Sydney house rents jumped $20 over the quarter to hit a new record high of $600 a week according to Domain's latest Rental Report.
This is the steepest annual increase in house rents since 2009, at 9.1 per cent or $50.
Domain reports that Sydney unit rents have increased by $5 over the quarter to $490 a week.
This is the first time in almost four years that Sydney unit rents have posted positive annual growth, at 4.3 per cent or $20.
However, they remain $60 lower than the mid-2018 record high.
Although rents are rising the pace of quarterly growth has eased for both houses and units.
A sharp turnaround in Sydney’s rental market saw asking rents jump over the second half of 2021, closing the year with the steepest annual increase since 2009 for houses and the first annual increase in almost four years for units.
Domain report that it has been a race for additional space for tenants as working from home and lockdowns have placed greater importance on the configuration and size of our homes.
This has been evident as high demand for houses meant rents rose more than double the rate of units over the past year.
A scenario that’s also likely to have pushed up Sydney rentals is greater household formation, as renters opt-out of house shares and seek smaller inner-city apartments while they remain more affordable, helping to support a recovery in unit rents.
At the same time, high house rentals have led many tenants to compromise and move to more affordable apartments.
Weaker investment activity interrupted the flow of rental properties over the last few years.
However, investors are back in the market with the share of home loan values for investment reaching the highest since 2019.
This will boost supply and is likely to have helped to slow rental price growth over the December quarter.
No doubt competition to secure a rental will escalate once borders reopen and international students, new migrants, and ex-pats look for accommodation.
This will then be further strained by demand from COVID escapees as they return from sea and tree change areas to the Sydney suburbs.
Source: Domain Rental Report