Sydney rent prices: coming down … or just a downer?

The rental landscape in Sydney is changing. Photo: Ray White/Facebook.

Few seismic shifts could compare to the idea of Sydney rents going down – but that’s what’s happening, at least in some parts of the city. Richie Black talks to the people in the thick of a changing rental landscape.

Claire from Wollstonecraft is preparing to move out of the parental home and in with her boyfriend. Okay, living in sin, she acknowledges – but, hey, she seems fine with that. Particularly since rental prices – at least in her area – seem to be going down.

“My impression is that in certain areas like the North Shore, there’s been a great deal of over-development,” she says. “Covid seems to have driven away the tenants that would have occupied those places so now the prices are actually affordable for once!”

“For once” being the operative words. We’re so used to the rent going up that the inverse seems like a major shift.

The latest Domain rental report says that, in the December quarter, unit rents had the steepest quarterly and annual fall since their rental records began in 2004, dropping $25 over the December quarter to an average $470 a week. Unit rents in the city and east and inner west are at an eight-year low – although you’ll note house rents gained $10 over the December quarter to $550 a week.

“Yes, I’m feeling quite optimistic,” Claire says, “I do feel like these conditions probably won’t last forever so I do feel there is still a bit of urgency to capitalise on this while things are cheaper.”

As with every other tenant we interviewed, Claire requested anonymity for the sake of her rental reputation – so thought it a good idea to hide behind a bottle of beer. Photo: supplied.

So thank you, Covid?

Alex (we only use first names here, as you will observe, in order to protect the subject’s anonymity and rental record) is 33 and looking for an apartment for hire in Sydney. His circumstances are that he reached a mutual understanding with his two previous flatmates – to throw himself out.

His impression is that the current situation “has definitely granted the renter greater licence and bargaining power, at least in the short term”.

Yes, he does not have an extensive rental history – but he’s a nice guy, regularly deloused, upstanding (or at least upright standing) most of the time.

He’s feeling pretty good about his chances – but there’s still a little wariness. Prices are going down but the potential for disappointment – or compromise – definitely still lingers.

I catch him just as he’s checked out a flat in Chippendale that promised great things via Domain.com.au – but was distinguished, on inspection, by a depressing outlook into a dark, enclosed central courtyard area.

“I’m very confident, yes, at finding [innumerable] listings for places that look potentially decent but end up featuring an internal-facing pile of rocks or an inaccessible courtyard that may have once hosted gladiatorial combat,” he says with a sigh.

He’s notionally looking in the Inner West for his digs – but also mentions that Mittagong looks appealing and wonders out loud if Domain advertises commune accommodation (he’s probably joking, but it’s hard to tell).

Regardless, the renters’ cynicism obviously remains.

Alex pictured in the garden he’s currently living in. Photo: supplied.

An estate agent’s take

Kris Boghossian, at Ray White Erskineville, provides consolation for vagabonds like Alex, saying: “Because people are upsizing and looking for more space, the one-bedroom apartments have definitely come back in price.”

He attributes this largely to of a surplus of demand – with Covid at the nub of the matter. For example, the lack of domestic and international visitors has forced owners previously dependent on Airbnb to put their properties up for rent.

“That was a huge impact, in terms of supply and demand. And the other thing is, if you’re a couple – and you’re working from home – living in a one-bedroom is very difficult. The noise, that kind of thing, is very difficult for two people working from home. Which is why everyone has upgraded to two bedrooms.”

However, as always, it’s a case of a case-by-case basis.

“Good properties, things that present really well in the Inner West, they’re still desirable. I had a house in Erskineville – a two bedroom, one bathroom – with 25 groups come through in the middle of a storm.”

He also notes that most of the rent decreases are occurring in suburbs closer to the city, such as Redfern and Chippendale.

So while it’s good to be aware of potential savings to be made – it is nevertheless not a good idea to count on them.

What the Tenants’ Union says

“Across Sydney the picture in terms of rents is actually quite varied,” says Jemima Mowbray, Policy and Advocacy Coordinator for the Tenants’ Union of NSW.

“In some areas, such as the Eastern Suburbs and inner city, rents are going down – especially for apartments. But the picture can look quite different across NSW – in the middle and outer rings of Sydney, as well as generally in regional areas of NSW.”

Rent in Sydney’s outer suburbs is still more affordable – but that’s not to say, of course, it is inexpensive. And, unfortunately, it’s not likely to get cheaper, either.

Korey, who lives with his partner in Warrimoo in the Blue Mountains, is currently paying $450 per week for a three-bedroom house. He’s noticed there’s been an increased demand in the area in the wake of Covid, based on the fact, he reckons, “People are moving away from the city because of perceived risk.”

