Sydney rents soar $80 in May as supply fails to keep pace

Not just home prices, renting in Sydney is also becoming prohibitively expensive, with the median rental price soared $80 a month in May in the Harbour City.

The spike came as new supply fails to match demand from workers moving to the city, according to listings website Rent.com.au, The Australian reported.

Even Domain data suggests that Canberra, Melbourne and Sydney recorded the highest annual growth rates with May quarter median weekly asking house rents increasing by 6.4 per cent, 5 per cent and 4.8 per cent respectively over the same period last year.

Domain Group Chief Economist Dr Andrew Wilson wrote that annual rent increases were now surging ahead of incomes growth.

Sydney’s median rent was $570 a week in May, according to rent.com.au, with supply not keeping pace with the influx of people.

NSW Premier Gladys Berejiklian had said earlier this year that housing affordability was a major focus of her government.

The surge in renting costs comes in spite of the new supply of both inner city apartments and outer suburban house and land projects.

Rent.com.au chief executive Greg Bader was quoted by The Australian that strong domestic and international migration to the city were putting pressure on rents, despite the new supply.

“It’s great there’s stock coming on. The rate of stock coming on is just not meeting demand,” he said.

Also, the fact that with most young workers were keen to live closer to their CBD workplaces to cut commute time and enjoy the city lifestyle, and not benefiting from extra supply in the outer suburbs, was pushing up rents. 

“The areas that are more attractive to people still have supply issues … People moving to Sydney for work, they want to live near work and live a great lifestyle,” he said.

“There is stock coming on and that will help alleviate pressure but the stock needs to be in the places where everyone wants to be.”

The median house rent in Sydney rose 1.6 per cent to $620 a week in May, according to Rent.com.au, while the median apartment rent added 1.9 per cent to $550 a week.

The median price per room rose 2.9 per cent to $288 a week.

“Actions by policymakers and banks to restrict activity by residential investors will only add to the current imbalances between rental supply and demand with even higher rents the logical outcome,” wrote Dr Wilson in his latest column.