Sydney house rents have jumped by 3.9 per cent in the past year, with the eastern suburbs up by 8.3 per cent, new figures show.
Sydney house rents have jumped by 3.9 per cent in the past year, with the eastern suburbs up by 8.3 per cent, new figures show.
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Sydney has recorded its steepest annual jump in house rents in five years, according to research released on Thursday, and the blame is falling on first-home buyers.
The Sydney median house rent jumped 3.9 per cent over the past year to an all-time high of $530 a week, according to the Domain Group Rental Market Report.
The jump comes on the back of a strong June quarter with rents up 1.9 per cent.
The steepest jump in rents has been felt in Sydney’s eastern suburbs, growing by 8.3 per cent to $975 over the past year and Ray White leasing agent Jimmy Fish isn’t surprised.
He says he’s had “crazy” interest in a two-bedroom Surry Hills terrace. “I’m just application processing for it right now and at the midweek open we had 10 groups through, so that property is incredibly busy,” Mr Fish said.
“We’re getting lots of young couples through who could potentially be first-home buyers priced out, but also some roommates too.”
Domain Group said across Sydney, apartment rents were steady at $500 a week over the June quarter.
Experts say demand for rentals has been propped up by a ballooning number of would-be first-home buyers staying in the rental bracket while they endeavour to save for their own properties.
“Does the news get any worse for first-home buyers?” said Domain Group senior economist Andrew Wilson.
“Not only are they having to find on average an extra $400 a week for their deposit based on current prices growth, they’re now having to find extra rent while waiting in the queue.”
In April, first-home buyers made up just 6.5 per cent of all home loans in NSW, according to data from the Australian Bureau of Statistics, modelled by Dr Wilson.
He said high rates of immigration and population growth were also putting upward pressure on rents.
“We would have thought that given that we have record numbers of investors, supply might have caught up to demand, but the new supply just can’t match the demand,” said Dr Wilson.
Bill Randolph, director of the city futures research centre at the University of NSW, said the jump in rents was “disconcerting”, particularly given the amount of new home building that was taking place across NSW.
“I think the logic of the market suggests that as supply increases, rent increases should fall back – but that’s not to say rents will fall,” said Professor Randolph.
Apart from the strong growth in the eastern suburbs, house rents on the northern beaches are up 5.6 per cent over the year to $950 a week while the west and south-west regions have both grown by 4.7 per cent to $450 a week
The strongest increases in apartment rents have been felt in the city’s south and south-west, which grew by 4.5 per cent and 3.3 per cent respectively.
St George Bank senior economist Hans Kunnen said investors were spending more on properties and, as a result, asking more in rent.
“With prices going up, investors are trying to maintain their yield,” he said.
The research showed Sydney yields were steady over the quarter but remain the lowest of all the capitals at just under 4 per cent.
“I think these numbers will just increase the number of investors interest in Sydney market – there’s no relief in sight,” said Dr Wilson.
“If you’re a property owner, it’s great news, but if you’re a tenant, this is a bad news story.”