Last week we explored the Sydney suburbs where median rent prices had declined since the beginning of the COVID-19 pandemic.
A quick wrap for those of us struggling to remember what day it is, let alone an email from a whole week ago: due to a decrease in tourism and international student visas, inner city suburbs like Pyrmont and Haymarket have taken a substantial hit, whilst affluent areas like Millers Point and Woollahra have seen a significant decline as short-term accommodations flood the long-term rental market and supply outweighs demand. Oh, and today is Thursday. Again.
But as city rents fall, some suburban rents are on the rise. To pose the most common question of 2020; why?
It seems there are a couple factors at play. First, as more and more people opt to work from home, renters are looking to move out of the city as proximity to their workplace matters less and less. Secondly, though rent has declined in some affluent areas, many renters who have lost income due to the pandemic still find themselves priced out of the city. As these renters flee to the suburbs in search of cheaper rent, they inadvertently push up rents in the very suburbs they seek to save in. Finally, the median rent price growth in some suburbs is likely the result of luxury fully-furnished houses re-emerging onto the long-term rental market instead of being offered on short-term leases.
Now that we’ve covered the why, let’s take a look at the where.
Topping the list is the exclusive coastal enclave of Dover Heights. Boasting (by far) the highest increase in Sydney, the median house rent price is up a whopping 29.6% to $1750 a week, according to Domain’s latest report. Here, demand substantially outweighs supply, as more families look to move to the elite eastern suburb, and affluent owners are forced to scrap their usual travel plans and stay put in their properties.
Over the bridge and up the coast on the Northern Beaches, the seaside suburb of Narrabeen has seen similarly staggering numbers in relation to rising house rent prices. Currently, the median rent price per week is $950, up 26.7% from last year. Work flexibility has caused a surge in rental interest on the northern beaches, as more people flee the city for a sea change.
Another suburb on the northern beaches that has experienced similar growth is the chic and popular Palm Beach, home of boutique fashion labels, trendy eateries, and Australia’s beloved yet fictious Summer Bay. Here, median rent prices have increased by 22.9% from last year, largely owing to luxury short-term rentals entering the long-term market as well as an influx of city-dwellers keen to make a lifestyle change. Meanwhile, other northern beaches suburbs like Balgowlah Heights and Warriewood have also witnessed rising rents, with an increase of 17.8% to $1738 and 16.5% to $990 respectively.
From sea changes to tree changes, this rugged region west of Sydney has seen a significant (albeit much more modest) increase in rent. Rental vacancies in the Blue Mountains hit a ten-year low in August, with just 0.7% of properties available. Overall, three-bedroom house rents in the area have increased by around 3.3% from $433 in January to $447 in May, while two-bedroom units rose 2% from $284 to $355 over the same time period. In suburbs like Katoomba and Glenbrook, relators have seen a huge surge in the number of potential renters turning up to inspections.
It’s well-known that residents of the Sutherland Shire possess a keen disinterest in ever leaving their place of birth, and it seems the rest of Sydney is starting to understand why. The only beach in the entire city accessible by train, Cronulla offers an idyllic suburban lifestyle with ocean views. As with suburbs in the Blue Mountains, Cronulla has seen a relatively modest increase of approximately 2%, with rent on a house going for $850 and $475 for a unit. A similar increase of around 2% can be seen in other Shire suburbs like Menai and Sutherland, in high demand because of their affordability and proximity to national parks.