The Sydney Morning Herald reported on July 23 that the latest data shows that rents in some suburbs in Sydney are cheaper than a year ago.
Experts say that while rents for single-family homes in Sydney remain at an all-time high of $750 a week, rental conditions remain tight, with tenants in even high-end residential areas feeling the ongoing cost-of-living crisis.
Domain data shows that in the year to June, only 20 Sydney suburbs saw a decline in single-family rents, bucking the general upward trend, but almost all of them had a median weekly asking price of $1,100 or more.
Clovelly led the way with the biggest drop of 16.2%, with the median weekly asking price falling to $1,550. This was followed by a range of suburbs in Northern Beaches, the City of Sydney and the East, which were most in demand at the height of the pandemic, including Palm Beach (down 11.1% to $1,600) and North Curl Curl (down 8.4% to $1,500).
As for units, only two boroughs saw rents fall over the same period: Katoomba (down 2.6% to $380) and Lavender Bay (down 0.4% to $628). Meanwhile, the median rent for units in Sydney reached a record $720.
(Image source: The Sydney Morning Herald)
St George chief economist Besa Deda said rents for single-family homes in prime living areas were falling because tenants had reached the upper limit of affordability.
"Tenants may have reached their limits on affordability, which is in line with Sydneysiders looking for more affordable suburbs, and moving away from those more expensive beach suburbs."
She warned that as more Sydneysiders seek relief from the cost-of-living crisis, unit rents will only increase, even in affordable areas.
"I expect that rental growth for units will outpace that for single-family homes because units are more affordable...... You'll see more of this growth in affordable areas. ”
"While the data is showing some signs of slowdown, we are still seeing a situation consistent with the tight rental market."
(Image source: The Sydney Morning Herald)
Michael Anania, head of property management at Laing+Simmons, said Beach City recorded the biggest drop in rents as they saw the biggest increase during the pandemic. And now, tenants are facing a cost-of-living crisis on all fronts.
"It's all based on affordability. It seems to me that they have reached their limits. Anania said.
"We found out that they moved lower on the northern beaches and moved some inland. We have 3 tenants who have recently done this. They moved because they had to go back to the office three days a week, which made it more expensive, unlike during the peak of the coronavirus, where we had the flexibility to choose to live. ”
(Image source: Internet)
Anania said many large families have also moved into units, not only to find more affordable rentals, but also because units require less maintenance under the demands of full-time jobs in big cities.
Sarah Elkordi, founder of Rent Fairy, said that urban areas where rents have fallen show that tenants have reached their limits and are no longer willing to pay such exorbitant rents for substandard rental properties.
"People want high-quality housing, but also affordable. Quality properties and rental prices in the eastern suburbs are not what they are looking for. ”
(Image source: Internet)
Elkordi claims that in some of Sydney's most sought-after areas, wages are not growing as fast as rents, so tenant demand is lost.
For example, she said, a tenant who no longer wanted to live in Bondi was not only due to high rents, but also because the tenant was sick due to mould growth due to the fact that the rental property was in a defective building.
She also noted that demand for one-bedroom properties is waning as more tenants choose to share the cost of rent.
"Living close to the beach is no longer realistic and unattainable...... People are moving for lower rents to meet their standards and budgets. ”