Record jump in rents

14 August 2008

Sydney is cursed with ever-rising rents due to the cheap political opportunism of some local government leaders, according to Aaron Gadiel, chief executive of the Urban Taskforce.

Yesterdays NSW Government Rent and Sales Report revealed that there had been an 18 per cent increase in rents for three bedroom homes and a 15 per cent increase for two bedroom apartments in the last financial year.


Mr Gadiel said that the figures showed that renters were paying the price for political ploys of irresponsible local government politicians.


In the run-up to next months elections, many local councils have put the brakes on urban development, Mr Gadiel said.


Instead of being honest with their communities about the benefits of development, too many local government politicians have scored points at the expense of home renters and buyers.


Not a day passes without a councillor boasting in their local paper about their success in halting or reducing apartment construction.


Tragically, for renters, these politicians have been enormously successful.


Approvals for new apartments and town houses have plunged by 40 per cent in the last four years.


The community is now paying the price with a 14 per cent annual increase in rents for two bedroom units in the inner suburbs of Sydney.


Leichhardt has seen a 26 per cent increase in rents over the past 12 months, while Botany rents have shot up by 23 per cent, rents in Lane Cove have jumped by 16 per cent and rents in Waverly and Ashfield have leaped by 17 per cent.


Even the traditionally more stable areas in the middle ring suburbs of Sydney have been hit hard with a 17 per cent hit in increased rentals for two bedroom apartments.


Rents in Canterbury have climbed by 29 per cent, Auburn have climbed by 25 per cent and Ku-ring-gai by 22 per cent.


Mr Gadiel said local councils were also blocking the construction of new houses that would take the pressure off rents in the outer suburbs.


Sky-high development levies as much as $50,000 a home have helped deliver the lowest level of new housing approvals since figures were first kept on the subject in 1965.


Thats why rents for homes in the outer suburbs of Sydney have jumped by 13 per cent.


Rents for three bedroom houses in the council area of Baulkham Hills have shot up by 20 per cent, 18 per cent in Blacktown, 18 per cent in Hornsby and 15 per cent in Fairfield.


Traditionally rental increases in these suburbs are kept low, by the steady production of new houses.


Instead the rate of construction of new homes has hit rock bottom, Mr Gadiel said.


The latest Australian Bureau of Statistics figures show that NSW home starts have declined 2 per cent since the previous 12 month period, compared with annual falls of 13 per cent, 15 per cent, 8 per cent and 10 per cent in the preceding years.


In the run-up to next months council elections, local council candidates need to be frank with their community about the costs of anti-development policies, Mr Gadiel said.


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



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