Apartment rents are still rising across Sydney despite more blocks coming onto the market. Photo: Dean Osland
Sydney may be in the grip of an apartment boom, but the construction of thousands of units across the city has done little to put a lid on rents, according to an analysis of the latest rental data.
Apartment living became more expensive in Sydney in the year to September 2016, after rent increases in all but three of the city’s local government areas, according to the NSW Tenants’ Union’s Rent Tracker report.
The report’s analysis of rental bond data, which was collated and published by the NSW government, found there were more tenants in NSW than ever before, “with bonds held in the Rental Bond Board rising much more quickly than the population.”
The data revealed new rents in parts of Sydney had risen significantly, including Auburn and Hurstville where they increased by 11 per cent, while rents in the Blue Mountains rose by 14 per cent.
“Apartment rents are growing faster than house rents at the moment,” said Leo Patterson Ross, the Tenants’ Union’s advocacy and research officer.
Mr Patterson Ross attributed this to the paradoxical effect of increased supply of new apartment blocks pushing up median rents.
“As new stock comes on, and as old stock gets replaced, the prices are boosted,” he said.
More than 5200 apartments were built in the Sydney, Parramatta and Rockdale local government areas in the past year, but new rents for those areas continued to rise by about 5 per cent.
But Mr Patterson Ross cautioned that the data was only indicative of broad rental trends and needed to be supplemented with further data, such as building completions, to deliver a full picture.
In Botany Bay, for example, rents dropped by 5 per cent over the past year, but had spiked the previous year due to an influx of new apartments and was likely to represent a mild correction, he said.
With housing affordability already earmarked by both the federal and NSW governments as key agenda items, the issue of supply as the key driver of prices was set to remain contentious.
In the rental market, the impact of an unaffordable housing market could be seen in increased numbers of people renting for longer, Mr Patterson Ross said.
“Rents are still going up. In real terms in Sydney, they are higher than they’ve ever been. The amount of new buildings being built is not enough to meet the demand.”
While half of renters in Sydney lived in units and were more likely to live in the city’s inner and middle suburbs, there was some good news for renters living in houses.
Rental bond data showed rents across many western Sydney suburbs from Burwood to Penrith remained stable, while rents in Hunters Hill, Ashfield and Manly all decreased between 4 and 5 per cent in the year to September 2016.
However, house rents in Mosman increased by 18 per cent, more than any other part of the city, while Auburn and Woollahra both increased by 14 per cent.
Visentin, L. (2017). New data shows Sydney suburbs with fastest rising rents. [online] The Sydney Morning Herald. Available at: http://www.smh.com.au/nsw/new-data-shows-sydney-suburbs-with-fastest-rising-rents-20170131-gu22j6.html [Accessed 1 Feb. 2017].