Sydney rents reach record highs as units jump $130 per week over a year

She said the rental market was tight because of strong demand from locals priced out of buying, an increase in single-person households, surging migration and an inelastic and ongoing shortfall of rental properties.

Impact Economics and Policy lead economist Dr Angela Jackson said a fundamental lack of available rental properties was the cause of record rents in Sydney.

“Overall it’s driven by low vacancy rates. “What that means is there aren’t enough properties and there’s too much competition and that’s driving higher rents across the board,” Jackson said.

She said the city will be unable to house critical workers.

“For those on low incomes, and probably even middle incomes, [it will mean] increasing levels of financial stress and not being able to afford other things, including health, food and education,” Jackson said.

Other experts have warned the rental crisis will lead to increasing inequality and homelessness.

“It’s causing widespread financial stress at the moment and economic hardship and undermining economic growth,” Jackson said.

Justin Wilkes and his partner applied for multiple rental properties on the northern beaches, where unit rents jumped 3.6 per cent in the past quarter to $725, but never heard back. It was only when the 35-year-old sole trader in horticulture offered more than the asking rent for an average two-bedroom unit in Dee Why that he was able to secure a place.

“We had no idea that it was going to be so hard to find a place, absolutely no idea. We offered $40 more a week … once we offered more, we got the call back,” Wilkes said.

His experience came as a plan to end secret rent bidding was ditched after a range of criticism from different experts that the law would not stamp out the practice.

He said there were easily 30 people or more inspecting each rental apartment with most rented out after the first viewing.

“We’re doing okay, it’s just the fact of how tough it is to rent, it’s just like a blank check, whoever’s got the biggest offer gets it.

“We are worried about where we will move after this. We think about whether we need to leave Sydney, but we love it in Sydney.

Loading

“We moved from Freshy [Freshwater] to Dee Why because the rents started to get up to $800 [a week] for a two-bedroom unit.”

Wilkes said he would love to own a home one day but does not see how that is possible.

“If rents keep hitting records, how are people supposed to save for a deposit?”

AMP chief economist Dr Shane Oliver said as rents became more expensive, tenants were likely to look for more housemates to share costs or move home to save money. This would take some pressure off the market as more rentals become available.

“It’s like they say, the solution to high prices is high prices,” Oliver said. “Once rents go up, people will look at ways they can spend less on it.”

“If you’re a young person and your rent goes up by 20 per cent, that’s an extra $100 or more you’ve got to find per week, so you’re going to look for ways to cover that cost.”