Tenants save big on rent as rising housing supply forces landlords to cut prices
Sydney tenants have been pocketing hundreds of dollars a week in savings as mounting housing supply forces landlords to discount their rents by nearly 25 per cent in some city pockets.
The savings showed renters have become the surprise winners from rampant investor buying during the property price boom from 2014-2017, which has flooded the market with rental properties.
Recent falls in property prices also encouraged more property seekers to purchase their first home and leave the rental market, cutting tenant competition for properties.
MORE: Suburbs with Sydney’s cheapest homes
Owner set to pocket thousans after shock find
Tenants were getting the biggest benefits in suburbs spread across Sydney’s west and southwest, along with some coastal suburbs in the northern beaches.
Manly Vale had the biggest rental drops, with the typical advertised rent for houses dropping from $1200 per week to $913, or 24 per cent, over the past year, according to an analysis of CoreLogic figures.
Average asking rents also dropped by more than $130 per week in nearby northern beaches enclaves Warriewood, Killarney Heights and Narrabeen.
House rents dropped by up to $210 per week in a cluster of north shore suburbs including Willoughby East, North Willoughby and Naremburn.
Unit rents in southwestern construction hub Oran Park dropped by about $35 per week, while in Parramatta and nearby Oatlands and Prospect the drops were $40-$50, or about 8 per cent.
These drops were well above the annualised trend for the Greater Sydney area, where rents dropped by an average of 3.1 per cent.
Sydney drops were the largest of any capital outside of Darwin. Rents increased in capitals with a slower rate of new housing construction, including Canberra, Hobart, Perth and Brisbane.
CoreLogic analyst Cameron Kusher said Sydney was experiencing “a hangover” from the real estate investment boom, making it a great time to be a tenant.
He suggested tenants review their rents and try renegotiate with their landlords.
“To really take advantage of the market you’d need to be prepared to move home if your landlord or property manager cannot offer a (better deal),” Mr Kusher said.
Amanda Jong and Jye McMurray moved into a new home north of Manly this weekend and noted local landlords were desperate to fill their properties.
Their rental application was accepted straight away, Ms Jong said, adding that she was able to renegotiate the rent on her last home after realising a neighbouring property had been vacant for eight weeks.
“We got a much better deal,” she said. “They were happy to give us a lower price because they would struggle to find another tenant.”
Stone Real Estate-Manly agent Zoe Thackeray heads a team that manages more than 650 properties up and down the northern beaches and said rental demand was varying from property to property.
“One-bedroom units do well and so do high-end properties, but generally two-bedroom properties take longer to tenant, because there are more of them,” she said.
Large-scale residential development in areas such as Dee Why expanded tenants’ choices, but lower demand from expats also helped cool demand, Ms Thackeray said.
“People come from all around the world to live in the area around Manly,” she said. “It’s a lot of our demand.”
ANNUAL RENT DECREASES
Manly Vale -24% (was $1200, now $913)
Willoughby East -16.8% ($1250-$1,040)
Hurstville Grove -16.2% ($740-$620)
North Willoughby -14.6% ($1230-1050)
Liberty Grove -13% ($690-$600)
Prospect -11.1% ($450-$400)
Oran Park -8.4% ($415-$380)
Oatlands -8.1% ($620-$570)