Calling all tenants: Rents flat in Sydney

17.10.14The latest RP Data Quarterly Rental Review may have some good news for renters in the greater Sydney area. While the annual rate for units and houses increased by 1.3 per cent nationally, rents for houses in Australia’s capitals showed a striking 0 per cent growth.

Indeed, when looking at Sydney in particular, New South Wales’ capital saw only a 1 per cent quarterly rise in median rent for houses – one of the lowest rises among the other capitals. Melbourne, Darwin, Hobart and Adelaide all posted higher increases in median rent.

Even more staggeringly, Sydney units showed a 0 per cent increase in rent over the quarter, leaving the median rent at $500 a week. This suggests that those looking to currently rent in the Harbour City may benefit by turning their attention to units rather than houses.

According to RP Data National Researcher Tim Lawless, this could be chalked up to the fact that capital gains were rising at a much faster pace than rents, pushing yields lower. Mr Lawless singled Sydney out in particular for this.

Renters will also find it interesting that while house rents across Sydney may have risen, this only applied for certain properties. Houses with five or more bedrooms saw their rents fall by 2.4 per cent over the September quarter. Houses with four bedrooms, meanwhile, saw no change in their rental values, while three-bedroom houses increased by 1.1 per cent.

Given this, it would seem Sydney renters would do well at the moment to look at either apartments or houses with a larger amount of bedrooms. These market statistics also have important implications for property investors, too. Despite the fact that Sydney investor activity is clustered in its central areas, suggesting a strong focus on units, investors may do better to depend on property value growth rather than rental income.

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