But then the prices have been steadily rising in his area for a while.

“When we first moved to the Blue Mountains about nine years ago, we paid $250 for a two-bedroom house. It’s nearly doubled that amount.

“As people are moving away from Sydney – it’s going to put pressure on the housing market, in the outer areas like the Blue Mountains.”

It’s something, he notes, that particularly concerns him as a person with a disability, which he says puts him, “in more of a precarious situation than someone who is able-bodied”.

So, some things haven’t really changed – one being the inherent vulnerability of the renter’s lot. Which seems slightly odd to us, given that accommodation should seem like some kind of basic human right – but what would we know?

“Currently there are no additional protections against rent increases – and no protections were introduced during Covid,” says Jemima Mowbray.

“Renters outside of a fixed term tenancy can only be given a rent increase once a year, and a renter can challenge a rent increase if they believe it is excessive. If discussion to withdraw an increase with your landlords is unsuccessful, and you’d like to formally challenge the increase you need to apply to the Tribunal within 30 days.”

Renting in Sydney is bad – but, hey, look on the bright side: it has been worse. Photo: Sam Hood/State Library of New South Wales (Mitchell Library).

“It can be tricky to challenge an excessive rent increase at Tribunal, so make sure you have evidence about market conditions and any other factors ready to go when you make your application.”

They aren’t obliged to give you a decrease either. Nevertheless, it’s a good idea to have some idea of rent in your area – and you can actually check using the Tenants’ Union ‘Rent Tracker’ tool on tenants.org.au. Several people we spoke to have been able to make successful inroads to the cost of their weekly rent that are commensurate with rates in their area.

Ask and ye shall receive

Jill from Stanmore has managed to get her rent reduced by $40 – which will be enough for her to afford to live by herself, after years of cohabiting with randoms, boyfriends and other undesirables.

Jill is cannily supplementing her income to pay her rent. Photo: supplied.

She said it was a case of approaching her estate agent with a little leverage – in this case, the asking rate for another flat she claimed she was sorta/kinda thinking of moving to. With her value as a reliable, long-term tenant, the agent was swift and obliging when it came to her rent reduction.  

Similarly, Anara from Erskineville found her agent surprisingly amenable.  

“I wasn’t super confident but what I realised with the real estate is you have to ask,” she said. “The situation in Sydney has been really crazy for the last few years – but it’s changed a bit and it’s good for us.”

In her thirties and living with her partner, her rental situation depended on a degree of serendipity – one she has cheerfully taken advantage of.

“Originally we were living on the second floor of this building and we were paying $520 [per week],” she explains. “When this whole Covid thing started, coincidentally, the landlord asked us to move out … There happened to be this other apartment in the same building for $500 – the one we’re in now. But when we applied we actually asked for $480 – and they agreed.

“And we signed the lease for six months. After six months, I asked again for a lower price [by] another 50 dollars. I said, we’ve been looking around – there were plenty of apartments now at a lower price, so could we have a price reduction. Yep.”

Anara pictured in her apartment (she is the one behind the taco pillow). Photo: supplied.

Negotiation seems to be in the air. And the moral of this particular story is that those who dare to ask, (might) win. Understandably, your typical real estate agents aren’t simply going to offer these discounts.

As a new tenant, Claire also says that she will be prepared to negotiate on price when it comes to an application.

Alex, meanwhile, believes that while real estate agents aren’t exactly obsequious, they aren’t behaving as obnoxiously as their reputations have suggested in the past.

“If anything,” says Alex, “the majority I’ve met had an air of resignation, as if an application were the rarest thing. Price gouging seems, temporarily, a thing of the recent past. It’s a far cry from a few years ago and I’m glad that a bit of balance has been restored to what is otherwise a heavily transactional relationship.”

To be fair – joking aside – all the agents we spoke to were generous with their time, and gracious and frank about the decrease in rents, where applicable. One even told us, off the record, that she was happy that life was finally becoming easier for the humble renter.

It does speak to a changing dynamic, one where a high quality tenant has a little more heft.

Kris Boghossian, at Ray White Erskineville, says that the bad old days – where prospective renters could expect the demoralising experience of seeing a hundred other applicants competing for the same property – aren’t returning anytime soon.

“I don’t think we’ll see that kind of urgency again for a while. Again, people have become a little more flexible where they’re going to live – so they don’t mind moving a little bit further. People are happy to have a trade-off of a bit more space but being further away from the CBD.”

With the landscape having changed a little it’s a good idea to check out how much you should be paying. And for more information about your rights when it comes to addressing rent issues, you can check out the Tenants’ Union Covid Renting Guide.