Rents leap as race to find homes intensifies

Rents for two- and three-bedroom homes in Sydney’s inner suburbs have leapt in recent months, a clear sign the dampening effect of the global financial crisis has ended.

NSW Housing’s rent and sales report reveals rents of two-bedroom homes in inner suburbs including Ashfield, Botany Bay, Lane Cove, Leichhardt, Marrickville, Mosman, North Sydney, Randwick, Sydney city, Waverley and Woollahra rose by an average of 4.8 per cent in the three months to June.

If the increases continued as an annual rate, rents would have jumped 19 per cent by the end of June next year.

The biggest increases in rents for two-bedroom homes, mainly apartments, were $30 or 7.3 per cent a week to $440 in Marrickville, $30 a week or 6.4 per cent to $500 in Ku-ring-gai and $30 a week or 5.8 per cent to $550 in North Sydney.

In middle-ring suburbs, which include Canada Bay, Hunters Hill, Manly, Rockdale and Willoughby, rents for two-bedroom homes increased by an average of 2.6 per cent, while rents for three-bedroom homes were up by 4.2 per cent.

With Sydney’s inflation rate for the June quarter at just 0.4 per cent, some rents have increased by more than 10 times the rate of inflation. Aaron Gadiel, head of the developer lobby group Urban Taskforce, said the figures confirmed the findings last week of a national rental report which found Sydney was the only Australian city where rents had increased substantially.

As Sydney is facing a serious shortage of housing and producing only half the number of new homes the government says is required, Mr Gadiel said further increases were very likely.

”I think that we’ll see rent increases across the board,” he said. ”Forget population growth, we’re not even seeing the housing needed for existing people. There’s an extremely severe housing shortage unique to Sydney.”

Sydney nurse Beth Thomas, 24, knows how difficult and expensive it can be to find a one-bedroom apartment to rent. She finally got one in Newtown, snapping it up by viewing during the week and paying a deposit the same day.

”I hated it,” she said of the search for a place to rent. ”People would get in before you, they would offer more rent and even take deposits to the viewing.

”I’ve gone $100 over my budget and have pretty much the same as I had at my last place. The market moved quickly – already [the flat] next door to mine is up for $50 more than I paid.”

Michelle Galletti, the managing director of a property management company, Just Rent Sydney, said demand was high. ”Things are going quite quickly so it’s really good to be well prepared, have good references, be willing to start paying from when the property’s available and get everything to us as quickly as possible,” she said.

”More serious people are taking time off work to look at properties. Sydney is always quite a good, sturdy market so generally prices are good still.”

Ms Galletti said some prospective renters were even offering more money to secure the properties.

A senior property officer at the Tenants Union of NSW, Chris Martin, said the rental figures only referred to new rentals and tenancies that had started in the year. ”Those amounts are what people are now paying as the median – not everyone’s rents have gone up by $10 in the last three months,” he said.