Rents have hit record highs in many of Australia’s largest cities, but there are still pockets where properties are being rented for less than they cost five years ago.
In Sydney, Melbourne and Perth, properties are rented at least 20% less than in 2016, according to the latest figures from the estate, with more than 100 other suburbs in the capitals registering rent cuts in the five years up. in September. .
The biggest falls were seen in Melbourne, which became the cheapest capital to rent a house during the pandemic and the second cheapest urban market for unit renters.
Downtown Southbank has seen the largest drop in the past five years, with median asking weekly rent now of $ 400, about 26% below 2016 levels. Much of the drop has been observed in the past year only.
Apartment rents in Melbourne’s CBD, downtown Docklands, Caulfield East in the interior south and MacLeod in the northeast have also fallen by more than 20%. Rents in nearly one in five of the city’s suburbs are lower than in 2016, although rents in most of those suburbs fell by less than 5%.
Head of Research and Economics Nicola Powell said the downtown rental market, popular with international students and new migrants, had been hit hard by the closure of international borders, leaving l unit supply exceeding demand.
Home rents also fell in 10 suburbs, with East Melbourne recording the biggest drop – down 11.1% to $ 845. It was followed by South Melbourne (down 8.3%), Botanic Ridge (down 6%), Canterbury (down 5.9%) and South Yarra (3.6%).
Felicity Edwards, head of rentals at Marshall White Stonnington, said demand for homes generally followed well as tenants looked to increase their size, with multiple demands for quality properties. However, older homes in need of an upgrade have proven more difficult to rent, as have apartments.
A flood of units on the market had seen rents drop, in some cases until they would have been several years ago, she said. Renters were still looking to negotiate lower asking rents, she added, some down to $ 80 per week, although most only got a reduction of $ 10 to $ 20 per week.
In Greater Sydney, unit rents were below 2016 levels in two-thirds of the suburbs, with the biggest drop in Revesby in the southwest, with rents down 25% to $ 450.
Melanie Poole, head of property management at First National Real Estate Daystar, said the Revesby unit rental market had slowed down a bit during the pandemic, with more tenants looking to move to larger properties as lockdown and remote work meant they were spending more time at home.
Although the supply of units in the suburb has changed little in recent years, new developments in the southwest region, particularly around Bankstown and Liverpool, have left tenants with more choices, she said. declared.
Other suburbs, including Millers Point in the downtown area, Mortlake in the central west, Harris Park in the west and North Ryde in the northwest, have also experienced falls of at least 20%. Although the city’s median weekly rent rose 3.2% in the September quarter to $ 485, it was still $ 65 below the mid-2018 record.
While Melbourne’s rental market had been hit hardest by the pandemic, Sydney had faced lower unit rents for longer, Dr Powell said. Apartment rents had fallen every year since the market downturn in 2018 – with higher levels of development and investment activity in previous boom years driving rents down – while unit rents in Melbourne fell every year since mid-2020.
Falling unit rents could also put downward pressure on housing rents – especially in inner cities and high density areas – as tenants sought more affordable housing, Dr Powell said.
House rents have fallen in nearly a quarter of Sydney’s suburbs. However, the median rent for houses in the city has reached an all-time high of $ 580 per week, mainly due to rents reaching new highs in peripheral and intermediate regions and places of living.
The biggest drop was in downtown Ultimo, generally popular with local and international students, where rents fell 17.4% to $ 655 per week.
It was among seven suburbs, including Kensington on the east, Artarmon on the north shore, and Lakemba on the west, where house rents had fallen by at least 10%. Elsewhere, rents have fallen significantly by 5% or less.
Brisbane had far fewer suburbs where rents were down from 2016 levels.
Fortitude Valley and South Brisbane – among eight suburbs with cheaper house rents – both saw declines of more than 16%. The largest decline in unit rents was recorded in Brisbane’s business district, where the median was down 13% from 2016 levels, although it was stable year-over-year.
Rents in Brisbane had stagnated for many years, but had risen throughout the pandemic, Dr Powell said. The stability of unit rents in the CBD over the past 12 months has also been a good result after several years of downward pressure on rents due to high levels of development.
On the west coast, North Coogee was one of eight suburbs in Greater Perth where house rents fell over the five-year period. The median home rent has fallen by about 23% – or $ 175 – to $ 575 per week. It was followed by Northbridge, with a drop of 6.4%, and Kalamunda, with a drop of 5.7%.
Asking rents fell in only six suburbs, with the largest drop in North Freemantle, where rents fell 8.3%.
In Darwin, where asking rents reached their highest level in six years, house rents in the Bayview suburb were still down 12% from 2016 levels, and rents in Rosebery and Zuccoli were down. about 3%. Stuart Park saw the largest decline in units, dropping 6.5 percent.
In the nation’s capital, which remains the most expensive city for renters, there was not a single suburb where rents were below 2016 levels. Rents have also increased in all of Hobart and Adelaide suburbs. , but only around 1% for the CBD units in Adelaide and the houses in Glenside, in the east of the city.