Competition for Sydney rental properties has exploded as new migrants flood back into the country, with the number of renters looking for new housing dwarfing the supply of available homes.
PropTrack’s latest Rental Report showed the supply of available rentals plummeted by 26 per cent over the past year and there are now close to 15 renters, on average, for every individual rental listing.
It was also estimated that the overall tenant pool in Sydney swelled by nearly a quarter over 2022.
The short supply of rentals and heavy tenant demand put incredible pressure on rental prices, with rents on properties increasing by more than $200 per week in some instances.
There have also been reports of close to 80 groups of renters arriving at some inspections and more than 20 tenant applications submitted for one property.
MORE: ‘Suck s***’: House mate’s ‘greedy act’ angers
Aussies lying to get money for homes
Median advertised rent in Sydney increased 7.8 per cent over the year, but this figure disguised the huge variability in rental increases across city regions: some had substantially larger rental increases.
House rents increased by more than 20 per cent in a range of middle-ring suburbs, according to PropTrack.
They included Turramurra and Wahroonga, on the north shore, North Strathfield, in the inner west, and Kensington and Matraville in the southeast.
Apartment rents rose by more than 15 per cent within inner suburbs Haymarket, Ultimo and Millers Point.
Suburbs with similar high growth even included those previously oversupplied with new apartments, such as Zetland.
PropTrack director of economic research Cameron Kusher said the rental market would get tighter across the country as the year wore on.
“We expect the market to remain extremely challenging for renters,” he said, adding that Sydney and Melbourne would be the most stretched.
“Most of the overseas migration that will occur over the coming years will be in these two cities, which will increase demand for rental accommodation,” Mr Kusher said.
“Addressing the demand and supply dynamic will take some time which means that supply is likely to remain tight and the cost of renting will increase.”
Business owner Gabriella Lizzo was recently on the hunt for a rental in the eastern suburbs and said the search was excruciating.
“It was very stressful,” she said. “There would be at least 50 people at the inspections. Each time it got into a bidding war.”
She said they were frequently overlooked when applying, despite her and her partner having “good” incomes. “There’s just too much demand and not enough supply,” she said.
SQM Research director Louis Christopher said the next month could be particularly hard for home seekers because of the surge in overseas students wanting rentals.
PropTrack’s Rental Report revealed one of the reasons for the drop in rental supply was fewer new landlords.
New lending to property investors over November hit the lowest level in almost two years. Lending to investors had also consistently been below the long-term trend since 2017.
Adrian William, the director of real estate agency Adrian William, said open for inspections have been packed this year.
One rental on Illawarra Rd in Marrickville attracted 78 groups of keen renters at the first inspection. Twenty of the groups applied.
Rental inspections on a Monday night in Newtown and Petersham saw a respective 60 and 55 groups attend.
Another rental in Haymarket is being advertised for $920 per week – more than double the $450 per week rent for the two-bedroom unit in 2020. A rental in the same building is listed at $950 per week, $225 more than the 2021 rent.
Property Manager Guillaume Fumat said the rent for many of his listings was increased by $30 per week in an effort to thin the crowds of people attending inspections. “We’re still getting huge crowds even after the rent goes up,” he said. “It’s been a totally crazy January.”
MORE: Latrell Mitchell’s new record-breaking home
Red Hot Chili Peppers’ secret Aussie home for sale
NRL star Nate Myles and Tessa James sell Gold Coast retreat