On a personal level, we’ve all witnessed the decline of many things this year—our social lives, our ability to hold an interesting conversation, a basic level of dietary discipline…the casualties have been heavy.
It should come as no surprise, then, that the pandemic has caused similar reductions elsewhere, including Sydney’s rental property market. What may surprise you, though, is which suburbs have seen the sharpest decline in rent prices over this past year.
As a result of the COVID-19 pandemic and subsequent border closures earlier in 2020, Sydney’s rental market became flooded with new listings as temporary visa holders and tourists left the country, properties on short-term rental platforms like Airbnb and Stayz reverted to the long-term residential market, and young renters moved back home to help ease financial burdens imposed by Government restrictions. On top of that, a large chunk of Sydney’s workforce discovered if they could work from home, then home could be anywhere—causing a max exodus of city-dwellers to less densely populated areas.
Although vacancies across Sydney overall decreased for the first time in August after five consecutive months of increases, rent prices continue to plunge in certain areas of the city. According to a recently published Domain Rent Report, these suburbs are among the hardest hit.
With spectacular views of the harbour and such close proximity to The Rocks, Barangaroo, Circular Quay and the CBD, you’d think the affluent enclave of Millers Point would be immune to market melee. Alas, the harbourside suburb tops the list when it comes to sharpest declines in rent, with the weekly unit rent price dropping by 26.9% to a new median of $708. Homes that were converted into short-term holiday lets have now re-emerged in the residential pool, while many renters who chose Miller’s Point for its proximity to their workplace no longer need to live so close to the office as they continue to work remotely.
Nestled between the parklands south of Maroubra and the pacific, Sydney’s beachside suburb of Malabar is another unexpected addition to the list. A popular pick for those who want to remain in reasonable proximity to the city but still feel a seaside breeze, Malabar has seen a sharp decline in rent prices as more people flee to less-populated coastal towns due to workplace flexibility. Here, the median rent on a house is down 20.8% from last year to $950 a week.
The inner-city suburb of Pyrmont has seen dramatic decline in rent prices for both units and houses in the area. The median rent on a home has fallen 16.5% to $710, and 15.1% to $620 for a unit. Overseas migration, decline in overseas student numbers and tourists, and the younger rental demographic moving back home to save money has all played a huge role in the growing disparity between supply and demand here. It’s neighbouring suburb of Haymarket has also seen a similar reduction in unit rental prices, falling 15.2% to $700.
Over the bridge on the Upper North Shore, the leafy and family friendly suburb of Warrawee boasts some of the best schools, including Knox Grammar. But despite its educational accolades, Warrawee has experienced a 15.8% decline in house rental prices, dropping to $1000 for a multi-bedroom home. Unit prices remain mostly unscathed here due to their relative scarcity, making up for only 29% of dwellings in the area.
A ‘bridesmaid’ suburb with great schools, cool eateries and a bustling community vibe, Marrickville’s trendy-twin has had the wind knocked out of its sails over the last nine months or so. After experiencing significant growth, the prices here have declined 14.3% from last year, with a unit now going for an average of $360 per week.
If pigs were ever to grow wings, this would be the year. And with reports of a 13.4% decline in house rental prices in Woollahra, we might want to pay more attention to the sky. One of the Eastern Suburbs’ most esteemed and exclusive neighbourhoods is currently listing weekly rent at $1295 for a multi-bedroom home. In May, 46.3% of properties were advertised with discounted rent here, owing largely to a lack of disposable income coupled with money strapped investors willing to take what they can get.