House rents across Sydney increased by over $20 in the final quarter of 2021, according to a new report confirming the steepest annual increase since 2009.
Data from Domain’s December 2021 rental report has revealed that house rents in Sydney jumped a record 9.1 per cent last year, hitting a record high of $600 a week.
This increase was also felt in the Inner West (though not as strongly), with annual house rents in the area rising by only 2.7 per cent since the end of 2020.
A select few suburbs experienced a more significant increase, with rents in Balmain East and Haberfield jumping by 11.7 and 12.2 per cent respectively.
Unit rents also saw an increase, albeit by only one per cent, marking the first annual increase for units in almost four years.
The report noted that although rents are rising, the pace of quarterly growth had eased for both houses and units.
This comes after house rents in the Inner West jumped by at least $50 in the September quarter in 2021, despite the ongoing lockdown.
Domain’s previous rental report in September 2021 showed that Sydney’s house rental market was the third most expensive in the country among capital cities, a position which it’s held since December 2020.
Vacancy driven change
Last year, City Hub reported that rising property vacancies induced by factors such as the absence of temporary migrants were potentially shifting leverage to tenants.
While speaking to City Hub in June, Leo Patterson Ross, CEO of the Tenants’ Union of NSW, expressed doubts of the sustainability of a perceived shift in the market, saying that landlords were not offering tenants better maintenance, “longer leases [or] pets by default” in their agreements, adding that “people were being offered basically the same deal, just a little bit less expensive”.
In response to the growing number of high-density Sydney dwellings in oversupply, President of the Property Owners Association of NSW, John Gilmovich, said that landlords “just don’t have the numbers to fill these vacancies”, while showing concern for landlords who had invested in the inner city.
The Australian Department of Home Affairs has in recent months worked to prepare for the reintroduction of international students into the country, who are believed to be able to fill critical holes in the nation’s hospitality sector and temporary migration housing market. Fully vaccinated international students have been able to enter Australia without a travel exemption since December 15, with the Federal Government also endorsing arrival plans from the NSW government.
The report expects competition to secure rentals will increase once international students, new migrants and ex-pats begin again.