08 March 2009
Average Sydney home rents have jumped by more than $30 a week and theres little relief in sight according the Urban Taskforce.
Last year, median rents for two bedroom homes jumped by 11.4 per cent from $350 to $390 a week, Mr Gadiel said.
Even the economic slowdown in the last three months of the year failed to halt rent increases with a $10 increase in that quarter alone.
The median rent for three bedroom homes jumped from $350 to $385 a week a 10 per cent increase over 2008. Mr Gadiel said that apartment renters were the hardest hit with a 14.3 per cent increase in rents.
In just three months from October to December last year – median rents in Sydneys inner suburbs increased by $21 from $479 to $500. Over the year they increased from $450 to $500 an 11.1 per cent increase.
The scary thing for apartment renters is that the supply of new apartments has been choked off by the banks refusal to lend to property developers.
In January this year, only 370 new medium and high density homes were approved in NSW.
Its a 64 per cent drop compared to the previous January. Without a strong supply of new privately developed apartments, the upward pressure on rents will continue.
We dont think that the increase in the supply of public housing through the Federal governments fiscal stimulus package will make any difference to most renters. The increase in public housing is mainly aimed at the homeless and those at risk of homelessness.
The clients of the public housing system are generally not private renters in their own right at the moment.
Its important that they be looked after, but we mustnt think that this will provide relief to the great bulk of private renters.
Mr Gadiel said in the last three months there had been sharp increases in rents for separate houses in Sydneys middle ring suburbs.
Median rents for these houses increased by 8.6 per cent in the last three months alone and 10.1 per cent over the course of the whole year, he said.
That means a typical new tenant renting a house in these areas saw a $31 increase in their weekly rentals in just three months taking their rent from $349 a week to $380 a week.
Mr Gadiel said that even the outer suburbs of Sydney are no longer safe from big increases in rents.
Rents for three bedroom houses in Sydney outer suburbs jumped by 12.5 per cent in 2008 from a median of $280 to $315 a week, he said.
Mr Gadiel said the supply of new houses had also been hit by the banks tight lending rules.
Just 808 new free-standing houses were approved in NSW in January a 30 per cent fall since the previous January figure.
Mr Gadiel said that the biggest single problem for the development industry was a lack of support from the banks.
Despite benefiting from sweeping government guarantees banks are refusing to lend for development projects, he said.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
For every $1 million in construction expenditure, 27 jobs are created throughout the broader economy. The construction activity made possible by property developers contributes $69 billion to the national economy each year and creates 709,000 direct jobs. The construction industry is Australias third largest source of employment.
