NSW Rental Report Q2 2013

Single-bedroom units recorded a strong median rent increase in the local government areas surrounding the Sydney Metropolitan Region, with Newcastle and Lake Macquarie featuring in the top ten list for the second consecutive quarter. Within Sydney recently-completed units in several large-scale developments were let, leading to a strong increase in the median rent price. The council areas of Canada Bay (Rhodes, Strathfield), Rockdale (Wolli Creek, Rockdale ) and Blacktown recorded above 10 per cent per annum growth between March 2011 and the corresponding period in 2013. A sharp increase in the number of residential tenancies in Canada Bay, Marrickville and Ku-Ring-Gai highlighted the significant changing building density in middle-ring council areas over the past decade.

Lower growth in median rent was recorded for a two-bedroom apartments and townhouses compared with one-bedroom units, with council areas in the Lower Hunter region populating the second and third entries on the list. While the region continued to experience strong economic activity, recent evidence points to softer conditions led by a contraction in the coal industry. In The Hills Shire medium density units in the suburbs bordering the Parramatta LGA and in the Baulkham Hills and Castle Hill town centres attracted higher rent prices older units, leading to a rise in median price. Small increases (and declines) in the number of new bonds signalled an overall stable take-up of stock, with the exception of the Botany Bay and Marrickville council areas. Interestingly, The Hills Shires 817 rental bonds lodged in the year to March 2013 represented a lower level of rental activity when compared with 953 bonds ten years earlier.

The highest increases in median rent price for a three-bedroom house were recorded in council areas outside the Sydney Metropolitan Area, led by Wyong (Central Coast) and Port Stephens (Hunter). Family homes in the Sydney Metropolitan Area were unaffordable for many, leading to a move to council areas north and south of the city. As with the apartment market, tenants moving into recently-completed dwellings paid higher rent prices than those paid for older dwellings. In the Wyong council area the increase in rent prices concentrated in the 2259 and 2263 postcodes. In Port Stephens, growth stemmed from higher rent prices in the 2315 (Nelson Bay area) and 2318 (Medowie area) postcodes.

The highest rent price for a 2-bedroom unit was recorded in the Sydney council area, with a median rent of $685 per week. Despite the high rent prices demand for rental accommodation in the top five LGAs led to an increase in price over the 12 months to March 2013. The top five most affordable median unit prices were found in Western Sydney council areas. Rent prices continued to rise in the year to March, although the median rent in the Penrith and Fairfield LGAs remained unchanged over the period after recording strong growth in the past three years.

The Randwick council area recorded the highest rent price for a 3-bedroom house, with a median weekly rent of $825. A strong increase in rent price was noted in Northern Beaches council areas, with the Warringah and Pittwater LGAs recording an increase in the median rent equating to nine and ten per cent respectively over the 12 months to March 2013. The lowest median rent for a house was found in Campbelltown, closing the March quarter at $370 per week. The median price at the affordable end recorded only moderate growth from March 2012, as supply of 3-bedroom houses met demand.