15 November 2010
Todays September quarter rent figures, released by the state government, confirm that Sydneys supply crisis is continuing to hit renters, according to the Urban Taskforce. The Taskforces chief executive, Aaron Gadiel, said renters are having to cough up extra cash because local and state governments have throttled new home development.
In Sydney outer suburbs, rents for three bedroom houses increased by 2.9 per cent in the September quarter two-and-half times the quarterly inflation rate.
The median weekly rent for these houses jumped by $10 to $360.
In the 12 months to September, rents for outer suburban three bedroom houses increased by 9.1 per cent.
The biggest quarterly increases were in:
¢ Pittwater where median weekly rents jumped by $35 (to $695);
¢ Wollondilly where rents jumped by $30 (to $330);
¢ Penrith where rents jumped by $15 (to $350);
¢ The Hills where rents jumped by $10 (to $480); and
¢ Campbelltown where rents jumped by $10 (to $340).
Median rents for two bedroom apartments in Sydneys inner suburbs increased from $540 to $550 in three months to September, a 1.9 per cent jump – more than twice the quarterly rate of inflation.
In fact, over the 12 months to September, median rents for these inner city apartments leaped by 10 per cent thats $50 a week, Mr Gadiel said.
The largest quarterly increases were in:
¢ Waverley – where weekly rents soared by $25 a week (to $550);
¢ Lane Cove – where rents jumped by $20 a week (to $430); and
¢ Mosman where rents jumped by $13 a week (to $513).
Mr Gadiel said these latest rent increases were just the continuation of Sydneys long-term trend.
In the last four years, median rents for three bedroom houses in outer suburban Sydney have soared by 44 per cent thats an average annual increase of 9.5 per cent.
In the same period rents for three bedroom apartments have swollen by 41 per cent an average of 9 per cent a year.
Mr Gadiel said regular home buyers and renters are paying the price for the serious decline in housing construction evident since 2003.
Sydneys land release program is token at best, with lot production crippled by red tape and high development levies, he said.
Inner city apartments are in high demand by those wanting to escape the citys congested roads.
But the not-in-my-back-yard attitude of local politicians has stifled the supply of new dwellings in the areas served by good transport links.
The lack of planning and infrastructure reform carries huge economic and social costs for Sydney.
Mr Gadiel said the Reserve Bank had made it clear that the squeeze on renters was the result of an inadequate housing supply.
The minutes of Octobers monetary policy meeting of the Reserve Bank Board, released on 19 October, said that there were some signs that the rental market was tightening again, with vacancy rates in some states declining from levels that were already quite low.
The tightness in the rental market was likely to persist given the ongoing strong population growth and the decline in housing approvals this year, and could be expected to feed into increases in rents, the banks minutes said.
According to the bank approvals for construction of apartments remained at low levels in most states, with Victoria a clear exception.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.