Sydneysiders have seen their weekly rental cost climb yet again, despite new figures revealing prices have stalled in most other cities across the country.
The average cost of renting a dwelling in Sydney has risen by 1.8 per cent in the December quarter, the second highest lift in prices across the country after Melbourne, where rent rose 2.3 per cent according to the latest PropTrack report.
Nationally, prices have remained the same at an average of $480 per week, while the cost of a dwelling in Sydney has reached $560 per week – a 7.7 per cent increase from the end of 2021.
Rental costs will be “something to watch” in 2023 according to report author Cameron Kusher, who says the ongoing lack of supply is likely to continue pushing up prices throughout the year.
“Vacancy rates in Sydney are still very low,” he said.
“Inquiries are still very strong for rental accommodation, the number of properties available for rent is still very low and the properties are leaving the market very quickly.”
Tenant Union chief executive, Leo Patterson Ross said the data was “not at all surprising” and matched what he had heard from renters around the city.
“Over Christmas, things tend to be quiet, but it also means it’s been very difficult for people to find a home when they are being moved around.”
Despite the city seeing a rise in costs across all dwellings on average, the cost of renting a house specifically fell by 3.1 per cent in the December quarter to now sit at $630 per week. While this may appear to be a silver lining for larger households, Mr Kusher said it was likely more a reflection that people were moving from homes to units than an indication prices had finally peaked.
“What’s happened is people are getting a lot more price sensitive, but they’re also becoming more willing to live in the inner city areas and in units,” Mr Kusher said.
“So in order to try and save costs, people are looking to move out of houses and into units where they can make a fairly significant saving on their rent.”
The median price for renting a unit is $100 less per week than a house in Sydney.
The vacancy rate in Sydney sat at 1.4 per cent in November 2022, according to SQM Research, a large drop on its high of 4.3 per cent in May 2020.
Mr Patterson Ross blames inconsistency in housing for the lack of supply in Sydney.
“What we have is a mismatch between what the community needs and what the market is supplying,” he said.
“We have historically been building enough properties, but what is not matched is what people need both in terms of kind of the location, the quality, and size, and the markets providing.”
In NSW’s regional areas, the trend has moved the other way, with no change to the cost of dwellings through the December quarter and a fall of 3.8 per cent for houses with the median rent for a home now sitting at $500 per week.