The Sydney market is increasingly competitive with a supply of higher quality apartments, and less of the lower cost options. House prices remain out of reach for first-time property buyers.
Rising rental prices make it harder for renters to save for a deposit, as wages growth in Australia is at record lows. As this trend is predicted to continue, many renting are set to continue. Also, more first home buyers are priced out of the market so they will find themselves being renters for a longer period of time. More people leads to higher demand means higher prices.
Investors with larger budgets are increasingly competing against first home buyers out of the Sydney’s market, increasing their further reliance in renting. Would-be first home buyers are part of the largest demographic segments in Australia, 30-34 year olds are the largest with 25-29 year olds second largest in Australia. Weekly rents for units in Sydney have increased on average 4.8% in the past year Since June 2016 according to Domain data, to $550 in June 2017.
Developers are increasingly redeveloping/developing lower-cost properties into prestige and newer townhouses and apartments (i.e. Calibre by Icon Oceania, Gentry by Thirdi) leading to higher prices by investors and rented at higher prices to tenants. This trend pushes median rental prices upwards. Furthermore landlords are increasingly renovating their properties to justify this rental growth amidst competition from new developments.
This trend indicates the rental market is further maturing. For example, a couple in their late 20s/early30s decides to start a family but can't afford a house, they can rent a larger property or move out of the city. Most rent a larger premises than to buy of the city. These reasons include more job opportunities are located in Sydney, often easier and faster to find a larger premises to rent In comparison to saving, finding and buying the right property, especially if they do not have a deposit.
This does not mean there are no rental options available. For our latest rental listing, please check out our properties here.