Sydney Suburbs With The Steepest Recent Rental Rises

Tenants are being hammered with rent hikes of over $150 a week in parts of Sydney as recent tax reforms, tight vacancies and higher interest rates heap pressure on landlords.

Explosive new figures from PropTrack showed rents have increased across most of the market, with notable rises in suburbs were prices were once among the more affordable in Sydney.

These rises often added more than 10 per cent to tenants’ weekly rent bills over just three months, with experts explaining fewer new rentals were coming to market at a time of rising tenant demand.

MORE: Jackie O’s cunning $30m exit plan amid Kyle payout

TENANTS HAMMERED BY RENT RISE

Median weekly house rents in western suburbs Mays Hill and Ermington were up by about $100 a week over the May quarter.

Rises were similar in North Ryde, East Ryde, Redfern and North Strathfield.

Increases in house rents were even higher at over $150 per week in up-market areas Davidson, East Killara, Mulgoa, Birchgrove and Abbotsford.

The highest unit rent rises, ranging from $75-$150 a week, were recorded in Mount Pritchard, Forestville and Millers Point, according to the PropTrack research.

The data, the latest available suburb-by-suburb record, captured total rent rises over March, April and May, with the latter being the first month of activity since federal budget reforms were announced.

MORE: How David Jones signed its own death warrant

The reforms included restrictions on negative gearing tax benefits to new homes and changes to capital gains tax.

Citywide figures that captured an additional month since the budget reforms showed Sydney house rents climbed 6.3 per cent over the June quarter, or about $50 a week, to hit a record $850 per week.

Unit rents went up an average of 4 per cent, or $30 a week, over the same period.

CONDITIONS HARDER FOR RENTERS

REA Group analyst Luc Redman said the full impact of the budget changes were yet to be seen, noting that rental supply could contract in the coming months.

“(An) expected decrease in investor demand due to the budget’s tax changes could slow the pace of new supply, putting further pressure on rents,” he said.

Ray White chief economist Nerida Conisbee said tenants could be pressured to pay more as fewer investors bought established homes.

MORE: ‘Support’ for Albo’s home price crash slammed as ‘ridiculous’

“The real inequity is that a policy aimed at improving affordability for buyers can make conditions harder for renters,” she said, adding that many households would hit a financial wall.

“For some renters, that means changing location,” she said. “For others, particularly younger people and lower-income households, it means delaying independent living altogether.”

Ms Conisbee said the tax reforms were exacerbating rental supply issues that predated the budget.

“In markets like Sydney, where demand is strong and established suburbs have limited capacity for new development, reducing investor participation risks making rental conditions worse,” she said.

SYDNEY SUBURBS WITH STEEPEST RENT RISES*

Abbotsford: $150+ per week

Birchgrove: $150+ per week

Davidson: $150+ per week

East Killara: $150+ per week

East Ryde: $150+ per week

Mulgoa: $150+ per week

North Ryde: $150+ per week

North Strathfield: $150+ per week

Forestville: $75-$150 per week

Miller’s Point: $75-$150 per week

Mount Pritchard: $75-$150 per week

Source: PropTrack (March, April and May, with the latter being the first month of activity since federal budget reforms were announced.)

RENT INCREASES ‘NOT SENSIBLY REGULATED’

NSW Tenants Union CEO Leo Patterson Ross said the tax changes weren’t solely responsible for the recent price climbs due to rent increases being “not in any way sensibly regulated”.

Some landlords may be increasing rents simply because they knew other investors were doing it, he said.

“Landlords can increase their rent and so they do,” he said. “Everybody who owned a property before the changes took effect has legacy provisions, they’re not affected by the tax changes.”

MORE: Sad truth behind RBA plans for Aussies

Mr Patterson Ross added that conditions were becoming so tough for tenants that many were putting off medical care or dentistry.

“People are having to make those choices between other essentials needs and paying the rent,” he said.

“When rents are increasing faster than inflation we’re going to keep getting new highs pretty regularly.”

This comes as 47 per cent of Aussie tenants said they struggled to pay their rent in June, according to Finder’s Consumer Sentiment Tracker.

A common fear was that landlords would keep pushing up rents to offset rising mortgage costs, according to the Finder polling.

It was revealed 62 per cent of Aussie tenants were worried interest rate rises will lead to higher rents while almost a third (31 per cent) said their rent had already increased in the past six months.

Finder money expert Richard Whitten said the pressure was especially intense because tenants had few alternatives.

“Low vacancy rates mean renters often feel they have no choice but to accept higher costs or risk being homeless.”

MORE: ‘God help us’: worst auctions in 30 years

The post Sydney suburbs with the steepest recent rental rises appeared first on realestate.com.au.