Sydney’s rental market has reached new record levels, with tenants facing higher weekly costs as available housing remains limited.
The median Sydney rent reached $841 a week in June, making the city the most expensive capital city rental market in Australia. Rental prices have continued to rise amid low vacancy rates and strong demand for available properties.
Data from property analysts showed rental markets across Australia recorded further increases during the June quarter, with Sydney among the cities experiencing continued growth. The national vacancy rate remained at historically low levels, with Sydney’s rental vacancy rate recorded at 1.9 per cent.
The median asking rent for a Sydney house jumped 6.3 per cent, or $50, to a record high of $850 a week in the three months to June, the latest Domain Rent Report, released on Thursday, reveals.
A typical Sydney unit hit a record of $780 a week in rent, after spiking 4 per cent, or $30, over the quarter. This was the fastest quarterly increase in three years, according to Domain. On an annual basis, unit rents jumped 6.8 per cent or $50 a week.
Dr Nicola Powell, Domain’s chief residential economist, said the abrupt rise was unusual.
“It’s … out of sync to the seasonal dynamics of what we would normally see,” Powell said.
“We’ve got to remember the rental market was tight even before the budget changes came through. So the reason we are here today is because Sydney is grossly unaffordable.”
The number of rental listings has remained below historical averages, limiting options for tenants searching for homes. Analysts said the shortage of available properties had reduced competition among landlords and left renters with fewer choices.
Sydney’s rental increases have occurred alongside broader changes in the housing market, including shifts in investor conditions and ongoing demand for rental properties. Property analysts said the full impact of recent policy changes affecting investors would take time to become clear.
A spokesperson for federal Housing Minister Clare O’Neil said: “We know renters are doing it really tough at the moment in a very tight rental market. That’s why we’re making renting easier, fairer and more affordable, with longer leases, stronger tenant protections and more help to pay the rent: increasing Commonwealth Rent Assistance by more than 50 per cent by delivering the first back-to-back increases in 30 years.
“Our policies are increasing supply overall and will put downward pressure on rents over time but importantly, we want more renters to become home owners – and our tax changes will help 75,000 renters to do that.”
With vacancy rates remaining low and rental costs at record levels, Sydney tenants continue to face a challenging market as demand for housing exceeds available supply.
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