Downward Tenancy

Sydney Morning Herald

Thursday March 22, 2001

Harvey Grenan

The rental market across the State appears to be shrinking.

HOUSE rents stayed still and in regional areas went backwards during the December quarter, while the number of houses and units being let dropped by almost 5 per cent across NSW, reflecting lower demand for rental accommodation after the Olympics.

New lettings in Sydney dropped 3.1 per cent in the quarter, and the Games notwithstanding fell 2.6 per cent over the whole of 2000.

Notably, the number of new leases dropped 18 per cent in the Botany Bay local government area and 22.2 per cent in Hornsby in 2000, while they rose 16.3 per cent in the City of Sydney and 17.9 per cent in Manly.

The Department of Housing's quarterly Rent Report monitors bonds lodged with the Department of Fair Trading and reflects median rents being charged on new lettings.

It follows the Real Estate Institute of NSW's January property management survey, which showed rental vacancy rates across Sydney at their highest for seven years.

Rents for two-bedroom houses in all metropolitan areas of the State showed zero growth in the December quarter. Three-bedroom house rentals were also static across Sydney and the State but there were local variations, with a 4.9 per cent rise in the inner-ring suburbs of Sydney and5.3 per cent in the middle ring. The outer suburbs were static. Median rents fell an average of 1.4 per cent across metropolitan areas outside Sydney, such as Newcastle and Wollongong.

For the full 12 months to December, house rents rose moderately. Two-bedroom houses were up 6.1 per cent in the inner ring, 4.2 per cent in the middle ring and 2.9 per cent in the outer ring. Other metropolitan areas of the State showed no movement.

Rents for three-bedroom houses performed better, with annual increases of 7.5 per cent in the inner suburbs, 9.1 per cent in the middle suburbs and 7.5 per cent on the fringe of Sydney. Other metropolitan areas rose by only 1.5 per cent.

The fluctuations were more extreme in some municipalities. In Pittwater, rents for three-bedroom houses jumped 13.9 per cent for the year, while rents for four-bedroom dwellings rose strongly in Leichhardt (22.4 per cent), Bankstown (15.4 per cent), Ryde (13.2 per cent), Pittwater (13.9 per cent) and Shellharbour (15.2 per cent). In Woollahra, however, median rents dived 18.2 per cent, and across the harbour in Mosman the year closed with a surge of new lettings above $2,000 a week.

Next week: A brighter picture for unit landlords.