Sydney’s median house and apartment rents remained flat, but the increased supply of rental stock became the highlight of the market over the previous quarter.
The median house and apartment rents in the city were steady at $540 a week and $530 a week, respectively, according to the Domain Rental Report.
Sydney was the second most expensive capital in terms of renting a house after Canberra took the top spot last quarter. New South Wales capital was the only city to record annual value drops for both houses and units, with rent down $10 a week (1.8%) for houses and $20 a week (3.6%) for units.
The abundance of stock in the market, though, stood out in the report. The number of units on the market across Sydney was up more than 20%, while houses were up nearly 13% year-over-year.
“Current rental conditions provide tenants with a window of opportunity to negotiate rents and terms,” said Nicola Powell, Domain senior research analyst.
As a result, landlords are forced to cut rents to attract tenants in a more competitive market.
In addition, it became difficult to find a renter in less than a week, according to Rachel Beadman, head of property management at Phillips Pantzer Donnelley.
“It’s competitive and days on market are getting longer. A year ago you wouldn’t have had people putting an offer in under the market asking price. Traditionally, [prices] were driven up … whereas now it’s going the other way. If a property is on the market for $1,000 a week, [tenants] are probably trying for around $900. Rents for high-end, family houses had come down more significantly, dropping hundreds of dollars,” Beadman said.
The time needed to find a tenant on the lower north shore, for instance, rose about 20%, and landlords who did not adjust to the market had to experience a longer wait.
“As much as we want to advertise the rent at the current level [when re-letting], it’s going to sit on the market for weeks if we do that,” The Agency’s Lauren Beare said.
The south-west and south areas appeared to have the most significant quarterly falls in apartment prices— down 2.7% and 2%, respectively. The south-west also logged the most significant annual decrease of 5.3%. The north-west and upper north shore came next, while the northern beaches bucked the trend with rents up 1.6% over the year.