Sydney house rents have reached new records and tough conditions lie ahead.Credit:
Powell said households would find rental increases “extremely challenging” as the cost of other essential goods and services was up too.
“It’s likely we’ll see more households shift into rental stress. This is a broad-based lift we’re seeing in Sydney. There are some areas that have remained below their rental peaks but with escalating costs of living for essential items,it does put households under pressure,” she said.
Westpac senior economist Matthew Hassan said the return of international students and other migrants was starting to have some impact,with numbers in Sydney now tracking between 30 and 40 per cent of pre-COVID levels.
He said demand could reduce somewhat once renters who are waiting for new homes to be built are able to move out of their rental.
“That could siphon off some demand in the rental market,” he said.
Inner west renters Jess Brooker (left) and Rhiannon Earl said it took them two months to find a liveable rental,but only after a $100 increase to their budget.Credit:James Alcock
For inner west renters Jess Brooker and her partner,it took two months to find a suitable home to live in,and only after a rental budget increase from $600 to $700 a week,which costs them between 30 and 40 per cent of their incomes.
“For our initial price range,we couldn’t find anything liveable,” Brooker said. “We were looking for a two-bedroom place because I work from home and my girlfriend works in the office full-time.”
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She said they inspected numerous rentals that needed repairs to security screen doors and maintenance of mould,but agents told the couple the rentals would be leased as is.
The city’s rental market is so competitive that in many instances the couple were asked to put down a deposit before an inspection in order to secure the property.
“You have to apply before you actually see it,and then they will want the deposit that day;otherwise you get knocked back,and the deposits were non-refundable,” Brooker said.
“For example,I saw a property[online] in the afternoon – it was posted eight hours before and the deposit was already taken when I queried about it.”
The inner west had the highest quarterly increase to weekly rents,jumping 6.7 per cent to $800 in the three months to June.
Tenants’ Union of NSW chief executive Leo Patterson Ross said Sydney still had a fundamentally undersupplied rental market that had never improved in real terms during the pandemic.
With housing costs one of the largest expenses for households,rent rises are the latest cost of living pressure to hit pay packets.Credit:Ken Irwin
“The falling rents[during the pandemic] were largely because people were falling into economic crisis. It wasn’t because of an abundance of genuine affordable housing coming online. It was because of people losing their jobs,” Patterson Ross said.
The ongoing lack of official rental relief measures at a time Sydney was facing its fourth COVID wave,wage stagnation and economic uncertainty would cause renters hardship in coming months,Patterson Ross said.
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LJ Hooker Group head of property management Nick Georges said that,while there were multiple factors for rising rents,the biggest was the city’s unprecedented housing boom that has locked out potential buyers.
“A lot of young families are saying,‘I’m going to rent something for 12 months or 18 months and ride this wave out and see what interest rates do,’ ” Georges said.
“I don’t think we can put it on people coming back to the country … A lot of the houses are being filled up by people who are in the market to buy.”
He said the supply of rentals had also reduced since the pandemic hit because of investors selling their investment properties or moving back into them.
Georges said with the sheer number of applicants on each rental property,it has become almost commonplace for prospective renters to offer up to six to 12 months of rent in advance in places like the north shore.
With Melissa Heagney