Unit rents in almost every suburb in Sydney are more expensive than a year ago, as renters chase more affordable property types amid the cost of living crisis.
Far-flung suburbs dominated the list of strongest rental growth for units in Sydney with the top 20 all increasing by 20 per cent or more in the year to June.
This helped asking rents for the typical unit in Sydney rise 2.9 per cent – or $20 a week – to $720 a week in the June quarter on Domain data. Meanwhile, asking rents for a typical house in Sydney remained flat at a record of $750.
Lakemba led the way where unit asking rents increased 31.6 per cent in the year to June to $500 a week.
That was followed by a string of neighbouring suburbs in Canterbury Bankstown, Sydney’s west and south. Belmore’s unit rents rose 31 per cent, Jannali and Penshurst rose by 28.9 per cent each.
For houses, while Bellevue Hill recorded the strongest increase of 35.3 per cent to $2500 a week, a string of more affordable, western Sydney suburbs climbed.
Warwick Farm jumped 29.4 per cent and South Granville and Wiley Park were both up 27.3 per cent.
Domain chief of research and economics Dr Nicola Powell said the increase in unit rents across Sydney pointed to tenants chasing, and competing for, affordable locations and property types.
“The strongest rates of rental growth particularly for units is at that lower end. It is showcasing how stretched Australians are. Affordability is at the forefront of renters’ minds,” Powell said.
“We have seen unit rents see stronger rates of consistent growth compared to houses over the last couple of years.”
Mascot renter Stephen Pasfield and his wife will have to move in with their daughter, who is also renting, after facing multiple rental increases.
“We’re just locked out completely. And the real estate agents they know they have a market price that they can continually increase because people haven’t got a choice. The demand is so great, there is so little [sic] properties to choose from,” said the 65-year-old, who is also a carer for his wife.
The couple, already in rental stress paying $950 a week and expecting another rent rise, are drawing down on their superannuation to make ends meet even as he works part-time.
Stephen Pasfield is struggling with his ever increasing rent on his Mascot apartment in Sydney. Another rent increase means he and his wife may have to move in with his daughter. Credit: Janie Barrett
“We’re continually stressed out about when our superannuation runs out. It’s always a concern when you’re at this stage of your life,” Pasfield said.
“Some years back it would have been easy to consider renting for the rest of your life, but now it’s extremely difficult,” he said. “We do think about moving to rural areas, but then you think about proximity to hospitals, friends and family. It’s a problem.”
Tenants agent and founder of The Rent Fairy Sarah Elkordi said tenants across the board were being squeezed by increasing rents.
“It’s just ridiculous at the moment,” Elkordi said.
“The cost of living is tough on renters and the constant increases are causing people to move. Moving in with family or people they don’t know and even interstate.”
Elkordi said tenants who were compromising on location were falling into unsuitable homes.
“You’re going further for less but the quality of living is also less … [one renter] lived in a one-bedroom apartment in Westmead because it was one train into the city, but they were sick because it was covered in mould.”
St George Bank chief economist Besa Deda said demand for more affordable areas away from the Sydney CBD and coastline was set to continue.
“Anecdotes do point to people looking for more affordable rental homes, particularly amid the cost of living squeeze which is still continuing, so people are pulling their purse strings tighter,” she said.
A handful of affluent areas bucked the trend. Aside from Bellevue Hill, house rents jumped in North Bondi (29 per cent) and Coogee (26.3 per cent).
“Within the inner city ring and close to the coastline, those areas will continue to remain popular,” she said, “but I also would anticipate those households that are feeling the squeeze a bit more from the cost of living would perhaps be looking to move.”
She said pressure on rents will continue because of a shortage of dwellings and very strong population growth, while residential construction is likely to soften.
But she noted the rate of growth was softer as tenants who may have lived alone in the lockdown years look to share a house or rent out a spare bedroom to cut costs.
“I don’t think they’ll continue to accelerate at the pace we saw last year, but I think the rate of growth will remain at a pace that will mean households will continue to face that cost of living squeeze.”
With Elizabeth Redman