Amid a cost-of-living crisis and a housing crisis, Sydney renters are giving up their dreams of beachside living for cheaper pastures.
As a result, 20 suburbs along the city’s coast have recorded median rents for houses cheaper than they were a year ago, according to new data from Domain.
Some of Sydney’s most highly coveted suburbs have seen a steep decline in median rents, situated in the northern beaches, the city and the east.
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However almost all the areas have a median weekly asking rent of $1100 or higher, in comparison to the city’s overall median rent of a record high $750 per week.
Clovelly recorded the largest fall in median asking rent, down 16.2 per cent to $1550 a week.
The median rent in Palm Beach is down 11.1 per cent to $1600, while the median rent in North Curl Curl is down 8.4 per cent to $1500.
Other notable suburbs have seen a smaller drop in price, with their median rent remaining well above the city average.
Rose Bay’s median rent has decreased by 7.5 per cent to $1850, Double Bay’s median rent has dropped 5.7 per cent to $2075 and Mosman’s median rent is down 1.3 per cent to $1875.
Only two suburbs recorded a decline in the median rent for units.
Katoomba’s median rent for units dropped 2.6 per cent to $380, while Lavender Bay’s median rent for units declined by 0.4 per cent to $628.
Leaving for more affordable areas
A contributing factor to the median rent drop is thought to be renters leaving these areas for more affordable ones.
Tenants may have reached an “affordability ceiling”, St George chief economist Besa Deda said.
“It’s possible there is an affordability stretch that has entered that market, and that would be consistent with Sydneysiders looking for more affordable suburbs and perhaps looking outside of beach suburbs that would be less expensive than those suburbs that are further out,” she said.
Deda anticipates that rent for units will grow, even in affordable areas, as demand for them increases due to renters seeking cheaper housing options.
“I would anticipate that the risk (for tenants) is units do show more growth than houses because units are more affordable … and you would see more of that growth in affordable areas,” she said.
“We’re still seeing conditions that are consistent with a tight rental market, even though the data is showing a bit of a loosening.”
While beachside suburbs saw a boom during the pandemic, they were now experiencing the largest declines in median rent as tenants were hit by the cost-of-living crisis, Laing+Simmons head of property management Michael Anania said.
“It’s purely based on affordability,” he said.
“They’ve reached their maximum, in my opinion.
“What we’ve found is that they move a bit lower (northern beaches), not as on-the-water. They move a bit more inland.
“We had three tenants recently do that. They’ve moved because they’re back in the office three days a week, the costs are a lot higher (returning to the office).
“Whereas in (the height of) COVID, we had the flexibility to live where we wanted.”
Some large families have also moved into units to combat the demands of a return to full-time work, on top of cost-of-living pressures, Anania said.
Living conditions not matching price
Wages growth has not equipped renters to deal with the rental growth in some of Sydney’s most sought-after pockets, and demand is declining as a result, Rent Fairy founder Sarah Elkordi said.
But while rent is skyrocketing, renters are also dealing with sub-par living standards, she said.
Tenants have reached their limits and are no longer willing to pay for substandard homes at such exorbitant rental prices, she said.
“It’s because the rents they are trying to achieve (are) unachievable and unrealistic,” Elkordi said.
“People are looking for quality but something they can also afford.
“The prices for the quality of properties in the east is not what they’re looking for.”
One tenant Elkordi spoke to moved out of Bondi because she lived in a defective building that left her rental covered in mould and caused her to become ill.
Demand for one-bedroom properties is also in decline as more tenants were opting to share-house to spread their rental costs, Elkordi said.
“The demand to be near the beach is not realistic or achievable any more … People are moving for lower prices to meet their criteria and their budget.”
The 20 suburbs where median rent has declined:
- Clovelly — down 16.2 per cent to $1550
- Palm Beach — down 11.1 per cent to $1600
- North Curl Curl — down 8.4 per cent to $1500
- Balmain East — down 7.9 per cent to $1198
- North Sydney — down 7.7 per cent t $1200
- Rose Bay — down 7.5 per cent to $1850
- Allambie Heights — down 6.4 per cent to $1100
- Lisarow — down 5.9 per cent to $640
- Double Bay — down 5.7 per cent to $2075
- Willoughby — down 5.7 per cent to $1250
- Summerland Point — down 4.3 per cent to $550
- Birchgrove — down 4.2 per cent to $1150
- Hazelbrook — down 3.6 per cent to $530
- Elanora Heights — down 2.2 per cent to $1100
- North Turramurra — down 2.1 per cent to $1150
- Mosman — down 1.3 per cent to $1875
- Leura — down 0.8 per cent to $623
- Newport — down 0.4 per cent to $1295
- Warriewood — down 0.4 per cent to $1295
- Belrose — down 0.2 per cent to $1298
