Sydney records steepest annual rent growth in ongoing housing crisis

By CHRISTINE LAI

Australians have been hit by a record surge in rent prices, with many renters facing the possibility of needing to vacate their property or risk being rendered homeless while competition for overpriced properties remains at a high.

Sydney rent prices have recorded their steepest annual growth, with the rent for houses jumping up by 12.1% and units increasing by 18.6% respectively. According to a report by Domain for the December quarter of 2022, rent prices that increased by a median of 20% or more included suburbs like: The Rocks, Kellyville, Point Piper and Mascot.

Chief executive at the Tenants’ Union of New South Wales Leo Patterson Ross condemned the rental crisis and called for price ceilings as a form of rental control to ease the pressure off renters during this time.

“Even if it’s only short term, stepping in and addressing the price, at least as a short-term response, would make the most difference.

“Rent caps, both during a tenancy but also between tenancies, is definitely something that we should be talking about as serious policy proposal”, Ross said.

According to The Guardian, Ross and the Tenants’ Union are proposing a rent cap that is pegged to the Cost Price Index (CPI), which would still see an increase of rent, but would not be “beyond the reasonable means of renters”.

Woman dealt with rent hike of $700 per fortnight

One Sydneysider living in a rental property in Redfern was shocked when she was hit by a $700-per-fortnight rent increase.
Chantelle Schmidt, received a note informing her that the rent for her Redfern share house would increase from $1900 to $2600 a fortnight.

Following the email, Schmidt attempted to negotiate a lower amount with the real estate. However, during correspondence, the owner explained that their decision was due to a desire to “bring rent in line with what the current market is achieving” and that if she were to move out, they would easily find tenants willing to pay that amount.

Schmit is a journalist and podcast host who shared a video to her TikTok account, describing the increased rent while asking her followers what they thought of the situation.

“Do you think it’s worth it?” she asked.

In the video, the Sydney writer listed off a series of concerns she had with her rental property over maintenance repair issues, including water damage throughout her house and walls, mould and a loose floorboard.

She spoke on the Today Show on Wednesday stating that “everyone” had been telling her to move out but “you can’t”.

Rental supply is at an all-time low, with Senior Economist Eleanor Creagh, describing the rental situation as dire.

“Demand for rental stock remains heightened and supply continues to be limited. Total rental listings remain at their lowest level since mid-2003”, she said.

Currently there are only 31,000 residential rental properties available across the entire country. While competition for rental properites has increased, a report by SQM Research has found that capital city asking rents have continnued to rise, with a 24.7 per cent increase over the past 12 months, and a 17.4 per cent rise in regional areas.

Skyrocketing rent proving to make Sydney un-livable

In Sydney, unit rents reached a new high at $575 per week and the city has since become the most expensive to rent a unit since September 2020.

The under supply of rental properties has made it difficult for renters to break into the housing market. Currently, the national vacancy rate is back at its lowest point on record in January at 0.8 per cent.

REINSW CEO Tim McKibbin described the nine-year low in Sydney vacancies as “proof that the rental crisis” was showing no signs of “abating”.

“Demand for rental accommodation across Sydney is at an all-time high and many REINSW members simply have no available properties on their rent rolls, while those that do are reporting that properties are being snapped up immediately”, he told Australian Property Investor (API) magazine.

All stakeholders agree that increased investment in the sector is the only solution, but the current strategy is to constantly erode the rights of landlords – something has to change”, he said.