from the northern beaches to the west, south-west and inner west, recorded a double-digit surge in the year to September, Domain’s latest Rent Report, released on Thursday, revealed.
Sydney overall recorded the slowest quarterly growth in four years. However, asking rents remain unaffordable, sitting at record highs of a median $775 per week for houses and $720 for units. The vacancy rate was 1.1 per cent, up from 0.9 per cent this time last year, but still low.
The Sydney suburbs that have had the strongest rates of growth are quite scattered, Domain head of research and economics Dr Nicola Powell said. Some were in affordable areas west of the city, others were sought-after inner suburbs.
“People are reevaluating, they’re compromising on location and property type, and the affordability factor is very poignant,” she said.
“They go to a bridesmaid suburb that has cheaper rent or has better levels of supply. They might get a housemate or house share, while some tap out completely and move back in with mum and dad.”
House asking rents rose the most in Collaroy on the northern beaches, up 30.6 per cent over the year to $1,600 per week. It was followed by Wiley Park in the Canterbury-Bankstown region, up 29.7 per cent to $720 per week. The south-west suburb of Warwick Farm was next, up 27.9 per cent to $550.
The next biggest jumps in house rents were Villawood, Illawong and Beaconsfield, all up at least 24 per cent.
Asking rents for units rose the most in Roselands in the Canterbury-Bankstown region, up 31.8 per cent to $580 per week. It was followed by St Marys in the west, up 28.9 per cent to $480 per week. Revesby in the Canterbury-Bankstown region was next, up 27.4 per cent to $685.
Powell said different markets across the city will continue to rise at differing speeds.
“In the coming quarters and months we’ll likely see a deceleration in that annual change. We will see fewer suburbs in that 20 per cent or 15 per cent bracket and more hitting 10 per cent or 5 per cent,” she said.
Centre for Independent Studies chief economist Dr Peter Tulip disagreed, predicting that rents will most likely continue to soar.
“Rents have a lot of persistence in their growth rates. A higher CPI indicates higher inflation, well above wage increases, and that’s likely to continue for the rest of the year,” Tulip said.
Some renters are relocating to the country for affordability, which Tulip said has a significant impact on the economy.
“We’re losing a lot of our brightest and most entrepreneurial young people, and allocating our labour badly,” he said.
“It’s most productive in Sydney, but we’re telling a lot of our young people to move out to the country where there aren’t jobs or opportunities.”
Director of renter’s agency The Rent Fairy Sarah Elkordi said renters are trying to increase their chances of securing a property.
“More so in the south-west, west, eastern suburbs and the inner west, many clients are targeting properties that are lower than the top end of their budget,” she said.
“We had a family whose maximum was $800 per week. They targeted properties around the $700 mark and then offered $50 to $100 more to secure it.”
Elkordi said some clients are happy to offer up to six months rent in advance and six out of ten times that application gets approved.
Sydney renter Trent Foo, a 23-year-old actor, is hoping to be able to renew his lease in February on his Glebe share house.
His three-person household has had one rental increase since moving in early in 2023, but feels lucky to have a three-bedroom house with a back garden for a total of $2000 per fortnight.
Trent Foo, 23, at his rental in Glebe.Credit: Louise Kennerley
Even so, he has to watch his spending. He avoids taking Ubers except to the airport and has to budget for groceries.
He previously rented a Balmain share house on arrival in Sydney from Perth, paying $350 a week for a room from December 2022. It took three months of couch-surfing and Airbnb stays until they secured the property.
After inspection and signing the lease, they arrived to find cockroaches, animal hairs and cigarette butts at the Balmain property.
“My housemates and I had a terrible experience, terminating the lease and going to tribunal due to the home’s unhygienic state,” Foo said.