Sydney rental prices are rising at their fastest annual rate in four years, new property research has revealed.
According to Domain’s Rental Market Report, the harbour city’s median rental cost increased by 1% over the September quarter to a new record high of $530 per week, up 3.9% year-on-year. Rents for units also increased sharply, jumping 2% over the quarter to a new peak of $510 per week, up 3% year-on-year.
Domain’s senior economist, Dr Andrew Wilson, says Sydney has now overtaken Darwin with the highest capital city unit rents, despite increased supply, which is a concerning trend for some market segments.
“Sydney is the standout capital this quarter with rental prices continuing to rise, despite an increased supply of properties available. Low levels of first home buyers are offsetting investor activity and the record levels of new buildings is having no effect, with demand remaining higher than supply,” he said.
“The increased rental rates in Sydney – it’s now the most expensive capital in Australia for unit rental – is a concerning trend for first home buyers. Notwithstanding the deposits required for purchasing property, increased rents means there are more outgoing expenses for first home buyers and therefore more time and saving needed to meet the requirements.”
However, the report also reveals that Sydney has the lowest rental yields for investors, despite the rising rental prices.