SYDNEY RENTS FALL $20/$25 RECORDING BIGGEST ANNUAL FALL IN 15 YEARS

WHAT does a price fall of $20 really amount to in the scheme of things?

-a fall of $20 in Sydney house rents over the past year

-unit rents having fallen by $25

… it’s perhaps not a lot with sluggish wages growth … it’s the cost of a cappuccino for each tenant in a ‘share house’ ….

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  • Sydney rents record biggest annual fall in 15 years in good news for tenants

Sydney house rents have dropped by $20 in the past year, while unit rents have fallen by $25 in the same period.

Sydney rents record biggest annual fall in 15 years in good news for tenants

TAWAR RAZAGHI TWITTER JOURNALIST JUL 10, 2019

Sydney tenants are enjoying the biggest annual fall in rents in at least 15 years amid a continuing market correction that began last year, new figures show.

The median house rent fell by 3.6 per cent over the year to June, down to $530 per week. Prices began to fall last year and the latest data means they are still at 2016 levels, according to the Domain Rental Report for the June quarter, released on Wednesday.

Unit rents fell by 4.5 per cent over the same period, down to $525 per week, returning them to 2016 prices. 

Sydney’s building boom — which peaked in 2018 — has driven the turnaround in rents, but it remains the most expensive capital in which to rent a unit, Domain economist Trent Wiltshire said.

“Record rates of construction has been flowing through to rents for a while and you can see that through the vacancy rate,” Mr Wiltshire said. Sydney’s vacancy rate is 3.2 per cent, compared to 2.4 per cent a year ago.

“It’s a bit of a win for tenants. But Sydney is still very expensive compared to other capitals,” he said.

Sydney median weekly house rent 

JUN-19JUN-18QOQ CHANGEYOY CHANGE
Blue Mountains$430$450-2.30%-4.40%
Canterbury Bankstown$520$550-1.90%-5.50%
Central Coast$450$4402.30%2.30%
City and East$1,000$1,050-4.80%-4.80%
Inner West$750$785-2.60%-4.50%
Lower North Shore$995$1,050-0.50%-5.20%
North West$600$6250.00%-4.00%
Northern Beaches$970$980-2.50%-1.00%
South$630$650-3.10%-3.10%
South West$460$4750.00%-3.20%
Upper North Shore$800$7951.90%0.60%
West$450$4650.00%-3.20%
Source: Domain Rental Report, June quarter, 2019.

House rents fell most in Canterbury Bankstown, sliding 5.5 per cent over the year down to $520 per week, followed by a 5.2 per cent fall on the lower north shore to $995.

The largest drop in unit rents, of 5.5 per cent, was on the upper north shore, with the median now $520, closely followed by the south-west, with a 5.3 per cent decline to $360.

The Agency national director of property management Maria Carlino said Sydney’s huge construction pipeline had finally had an impact.

“It’s definitely a tenants’ market, they haven’t been silly in relation to offers,” Ms Carlino said. “They’ll come in with [an offer] 10 per cent cheaper and negotiate from there.”

She had noticed a glut of one-bedroom apartments on the north shore, while two-bedroom units and new builds leased quicker.

Landlords unwilling to negotiate asking rents or spend on a renovation to spruce up their investment property risked losing income while it remained vacant, Ms Carlino said.

Sydney median weekly unit rent 

JUN-19JUN-18QOQ CHANGEYOY CHANGE
Blue Mountains$345$350-1.40%-1.40%
Canterbury Bankstown$420$4400.00%-4.50%
Central Coast$380$3700.00%2.70%
City and East$650$6600.00%-1.50%
Inner West$540$560-1.80%-3.60%
Lower North Shore$600$6000.00%0.00%
North West$490$5100.00%-3.90%
Northern Beaches$600$610-3.20%-1.60%
South$500$520-2.00%-3.80%
South West$360$3800.00%-5.30%
Upper North Shore$520$5500.00%-5.50%
West$430$450-2.30%-4.40%
Source: Domain Rental Report, June quarter, 2019.


LJ Hooker head of property management Amy Sanderson encouraged owners to price rentals competitively. 

Both said the general rule of thumb owners should ask was whether they would accept living in the property themselves.

“Forget the location and bedrooms: just looking at it … if the answer is no, then you may need a bit of a refresh,” Ms Sanderson said. “If you’ve got a property that looks tired, tenants will walk out and look at another place”. 

Tenants Union of NSW senior policy officer Leo Patterson Ross was more sceptical about whether the rental market was tipped in favour of tenants.

“We still have ridiculously high rents, we’re still not allowed to have pets, we’re still not allowed to choose when to stay and leave,” Mr Patterson-Ross said. 

“It’s recovering from such a long period of very restricted supply. We need to stay above 3 per cent [vacancy rate] for a few years straight … before we really see conditions change in a substantial way.”

Mr Patterson-Ross said a lot of demand remained in Sydney’s rental market that was not captured.

“You’re either living in your parents house or you’re living in a location you don’t want to be in and you’re waiting for your location to become available,” he said “So as soon as we build in Chatswood and Macquarie Park, people who are working in those areas and living in the west will want to come in.”

National median weekly rents

Median rentQoQYoY
Sydney$530-1.9%-3.6%
Melbourne$430-2.3%0%
Brisbane$400-2.4%0%
Adelaide$385-1.3%2.7%
Perth$3650%4.3%
Canberra$550-3.5%0%
Darwin$490-2%-2%
Hobart$4500%9.8%
Source: Domain Rental Report, June quarter, 2019.

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SOURCE: https://www.domain.com.au/news/sydney-rents-record-biggest-annual-fall-in-15-years-in-good-news-for-tenants-857727/

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