$25 a week rent increase, thanks to insufficient new apartments

17 August 2010

A lack of new apartment development lies behind sharp rent increases in Sydneys inner and middle ring suburbs, according to the Urban Taskforce.

Housing NSW today released its Rent and Sales Report for the June quarter. The Taskforces chief executive, Aaron Gadiel, said that median rents for two bedroom homes in the inner suburbs have soared by $25 to $540 a week in just three months.


Thats a 4.8 per cent jump if that rate of increase was sustained over a full year it would amount to a 19 per cent annual increase in rents, Mr Gadiel said.


Median weekly rents for three bedroom homes also jumped by $25 to $725 a 3.6 per cent increase, which is equivalent to a 14 per cent annual increase.


These rent increases are running at more than nine times the rate of inflation.


Mr Gadiel said that renters in the middle ring suburbs fare only slightly better, with a $10 increase in the median rents to $390 a week.


Thats a 2.6 per cent jump in a single quarter and if that rate of increase is sustained over a full year, its a 10 per cent increase in annual rents, he said.


Median rents for three bedroom homes in the middle ring suburbs jumped by $20 to $500 a week a 4.2 per cent increase equivalent to an annual increase of more than 16 per cent.


Mr Gadiel said the biggest quarterly increases in rents for two bedroom homes were in:

  • Marrickville – up $30 to $440 a week a 7.3 per cent increase;
  • Ku-ring-gai – up $30 to $500 a week a 6.4 per cent increase;
  • North Sydney up $30 to $550 a week a 5.8 per cent increase;
  • Mosman – up $25 a week to $505 – a 5.2 per cent increase;
  • Rockdale – up $20 a week to $400 a 5.3 per cent increase;
  • Leichhardt – up $20 a week to $570 – a 3.6 per cent increase;
  • City of Sydney up $20 a week to $600 – a 3.4 per cent increase;
  • Botany Bay – up $15 a q week to $395 a 3.9 per cent increase; and
  • Randwick up $15 a week to $495 a 3.1 per cent increase.


Mr Gadiel said that Sydneys grave housing shortage is once again biting renters.


The housing shortage is serious business its not about developers or anti-development activists its about regular home buyers and renters who pay the price when new homes arent built, Mr Gadiel said.


Local, state and federal governments all need to focus on reducing the housing shortage.


“The housing shortfall hits Sydneysiders hardest.


“No Australian capital city approves less new homes per head of population than Sydney.


“In the last financial year, 15,000 apartments and townhouses were approved in Melbourne, compared to 11,000 in Sydney.


“The number of detached houses approved in Sydney (8,000) is just a third of Melbourne’s figure, near to half of Perth’s amount and just under Brisbane’s number.


The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.



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